Executive Briefings

SPECIAL ISSUE: GLOBAL SUPPLY CHAIN PARTNERSHIPS

Wyeth: Pharmaceuticals Giant Puts It All Together at Central D.C.

Wyeth Pharmaceuticals had a lengthy list of special requirements, when it set out to consolidate U.S. distribution at a new centralized facility.

It was more than a question of putting up a building with the right number of dock doors. Headquartered in Madison, N.J., Wyeth is one of the world's largest pharmaceutical companies. In consumer healthcare, its product line includes such household names as Advil, Centrum and Robitussin. On the prescription drug side, Wyeth sells Premarin, a treatment for menopause and osteoporosis that is the nation's single most prescribed product.

The division of American Home Products, which recently changed its own name to Wyeth, also had some strict criteria for product handling. Every system in the pharmaceutical business has to pass through a rigorous validation process, says Patrick Flanagan, Wyeth's distribution center director. Vendors must be specially qualified, with all systems changes scrutinized, test scripts written, and new facilities put through stress tests to ensure they can handle the expected volumes and comply with government regulations.

"Our number-one priority is to make sure that orders are processed accurately and efficiently," says Flanagan. "We will never sacrifice quality."

All of this formed the backdrop for Wyeth's plan to consolidate six distribution points into one facility. The designated place was Vonore, Tenn., 40 miles south of Knoxville. It was preferred due to its easy access to major roadways and air services, primarily the Louisville, Ky., hub of United Parcel Service.

For its warehouse management system (WMS) provider, Wyeth needed a vendor with a background in pharmaceuticals and prescription drugs. It found it in Data Control Systems (DCS), an independent company which has since been acquired by Fairfield, N.J.-based Vertex Interactive, Inc. Other clients of DCS/Vertex include Merck, Pfizer and Warner-Lambert.

Wyeth selected DCS in the fall of 1998. According to Flanagan, the company was looking for a vendor that could install a state-of-the-art handling system, with pick-to-light technology and paperless picking, in a brand-new building. DCS worked with Conveyco, a materials-handling supplier, which installed the racking and conveyors.

Despite its experience in pharmaceuticals, DCS faced several challenges. One was the need for its WMS to communicate with Wyeth's legacy systems, in addition to the customer's enterprise resource planning (ERP) system from SAP. Another was the scale of the operation. The 100-acre Tennessee facility covers more than 600,000 square feet of warehouse space, with another 92,000 square feet on two tri-level mezzanines, one for over-the-counter (OTC) items and the other for prescription drugs. The system supports more than 600 OTC SKUs, 500 pharmaceutical SKUs, 60,000 pallet locations, 2,500 pick-to- light locations and two and a half miles of conveyors. It can handle the shipment of more than 60,000 cartons a day.

Training on the new system took place over several weeks. DCS was on the scene the whole time. "We trained all their folks," says Tim Callahan, senior vice president of worldwide sales. "We like to work down to the worker-bee level, so things don't get lost in translation."

The operation went live in October 1999 - just over a year from the time Wyeth bought the greenfield property. More than a bare-bones WMS, the system today handles complex order fulfillment within the warehouse. For inbound product, it scans the bar code and automatically assigns a putaway location, based on such criteria as business unit, temperature-control needs and security considerations. All controlled drugs, for example, are routed to a secure vault. Radio-frequency scanners allow Wyeth to verify that each item has ended up in the right place.

Changes in product status are relayed on a constant basis. When it comes time to pick an item, Wyeth can employ either RF technology or its pick-to-light system. The first is used mostly for bulk orders or product that hasn't been assigned a forward pick location (non-conveyable product); the second is for loose pieces and packs. The pick-to-light technology eliminates the need for paper pick lists, Callahan says. And, at the push of a button, the item is subtracted from inventory.

Vonore now handles 85 percent of Wyeth's pharmaceutical distribution in the continental U.S. The rest, mostly for customers in western states, passes through a smaller, more traditional D.C. in Sparks, Nev. Vonore also distributes 45 percent of the company's consumer health products, with most of the remainder going through Sparks and another facility in Richmond, Va.

