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Applying Business Intelligence and KPIs to Manage a Pharmaceutical

Distribution Center: A Case Study

Chapter · January 2020

DOI: 10.1007/978-3-030-37221-7_25

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 Applying Business Intelligence and KPIs to manage a
pharmaceutical distribution center: A case study

Cathy Guevara-Vega1[0000-0002-2470-8287], Jeferson Ayala1, Jenny Ortiz1, Alexander Gue-

vara-Vega1, Daisy Imbaquingo1[0000-0002-6412-6257], Pablo Landeta 1[0000-0002-2914-8696]
1 Universidad Técnica del Norte, Facultad de Ingeniería en Ciencias Aplicadas, Network
Science Research Group e-CIER, Av. 17 de Julio, Ecuador
cguevara@utn.edu.ec

Abstract. The use of modern Business Intelligence (BI) tools, provide real-time
information and support decision making. In this context, the purpose of the pre-
sent study was to develop a BI application. To do so we had to identify the struc-
ture of the Key Performance Indicators (KPI), to analyze and select a BI meth-
odology and tools through an empirical method. Three types of research methods
were applied: Descriptive, documentary and field. Data were collected through
interviews. Finally, the elements of the KPI structure were identified as the fol-
lowing: (a) denomination, (b) concept, (c) function, (d) objective (e) form of cal-
culation, (f) frequency of calculation, (g) data source, (h) form of representation
and (i) responsible. Then, we developed as a case study a BI application using
QPM and the QlikView methodology to support decision-making in the distribu-
tion center of the company Farmaenlace Cía Ltda.

Keywords: Business Intelligence (BI), QlikView, BI QPM methodology, deci-

sion making, Key Performance Indicators (KPIs), case study.

1 Introduction

Business organizations develop their activities and businesses and generate data, such
information is paramount as it allows companies to gain a competitive advantage in the
business world. But it is required that decision makers have easy and quick access to
valuable and relevant information. According to the specificity of the organization,
business intelligence (BI) can help to achieve such purpose allowing the company to
convert first data into information, and then information into helpful and timely
knowledge to support the decision-making process [1].
BI provides information that facilitates decision making through data analysis [2]
and creates indicators to measure the performance of a business [3] [4]. Key Perfor-
mance Indicators (KPI) are metrics indicating some specific conditions or results [5].
According to the Guide for the implementation of indicator systems proposed by the
Spanish Association for Standardization and Certification [6], KPIs actively contribute
to the measurement of metrics related to the performance of an organization and they
facilitate decision making [7]
2

Currently, there are many methodologies to structure, design and control the devel-
opment of Business Intelligence solutions [8] such as Kimball, Inmon, Hefesto and
QPM. There are also tools that facilitate the implementation of BI solutions for compa-
nies. In its annual report, the consulting firm Gartner [9] identified some of the leaders
in the BI market including Tableau, QlikView and Microsoft BI.
Regarding BI methodologies, it is worth indicating that QlikView Project Method-
ology (QPM) was developed based on a model of good practices to develop activities
in a structured way [10] QPM works with the tool QlikView. QlikView creates inter-
active applications adapted to users' needs in a fast and flexible way [11]. It also eases
the analysis of data, the findings of hidden trends and reveals features that drive deci-
sions [12]. With this background, this paper presents a comparison of the methodolo-
gies and tools as well as their characteristics available for the development of BI pro-
jects. This is very important because choosing a suitable tool is essential for future work
in this area. In addition, as a case study, we will study the pharmaceutical company
Farmaenlace Cía. Ltda., which commercializes products nation-wide. Its production
distribution center (CEDIS) is divided into five areas: Reception, Primary Storage
Warehouse (BAP), Picking, Certification and Transportation. In each of these areas, an
inventory management system processes information. However, the system does not
include performance indicators to support decision-making processes.
For the purpose of this case study, the following question was asked: How can deci-
sion making be strengthened in the distribution process of pharmaceutical products?
We had first to identify the KPI structure, then we had to analyze available BI method-
ologies and tools, choose one of them and finally develop a Business Intelligence ap-
plication for the CEDIS of Farmaenlace Cía. Ltda.
The next section details the type of research, the population, as well as a comparison
of BI methodologies and tools.

