Few countries are as demanding when it comes to supply chain logistics as the Philippines. Comprising more than 7,000 islands, over half of which are populated, in a region with limited transport infrastructure and which is prone to earthquakes and extreme weather events, the challenges facing distributors are diverse and unpredictable.
United Laboratories, Inc
UNILAB is the leading
pharmaceutical and healthcare
products manufacturer and
distributor in the Philippines.
The business, which recently
celebrated its 70th anniversary,
manufactures and distributes more
than 350 prescription and overthe-
counter (OTC) brands.
UNILAB supports more than
6,000 customers in the Philippines
including the country’s largest
pharmacy chains, and a growing
number of distribution partners
across over 20 countries in South
East Asia and the Asia Pacific region.
The business has expanded
significantly over the past five years,
diversifying its product range into
new segments including personal
care and dental supplies. As a result
its product range has grown from
around 800 stock keeping units
(SKUs) to more than 2000, with
UNILAB recently announcing that it
had achieved annual sales of more
than US$1 billion for the first time.
First Pioneer Distribution DC
The key enabler in UNILAB’s supply
chain is its impressive Distribution
Centre (DC) in Laguna, run and
managed by one of its subsidiaries
First Pioneer Distribution, Inc. (FPDI).
The DC is one of the largest single
covered structures in the Philippines,
providing over 30,000 m2 of
covered floor area within UNILAB’s
44-hectare compound in Brgy.
Mamplasan, Biñan City, Laguna.
Working in conjunction with
Dematic and its partner in the
Philippines, Prime Sales, Inc.,
UNILAB has implemented a
new split-case order fulfilment
system, enabling around 90% of
transactions to be fulfilled using
paperless picking technologies
including Pick-to-Light (PTL) and
wireless mobile terminals.
UNILAB Director Albert Alcruz
said order fulfilment accuracy and
productivity were the key drivers
in the design of the DC’s new
integrated logistics systems.
"Accuracy is important in all distribution
operations, but none more so than when
you are distributing healthcare products.
When the time came to upgrade our
logistics systems, we wanted to make sure
we got the best available."
- Albert Alcruz, UNILAB Director
“We have had a very long working
relationship with Prime Sales, and
we’re very happy they could assist us
in introducing Dematic’s iQ Warehouse
Control System (WCS), Pick-to-Light (PTL)
system with global induction, Pick Director
software, and wireless computing systems,”
said Mr Alcruz.
An intelligent zone-routing conveyor
system interconnects the picking areas and
automatically directs and diverts orders to
the zones where picking is required.
Early exit diverts enable completed orders
to exit the system as soon as the last item
for an order has been picked, reducing the
time to completion. The conveying system
connects the picking systems to the
checking and packing area.
Global induction, together with the zonerouting
conveyor system, allows orders
to start in the zone where the first item is
required.
This ensures a higher availability of work
for pickers, and significantly improves their
productivity by avoiding the need to wait
for work to arrive.
Picking is initiated when an operator scans
the barcoded licence plate attached to the
order tote.
In the shelving area, picking is directed and
confirmed by operators using hand-held
wireless terminals.
In the PTL zones, each product location is
identified with its own display.
The lights on the displays indicate which
locations to pick from and the required
quantity of items to be picked. The operator
confirms picks via acknowledgement
buttons. Picking in the PTL zones is
exceptionally fast and accurate.
Integrated Warehouse Control System
The PTL system, wireless mobile terminals
and conveying system are controlled
by Dematic’s iQ WCS, which interfaces
directly with UNILAB’s SAP enterprise
management system. Dematic’s iQ WCS
provides comprehensive management
information, real-time visibility and logistics
systems control including:
- Management of real time paperless
picking technologies
-
Order routing and management of
intelligent conveying systems
-
Wave progress monitoring
-
Order interrogation and work assignment
enquiries
-
Individual picker productivity statistics
-
Zone picking productivity statistics
-
Container contents tracking
-
Quality assurance checking
“In developing our integrated logistics
solution for UNILAB, we invested a
significant amount of time to understand
their operation and challenges. A lot of
attention was directed to the split-case
picking operation as this is the most
complicated and labour intensive part
of UNILAB’s order fulfilment process,”
said Dematic’s ASEAN Director Michael
Bradshaw.
