AI-driven supply chains keep pharmacies stocked
Overview
Pharmaceutical retailers must maintain exceptional operational efficiency while delivering consistent service across hundreds of locations. A leading state-owned pharmaceutical company in Europe, recognized that its continued expansion demanded a more sophisticated approach to supply chain management. With 400+ outlets, 600+ suppliers and thousands of SKU its legacy systems created inefficiencies – excess inventory, forecasting inaccuracy and struggling supply chain disruption.
Partnering with HCLTech, the company implemented an AI-driven Blue Yonder Demand and Fulfillment Platform with customized solutions, transforming supply chain operations. This resulted in a 30% inventory reduction, 99% system availability and a shift in the demand-driven distribution model, enhancing efficiency, scalability and patient service.
The Challenge
As the pharmaceutical retailers expanded, managing it’s supply chain became increasingly complex. Legacy systems and outdated processes hindered efficiency, creating bottlenecks in operations:
- Scalability and flexibility issues: Existing systems lacked the capacity to handle its growing network of outlets, suppliers and SKUs per location. The rigid infrastructure made it difficult to scale operations efficiently.
- Supply chain visibility gaps: Inconsistent service levels from wholesalers led to unpredictable supply situations, making it difficult to maintain reliable inventory across all locations. Without end-to-end visibility, disruptions were hard to anticipate and mitigate.
- Inefficienct inventory and demand planning: The company struggled with balancing stock levels—overstocking in some locations while facing shortages in others. Traditional forecasting methods failed to accurately predict demand fluctuations, leading to suboptimal inventory placement.
- Manual and disconnected process: Limited integration with third-party material handling systems increased labor costs and operational inefficiencies. Additionally, outdated forecasting and replenishment method required extensive manual intervention, slowing down decision-making and responsiveness.
The Solution
HCLTech collaborated with the pharmaceutical company to design and implement a transformative retail operations model. Our approach evolved from a reactive SLA-based application support to an AI-driven, demand-responsive model. What began as a standard IT-managed services engagement evolved into a strategic transformation, delivering:
- Intelligent data hierarchy management: A structured, AI-powered framework for organizing historical data enabled accurate forecasting and strategic inventory planning
- Advanced demand classification: Machine learning algorithms categorized products based on demand patterns, ensuring precise stocking decisions across the supply chain
- Automated, demand-driven replenishment: A real-time sales data synchronized inventory movement, ensuring optimal stock levels at every location while minimizing excess inventory
- Strategic inventory optimization: Intelligent safety stock calculations balanced product availability with cost objectives across all warehouse and retail outlets
- Blue Yonder platform implementation: The AI-powered Demand and Fulfillment platform was fully integrated with existing systems and third-party material handling, enhancing operational agility
By leveraging these innovations, the company built a highly responsive, data-driven supply chain, improving efficiency, reducing costs and ensuring uninterrupted service for millions of customers.
The Impact
The implementation of the intelligent supply chain solution delivered measurable improvements across operations:
- 30% reduction in warehouse inventory: Optimized stock allocation freed up capital while maintaining service levels
- 8% decrease in store-level inventory: Optimized local stock levels improved space utilization while maintaining service levels
- Improved system performance: Service levels improved from 70% to 98%, minimizing disruptions
- 5-6% forecast accuracy improvement: Advanced AI-driven demand prediction, reduced both stockouts and excess inventory
- 10-12% reduction in safety stock: Smarter replenishment strategies optimized stock buffer while maintaining a consistent supply
- Enhanced supply chain visibility: Real-time insights allowed for proactive decision-making and continuous improvements
Beyond the Numbers
With real-time insights and AI-powered demand planning, the company is now positioned for scalable, cost-efficient growth—ready to adapt to changing market demands and deliver superior service to patients.
Moving from reactive inventory management to strategic supply optimization has created a more agile, responsive distribution network that aligns inventory with actual customer needs. This shift optimizes operational efficiency and enhances product availability, ensuring patients receive timely access to critical medications.
Supply chain teams now operate with end-to-end visibility across the network, spending less time managing exceptions and more time driving strategic improvements. The company is now well-equipped to drive long-term efficiencies, scale seamlessly and maintain its leadership in the pharmaceutical retail sector.
Celebrating Success
At HCLTech, we empower pharmaceutical leaders with intelligent technology solutions. Our partnership with this European pharmacy giant demonstrates how advanced supply chain optimization can turn operational challenges into competitive advantages.
As the pharmaceutical company continues to strengthen its market position, our intelligent supply chain framework provides the foundation for scalable growth—enabling the business to expand efficiently while maintaining the exceptional service levels that patients and healthcare providers depend on.