2 Methods and Materials

2.1 Research type

The processes involved in the CEDIS activities of Farmaenlace Cía were described to
follow the descriptive research methodology. Also, field investigation in the environ-
ment of the distribution center was carried out. Identify the functional requirements
[13] was necessary in reference to performance indicators. Finally, information from
different sources was compiled through indexed databases (Scopus, Springer) to choose
the methodology and the BI tool. In this sense the research methodology was documen-
tal.

2.2 Population and sample

In each of the five areas of CEDIS there is a person responsible for suggestions. These
employees gave us valuable information and became the coordinators for the develop-
ment of the project. A questionnaire was submitted to employees during interviews, it
allowed us to get empirical data as a primary technique. The questionnaire was made
 3

of 12 questions aimed at identifying the processes carried out in each CEDIS area but
also the needs in terms of performance indicators, the indicators type and their fre-
quency of calculation, the source of data, and the way to display the indicators.

2.3 Comparison parameters

According to the company’s needs, the following comparative tables of BI methodolo-

gies and tools were developed. See Table 1 and 2.

Table 1. Summary of characteristics of the Kimball, Inmon, Hefesto and QPM methodolo-
gies.
CHARACTE
KIMBALL INMON HEFESTO QPM
RISTICS
Construction Bottom-up. Top-down. Bottom-up. Bottom-up.
approach
Business ap- Department Corporative Analysis of ob- Department
proach analysis analysis. jective and indi- analysis and indi-
cators cators.
Model of de- Dimensional. Relational. Dimensional. Associative.
velopment
Type of com- Aimed at large Aimed at large Aimed at SMEs. Aimed at large
pany companies, but companies, but companies, but
adaptable for adaptable for adaptable for
SMEs.
SMEs. SMEs.
Complexity of Medium High Medium Low
implementa-
tion

Project size Big, médium, Big, médium, Medium, small Big,médium,

small small small
Flexibility to High Low High High
change
Delivery re- Short and me- Long term. Short term. Short term.
sults dium term.
Implementa- Reasonnable High develo- Reasonnable Reasonnable cost.
tion cost cost. ping cost. cost.
Source: [14], [15], [16], [17], [18] y [19].
The most relevant BI tools to analyze were: Tableau, Microsoft BI and QlikView [9]

Table 2. CEDIS Business Needs vs. BI Tools

Features BI tools
No Tableau Microsoft BI QlikView

1 Integration within the company’s platform YES YES YES

2 Implementation friendliness YES YES
4

3 Administration friendliness YES YES

4 Real-time data connection YES YES YES
5 Multiple source data integration YES YES YES
6 Design of personalized dashboards with in-
YES YES YES
tuitive interface.
7 Plotting of ready-to-use and intelligible con-
YES YES YES
solidated data
8 Ad-hoc consulting allowing users to answer
YES YES YES
themselves their business questions
9 User friendly YES YES
10 Interactive analysis. YES YES YES
11 Filter, selection and data searching YES YES YES
12 Real-time interaction and display of data YES YES YES
13 Results browsing and detailed analysis YES YES YES
14 Data finding YES YES YES
15 Data corrolation YES YES YES
16 Historical data identification to compare
YES
data over time
17 User Interface option (UI). YES YES YES
18 Change diplay views on the fly YES YES YES
19 Combine several analysis in a single report YES YES YES
20 Quick response time. YES YES YES
21 Adding and modifying computation on de-
YES YES YES
mand
22 Real-time computation YES YES YES
23 Role management - profiles. YES YES YES
24 Self-service capabilities (self-sufficient us-
YES YES YES
ers).
25 Minimum entertaining YES YES
26 Reduced dependence on the IT department
YES YES
for the analytics.
27 Data perception YES YES
28 Implementation time lessthan 3 months YES
29 Cloud BI YES YES YES
30 Microsoft Office synchronisation YES YES YES
 5

31 Mobile plateform BI. YES YES YES

32 Local support YES YES YES
33 Good experience, robustness and provider
YES YES YES
reputation
34 Reasonable licence cost (within budget). YES
35 Quick installation and deployment. YES YES
Total 32 25 35
Source: [20] [21] [22] [23] [24] [25] [26] [27] [28]

2.4 Construction of the BI application

We used the QPM methodology which allows us to promote the best practices for the
development of BI applications in QlikView.