“Our integrated system design includes
a zone-routing conveying system to
minimise picker travel coupled with picking
technology to increase productivity and
ensure the highest level of accuracy.
“The modular approach we took to system
design provides UNILAB with the flexibility
to further expand the system in line with
business growth.
“There is the possibility to introduce
additional picking zones and to introduce a
Put-to-Light sub-system to support order
fulfilment for an expanding network of drug
stores,” added Mr Bradshaw.
Dematic’s pharmaceutical industry
experience the key
“Dematic’s extensive global experience
in the pharmaceutical sector gave us the
confidence that they would deliver a worldclass
logistics solution,” said Mr Alcruz.
The introduction of the new order fulfilment
system has significantly improved order
picking efficiency, productivity and
accuracy, while the new Dematic iQ WCS
system enhances UNILAB’s quality of
real-time information management.
“Despite significantly expanding our
operations and daily volumes, the
efficiency of our new picking operations
has improved productivity to the extent
that we have been able to get through
much more work in less time, and are
much better able to deal with the peaks we
experience,” said Mr Alcruz.
“Another benefit of our improved
information management systems is that
they provide us with comprehensive track
and trace capabilities for every item picked,
which is important should there be a need
to recall products for any reason,” he said.
“While the new picking systems provide
us with very high accuracy levels, our
commitment to ensuring customers receive
the perfect order means we still utilise a
team check counters to ensure any errors
are identified and rectified before orders
leave the DC,” added Mr Alcruz.
Distribution in the Philippines
Summing up the supply chain challenge
in the Philippines, Mr Alcruz said it was
essential to be always thinking beyond
what you do.
“The Philippines is very much a special
case when it comes to supply chain
distribution,” he said.
“In a country which regularly experiences
earthquakes and extreme weather events
contingency planning is essential, and we
are continually reassessing our distribution
capabilities and always asking ourselves
the question: how can we best support our
customers?”
While there are obvious seasonal peaks
for certain types of products, there are
always unforeseen circumstances, such
as the outbreak of a particular virus, which
makes forecasting demand difficult in the
healthcare sector.
“That is why one of the key drivers for our
new distribution system was flexibility,”
said Mr Alcruz.
“The healthcare sector is one in which we
really can’t say no. We always try to find
the most efficient way to get our products
to customers wherever they are,” he said.
The supply chain challenge in the
Philippines
The distribution challenge in the Philippines
is unique and the last leg of the supply
chain in the Philippines can be very
challenging.
Mr Alcruz added: “It’s often not as simple
as transporting products from A to B.
Sometimes we need to deliver to very
remote areas, and there are times there
may be as many as ten steps in the supply
chain.
“The fact that some products need to be
temperature-controlled adds a further
layer of complexity to the order fulfilment
challenge.”
“For urgent deliveries to remote areas, it
is not uncommon for the goods to be
delivered by the pilot who has flown the
items to the location, or for them to be
delivered on horseback, or even on foot.”
“We not only have to manage individual
products, we also have to track different
production batch and lot numbers through
the supply chain,” he said.
“For many higher volume products we aim
to maintain not just one, but two active
pick face locations with different batches
to ensure picking stock is always available,
with all products picked on a FEFO basis.
“Pick face replenishment is automatically
initiated when the volume of stock in a
location falls to a certain quantity,” said Mr
Alcruz.
“When we were evaluating the configuration
of our new distribution systems, we
considered the option of moving to a fully
automated picking solution, but decided
this would limit the flexibility that our
system provides us with today.”
"In terms of accuracy, productivity and
flexibility, we decided that Dematic’s
integrated order fulfilment solution would
provide us with the best performance."
- Albert Alcruz, UNILAB Director
Summary
Few countries in the world face the unique
supply chain challenges that distribution in
the Philippines presents.
However, distributors like UNILAB
demonstrate that when the appropriate
investment in world’s best practice
logistics distribution systems is made,
supply chain excellence is achievable in
even the most difficult of circumstances.
UNILAB’s new order fulfilment systems will
ensure the business continues to provide
efficient, cost-effective health services
to people in the Philippines and set new
standards for healthcare in the region for
many years to come.