Smith Drug Co.
For more than 70 years Smith Drug Co. has operated as a traditional pharmaceutical wholesaler. The company’s three distribution centers in Paragould, Ark., Valdosta, Ga., and Spartanburg, S.C., stock and ship drugs, general merchandise and sundries to independent pharmacists throughout the South and Midwest. “We’ve always been known for customer service that is unsurpassed in the industry,” Foreman says.
The passing of the Affordable Care Act in 2010 signaled the beginning of a transition for the entire healthcare industry including the pharmacists on the front line of providing health care to patients. “Pharmacy right now is moving from ‘prescription drug is the product’ to ‘patient outcomes is the product,’” Senior Vice President of Pharmacy Solutions Brian Purscell, RPh says. “What we’re doing at Smith Drug is providing solutions to let independent pharmacists be part of that movement.
‘We’re focusing on making independent pharmacies better and making the independent a healthcare destination,” Purscell adds. Smith Drug Co. recently expanded its human resources and solutions programs to position itself to improve on the practice and business of pharmacy. The company’s goals are to support its pharmacists so they can practice at the top of their medical license, become the pharmacy of choice for customers and drive better patient outcomes.
The result of those efforts will be a different Smith Drug Co., one that offers a far more complete set of services for independent pharmacists. “We will be known more so in the years ahead for being a solutions provider who also happens to have a very competitive pricing structure and broad assortment of pharmaceutical and over-the-counter products,” Foreman says.
To make that change, Smith Drug Co. is expanding on its distribution capabilities. “We are investing in technology to better drive solutions for us as a wholesale distributor,” Foreman says. Those technologies are aimed at making downstream customers more efficient.
One of the largest investments the company has made is in P4 Technologies cloud-based inventory-management system, which was fully rolled out in April. P4 is a predictive inventory system that looks at historical data for multiple years to determine what demand will be for products on certain dates. The system then generates a suggested order based on that data that Smith Drug buyers can use to procure supplies for the company’s distribution centers.
The result is that Smith Drug is better able to control its inventory and ship products out to customers when they need them. Order fulfillment under the P4 system has reached over 99 percent. “If it’s available to wholesalers and the pharmacists are able to have it, we’ll provide it for them,” Purscell says. “P4 Technologies is a leading provider of cloud-based forecasting, replenishment and inventory optimization solutions. Since our business depends on customer service, it was important to choose a vendor that enables us to provide the best possible customer service level.”
Predictive stocking means Smith Drug has an appropriate amount of stock a week in advance of the buying rush, avoiding seasonal issues and leading to fewer problems with expiring drugs that don’t end up selling. It also enables the company to carry a larger assortment of products because it does not need to overstock to handle demand. “We’re flexing up and down based on what we anticipate our need to be, which allows us to have more warehouse space to stock other items.”
“P4 allows us to maintain a leaner inventory, lowering our working capital needs, while at the same time improving in-stock service level performance to our customers,” Foreman adds. Smith Drug’s early success with the P4 system is encouraging the company to consider implementing some of the predictive inventory features at the pharmacy management level.
Smith Drug is still looking at how that process would work and where the benefits would be, but the program would likely fall under the company’s HealthWise Pharmacy Consulting Solutions offering. “HealthWise Pharmacy is really our banner program,” Foreman explains. “It’s our name, our mark. Everything we do will have HealthWise Pharmacy branding.”
The company is constantly exploring ways to expand those services. Foreman says the company’s clinical solutions are aimed at helping pharmacists improve their quality measures and getting them into programs for specialty drugs. In May, Smith Drug announced a partnership with Diplomat Pharmacy to offer access to a specialty drug network. Through that network, Smith Drug’s independent pharmacists can now provide full service for patients with complex chronic diseases such as cancer, hepatitis, multiple sclerosis and long-term conditions.
Most pharmacists don’t take business courses while earning their degrees. By providing services that can fill in that gap, Smith Drug prepares its customers to operate a successful business. The company can help independent pharmacists not only be better behind the counter and at merchandising, but also teach them how to manage a profit and loss statement, optimize staff and provide guidance on leasing.
On the consulting side, Smith Drug has retail specialists who can conduct an in-depth review of a pharmacy front-end, which covers the customer experience from the pharmacy counter out to the parking lot. Those specialists help pharmacists determine whether products are placed in the best locations, whether the store is properly merchandised for the season, and how the product selection fits the demographics of the community.
Smith Drug is boosting those services through technology. Parent company J M Smith Corp. also owns RxMedic, a pharmacy robot and dispensing automation company, QS/1, a developer of pharmacy management systems and Integral Solutions Group, which has the patent for ScriptChek, a “smart” label. Through those automation and software packages, Smith Drug can provide its customers with full pharmacy solutions. The company has also partnered with Legisym to introduce a cloud-based controlled substance ordering system that makes it easier for pharmacists to manage orders.
Smith Drug Co. continues to explore technologies and services offerings that will create healthcare destinations and allow independent pharmacists to grow their footprint while continuing to offer personalized care to their customers.
The company is looking to further expand its offering to customers and will continue to maintain its intimate knowledge of the industry by having staff with pharmacy backgrounds who are better equipped to support customers. “Our special niche is taking the profession itself and offering resources that can help independent pharmacists win,” he says.