Phase1 - Pre-analysis
Data Sources
The data generated by the processes in the CEDIS areas are stored relationally in
two physical servers, each one installed with a SQL Server 2016 database engine dis-
tributed in 6 databases and 32 tables.
Specification of Key Performance Indicators (KPI's)
An analysis of the interviews of the CEDIS areas employees enabled to identify and
determine KPIs according to the model of indicators in the standard [6].
Calculations and business rules
Each indicator computation is reflected in the application dashboard. The business
rules that were applied were made up of two parts:
- Process of Extraction, Transformation, and Load of the data from the sources.
- User interface for the display of data within dashboards.
Architectural model of the QlikView application
Figure 1 shows the QlikView architecture for CEDIS.
6

Fig.1.Qlikview solution architecture for the indicators of the CEDIS Farmaenlace Cia. Ltda.

Phase 2 - Planning.
In the second phase, the following activities were carried out. See table 3.

Table 3. Planning activities for the creation of the BI application.

Description

Activity Task Results

Connectivity to the databases of the ERP - CEDIS
Assumptions integrated system. Assign users with experience in
each of the areas.
Owning the infrastructure and the license of the
Restriction QlikView tool.
A Project Manager specialized in project develop-
Roles and duties ment for CEDIS. Two BI developers who are experts
in data management with QlikView tool.
Project deve- Activities time- Project implementation based on the timeline of ac-
lopment plan- line tivities.
ning Phase 1: Requirements document, key performance
indicators, computation and business rules.
Phase 2: Project development plan, implementation
Project delivera- of data extraction processes (ETL), data model.
bles Phase 3: Implementation of user interface (UI), soft-
ware testing plan, application tweaking document.
Phase 4: User manual.
Phase 5: Acceptance report.
 7

Analyze the required data sources from an average

of 400 related tables. Creation of ODBC connection.
Data extraction
Creation of load application "LoadPerfor-
Extract,
manceCEDIS.qvw".
Transform and
Load (ETL) Through the execution of filters, validations, combi-
Processes Data transfor- nation of data, business rules and additional compu-
mation and data tations an average of 20 million transformed data
loading was obtained in an average time of 15 minutes with
a bandwidth of 5 Mbs/s.
According to each area of the distribution center, six
Data model Plotting related data models were created according to the
project requirements.
Phase 3 - Execution.
In this phase, the user interface (UI) application consisting of control panels was
built in short cycles. See table 4.

Table 4. Phases of the BI application development cycle according to the QPM methodol-
ogy for the Reception area.
Phase Description
Using filters on: previous start date, previous end date, current start date,
current end date, and supplier list.
Main reception panel: the dashboard displays the indicators related to:
Consolidated number of suppliers attended, shifts attended, purchase orders
attended and average execution time per shift, performance percentage rep-
Construction resented by each indicator in the selected periods.
Detail of reception by supplier: The following average times are displayed:
Assigned shifts, attended orders, received boxes, assigned time, executed
time and the delay of an analysis period. Delays and assigned time per shift
are presented in addition to assigned shifts, received boxes and average time
of shifts per week.
The validity of the data sources was determined through the ETL process
Test and the direct consultation of the database. The calculations established in
phase 1 meet the objective set out for the specified indicators.
User re- Functionalities were reviewed with the stakeholders of the reception area in
view and meetings.
accepta- A document listing the weaknesses of the application to be fixed in the next
tion phase was created.
The business platform, hardware, and software required for the application
Tweaking were identified.
Issues were addressed according to the weaknesses document.

