Distribution System of

Pharmaceuticals Products
(Retail Storage with Consumer Pickup)
 Distribution system of Pharmaceutical
companies
• A well-designed distribution system is crucial
in the pharmaceutical industry to ensure
efficient and timely delivery of products to
retail storage facilities, with convenient
options for consumer pickup.
Product distribution system of SPL
• 2nd largest revenue generating company in
Bangladesh.
Product Distribution of SPL
1. Indoor product Supply Management

2. External distribution to the customer by channels

Flow of Medicines from Central
Distribution to Peripheral Store
Sending Orders from Peripheral Store to Central
Distribution Store
 Functions of Depot Premises

1. Confirming the entry in front of the premise.

2. Head of depot recognize the product.
3. Get the list of the order and the product.
4. Physically check the product according to the list.
5. Confirming the peripheral store.
6. Informing the peripheral store for any disruption.
7. Sending the product on store shelf.
Process of Accumulating Orders by Depot Store
The way of distribution from Depot to Retailer to Customer

1. Store Depot. Shelf

2. Dispensing Area and the specific location

3. Grading and sorting according to invoice

4. Preparing invoice according to order

5. Making logistical arrangements according to location

6. Logistical distribution logistics on the basis of the

sequence
7. Delivering the product & collecting
fund
8. Reporting to depot
 Economic Benefits
1. Reduced transportation costs:
This is because products can be shipped from the retailer's distribution center to the
store in bulk, and then picked up by customers instead of delivering order home
individually.
Reference: A study by the University of California, Berkeley found that retail
storage with consumer pickup can save retailers up to 20% on transportation costs
(Technological Change and Store-based Retail, 2020)

2. Reduced inventory costs:

Retailers can optimize inventory by stocking products only at stores where customer
pickups are likely, reducing dead stock in warehouses and freeing up valuable storage
space for other products.
Reference: A study by the Massachusetts Institute of Technology found that retail
storage with consumer pickup can save retailers up to 10% on inventory costs
(Designing the Distribution Network in a Supply Chain , 2011)
Cont….
3. Reduced labor costs:
No delivery to homes means store employees spend less time on picking and
packing orders. Customers will pick up their own orders.
Reference: A study by the Harvard Business School found that retail storage
with consumer pickup can save retailers up to 5% on labor costs (How “Buy Online,
Pick Up In-Store” Gives Retailers an Edge, 2021)

4. Increased sales:
Consumer pickup makes online shopping convenient. Nearby customers feel more
inclined to order online, assured they can pick up at their convenience. Plus, the
option for immediate pickup encourages impulse buying.
Reference: National Retail Federation (NRF) found that retail storage with
consumer pickup can increase sales by up to 5% (Fulfillment and Delivery, 2016)
 Challenges
1. Inventory Optimization and Order Visibility:
• Challenge: Balancing inventory levels across stores and distribution centers to meet expected
pickup demand while minimizing stockouts and overstocking. Lack of real-time order visibility

can lead to inaccurate inventory data and inefficient allocation.

• Data: A study by Capgemini found that 38% of retailers struggle with maintaining optimal
inventory levels for click-and-collect orders (Gani, 2015). Research by the National Retail

Federation indicates that stockouts in click-and-collect orders result in a 44% higher cart

abandonment rate (NRF, 2023).

Reference: Gani, R. (2015). Retail storage with customer pickup in online retailing.
International Journal of Production Economics, 170, 151-165.
Cont….

2. Operational Efficiency and Space Constraints:

• Challenge: Streamlining the process of storing, retrieving, and staging orders for customer
pickup within existing store layouts and staffing limitations. Limited dedicated space for
pickup orders can cause bottlenecks and congestion.

• Data: A study by Deloitte found that 40% of retailers experience operational inefficiencies
in click-and-collect due to lack of dedicated space and unclear workflows (Deloitte, 2022).
Research by McKinsey & Company suggests that retailers can achieve up to 20% higher
efficiency with dedicated in-store pickup areas (McKinsey & Company, 2021).

Reference: Deloitte. (2022). Click-and-collect: The next frontier for convenience. Deloitte Insights.
McKinsey & Company. (2021). Building the Future of Brick-and-Mortar Shopping. McKinsey &
Company.
 Cont….

3. Customer Experience and Order Fulfillment

Accuracy:
• Challenge: Ensuring a smooth and convenient pickup experience for customers, including

clear communication, timely order availability, and accurate order fulfillment. Incorrect or

missing items can lead to customer dissatisfaction and brand damage.

• Data: A study by PwC found that 25% of customers who attempt click-and-collect

experience issues like long wait times or missing items (PwC, 2023). Research by JDA

suggests that order fulfillment errors in click-and-collect can lead to a 15% decrease in

customer loyalty (JDA, 2022).

Reference: PwC. (2023). Why omnichannel fulfillment still needs work. PwC. JDA. (2022). Click-and-Collect:

Delivering a Seamless omnichannel Experience. JDA Supply Chain Management.