Despite the potential for complications, the project came off with a minimum of glitches. Additional software continues to be added as Wyeth changes or bolsters its product lines. Says Flanagan: "This was one of the smoothest implementations I've had."

Wyeth Pharmaceuticals had a lengthy list of special requirements, when it set out to consolidate U.S. distribution at a new centralized facility.

It was more than a question of putting up a building with the right number of dock doors. Headquartered in Madison, N.J., Wyeth is one of the world's largest pharmaceutical companies. In consumer healthcare, its product line includes such household names as Advil, Centrum and Robitussin. On the prescription drug side, Wyeth sells Premarin, a treatment for menopause and osteoporosis that is the nation's single most prescribed product.

The division of American Home Products, which recently changed its own name to Wyeth, also had some strict criteria for product handling. Every system in the pharmaceutical business has to pass through a rigorous validation process, says Patrick Flanagan, Wyeth's distribution center director. Vendors must be specially qualified, with all systems changes scrutinized, test scripts written, and new facilities put through stress tests to ensure they can handle the expected volumes and comply with government regulations.

"Our number-one priority is to make sure that orders are processed accurately and efficiently," says Flanagan. "We will never sacrifice quality."

All of this formed the backdrop for Wyeth's plan to consolidate six distribution points into one facility. The designated place was Vonore, Tenn., 40 miles south of Knoxville. It was preferred due to its easy access to major roadways and air services, primarily the Louisville, Ky., hub of United Parcel Service.

For its warehouse management system (WMS) provider, Wyeth needed a vendor with a background in pharmaceuticals and prescription drugs. It found it in Data Control Systems (DCS), an independent company which has since been acquired by Fairfield, N.J.-based Vertex Interactive, Inc. Other clients of DCS/Vertex include Merck, Pfizer and Warner-Lambert.

Wyeth selected DCS in the fall of 1998. According to Flanagan, the company was looking for a vendor that could install a state-of-the-art handling system, with pick-to-light technology and paperless picking, in a brand-new building. DCS worked with Conveyco, a materials-handling supplier, which installed the racking and conveyors.

Despite its experience in pharmaceuticals, DCS faced several challenges. One was the need for its WMS to communicate with Wyeth's legacy systems, in addition to the customer's enterprise resource planning (ERP) system from SAP. Another was the scale of the operation. The 100-acre Tennessee facility covers more than 600,000 square feet of warehouse space, with another 92,000 square feet on two tri-level mezzanines, one for over-the-counter (OTC) items and the other for prescription drugs. The system supports more than 600 OTC SKUs, 500 pharmaceutical SKUs, 60,000 pallet locations, 2,500 pick-to- light locations and two and a half miles of conveyors. It can handle the shipment of more than 60,000 cartons a day.

Training on the new system took place over several weeks. DCS was on the scene the whole time. "We trained all their folks," says Tim Callahan, senior vice president of worldwide sales. "We like to work down to the worker-bee level, so things don't get lost in translation."

The operation went live in October 1999 - just over a year from the time Wyeth bought the greenfield property. More than a bare-bones WMS, the system today handles complex order fulfillment within the warehouse. For inbound product, it scans the bar code and automatically assigns a putaway location, based on such criteria as business unit, temperature-control needs and security considerations. All controlled drugs, for example, are routed to a secure vault. Radio-frequency scanners allow Wyeth to verify that each item has ended up in the right place.

Changes in product status are relayed on a constant basis. When it comes time to pick an item, Wyeth can employ either RF technology or its pick-to-light system. The first is used mostly for bulk orders or product that hasn't been assigned a forward pick location (non-conveyable product); the second is for loose pieces and packs. The pick-to-light technology eliminates the need for paper pick lists, Callahan says. And, at the push of a button, the item is subtracted from inventory.

Vonore now handles 85 percent of Wyeth's pharmaceutical distribution in the continental U.S. The rest, mostly for customers in western states, passes through a smaller, more traditional D.C. in Sparks, Nev. Vonore also distributes 45 percent of the company's consumer health products, with most of the remainder going through Sparks and another facility in Richmond, Va.

Despite the potential for complications, the project came off with a minimum of glitches. Additional software continues to be added as Wyeth changes or bolsters its product lines. Says Flanagan: "This was one of the smoothest implementations I've had."