Phase 4 - Implementation.
The application was uploaded to the company's server to implement the BI applica-
tion for CEDIS in production. This was done taking into account the controls and
8

security established by the IT department. The transfer of technology to the CEDIS

administrator was realized through training and technical support. The user and tech-
nical manuals were also delivered.
The next section shows the results based on the interview, the comparison of tools
and methodologies, and the development of the BI application.

3 Results

3.1 Results of the interview

The interview helped to determine 40 indicators satisfying the users' requirements.
For illustrative purposes, 16 of them are described hereafter:

─ Number of providers attended, current and previous period

─ Number of shifts attended, current and previous period
─ Number of purchase orders attended, current and previous period
─ Average execution time per shift, current and previous period
─ Hours of backlog per provider
─ Gap between assigned time and execution time per shift
─ Platform with greater service capacity
─ Number of providers with the highest level of service per year
─ Number of suppliers with the highest purchase volume per year
─ Assigned shifts
─ Average number of shifts assigned per month, week and day.
─ Average number of orders attended per month, week and day.
─ Average number of boxes received per month, week and day.
─ Average time assigned per month, week and day.
─ Average execution time per month, week and day.
─ Average assigned time vs. execution time per month, week and day.

3.2 Benchmarking results

We analyzed 4 methodologies proposed by the main BI providers including William
H. Inmon, Ralph Kimball, Ricardo Bernabeu and the Business Intelligence Software
company Qliktech. Based on this, we chose QPM methodology by Qliktech. Out of
some business intelligence tools ranked as leaders by the consulting firm Gartner, Inc.
in February 2017 (e.g. Tableau, Microsoft BI and Qlik), we selected Qlikview for the
development of the application for the following reasons:

─ Farmaenlace Cia. Ltda. Owns Qlikview licenses,

─ Its interfaces are simple, both for visualization and for data mining,
─ It is possible to collect data from different sources such as Databases compatible
with ODBC or OLEDB and file formats (HTML, Microsoft Excel, text, XML),
─ Its memory processing allows data to be compressed, to optimize power and to fa-
cilitate data browsing and analysis,
 9

─ Its associative search feature, i.e. if a value is selected for any attribute, all associated
data are displayed because the selection applies to the whole layout.

3.3 Results of the BI application

Data analysis was carried out between January and August 2017. The database in-
creased by 300 Gb per month on average. The most relevant results appear in the re-
ception area thanks to the analysis of the data through the BI application. See tables 5,
6 and 7.
Table 5. Results of the reception area displayed in the dashboard thanks to the BI applica-
tion: Main Reception Panel.
Previous Current pe- Indicator
Result
period riod
Providers atten- Previous period 291 providers, Current
ded period 311 providers, Providers attended
grew by 6.43%
Shift atended Previous period 3.859 shifts, Current pe-
From From
riod 4.415 shift, Shift attended grew by
2017-01- 2017-05-
12.59%
02 to 01 to
Number of pur- Previous period 4.155 PO, Current pe-
2017-04- 2017-08-
chase orders riod 4.691 PO, Number of PO grew by
30 31
(PO) attended 11.43%
Average execu- Previous period 33 min 50 sec, Current
tion time per period 35 min and 16 sec, average execu-
shift tion time per shift grew by 4.07%

Table 6. Results of the reception area using the BI application presented in the dashboard:
Details Reception.
Consul-
ting pe- Yardstick Results
riod
Providers with the LETERAGO DEL ECUADOR, 147 days of visit, 728
highest backlogs shifts, 382 delayed shifts, 346 on-time shifts and 797h
51 min backlog. QUIFATEX SA, 109 days of visit,
280 shifts, 140 delayed shifts, 140 on-time shifts and
From
150h 48 mi backlog.
2017-01-
Time difference
02 to
between the as- ZAIMELLA, 132h 15 min assigned time, 200h exe-
2017-08-
signed time and cution time, 67h 45 min additional difference.
31
the execution time LETERAGO DEL ECUADOR, 588h 30 min assigned
related to the at- time, 640h 9 min execution time, 51h 39 min addi-
tention of shifts (in tional difference.
hours)
10

Platform A1, 194h 54 min assigned time, 163h 16 min

Platform with the execution time, 117,41% average assigned capacity vs
highest servicing 98,36% executed capacity. Platform A2, 146h 37 min
capacity assigned time, 131h 45 min execution time, 88,33%
average assigned capacity vs 79,37% executed capac-
ity.
Providers with the DIDELSA CIA. LTDA., 1.753.469 requested boxes,
highest servicing 1.577.786 received boxes, boxes difference 175.683
level in 2017 with 89,98% service level. LETERAGO DEL
ECUADOR, 3.186.883 requested boxes, 2.720.071
received boxes, boxes difference 466.812 with
85,35% service level.
Provider with the LETERAGO DEL ECUADOR, requested amount
highest volume of 44.530.247 $, perceived amount 37.908.693 $, differ-
purchase in 2017 ence 6.621.554 $ with 85,13% service level. BAYER
S.A., requested amount 12.971.536 $, perceived
amount 11.440.034 $, difference 1.531.502 $ with
88,19% service level.

Table 7. Results of the reception area using the BI application presented in the dashboard:
Details of Reception by Provider.
Provider: LETERAGO DEL ECUADOR
Consulting Yardstick (ave-
Results
period rage)
Assigned shifts 91 shifts per month, 21 shifts per week and 5 shifts per
day
Attended orders 92 orders per month, 22 orders per week and 5 orders
per day.
Received boxes 256.194 boxes per month, 60.281 boxes per week and
From 2017-
13.943 boxes per day.
01-02 to
Assigned time 73h 33 min per month, 17h 18 min per week and 4
2017-08-31
hours per day.
Execution time 80h 1 min per month, 18h 49 min per week and 4h 21
min per day.
Assigned time Increased by 6h 27 min per month, increased by 1h 31
min per week and increased by 21 min per day.

The next section discusses the research findings.

4 Discussion

[30] state that Business Intelligence is the most innovative approach to browse data
and to help corporate managers, business supervisors and clients to make informed
 11

business decisions. Considering this, BI solution tools facilitate the monitoring of

KPI's, the capture of key data from different systems and their display in user-friendly
summarized forms. In their study on the implementation of a performance indicator
dashboard for the Medical Imaging Department (MID), [31] identified 92 MID indica-
tors shown in an effective and comprehensive display. In his work "Finance net-interest
margin analysis with qlik-view", [32] highlights that QlikView is one of the most ver-
satile tools in the development of Business Intelligence applications. He used this tool
to design Net Interest Margin (NIM) control panels but also to integrate data from dif-
ferent sources and to display it. It demonstrates the handiness of this tool to efficiently
consolidate data and provide an interactive and practical analysis in a short time.
[33] research on BI data display tools, QlikView is also mentioned as a versatile and
flexible memory-based tool capable of turning data into knowledge. In their case study,
KPIs from two universities are identified and displayed to determine their performance
and ranking over 5 years.
In this study, QlikView allowed us to display key performance indicators identified
in the requirements analysis process of the distribution center CEDIS of Farmaenlace
Cia. Ltda., and to visualize them in a fast and intuitive way. The figures supported the
results that were computed with Excel. Some KPIs helped to visually describe the pro-
cess objectively. Finally, as the project was developed, other indicators were added,
and their relevance should be analyzed over time to determine their usefulness. The
next section exposes the conclusions and future projects.

5 Conclusion and future works

Based on the study conducted on BI methodologies and the performance of the tool
selected for the implementation of the application, it has been shown that the QPM
methodology is a flexible methodology that satisfies the needs of the CEDIS Distribu-
tion Center because of its quick and easy development and also because it leads to vis-
ible results.
The study made by [9], on BI solutions influenced our decision to select QlikView.
Indeed, this tool facilitates the browsing and analysis of data through self-service capa-
bilities and associative logic and it also allows decision-makers to take full advantage
of the data. Also, its fast implementation, its high availability to process information,
its user-friendliness and intuitivity make it a prime choice.
As future work, we meant to continue working on data mining to analyze from dif-
ferent perspectives the information obtained from the indicators in order to find data
patterns and make projections to optimize the CEDIS processes.

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