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Copy of Pharmacy Service Improvement at CVS

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by

Reaksmey Hong

on 7 March 2013

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Transcript of Copy of Pharmacy Service Improvement at CVS

Pharmacy Service Improvement at CVS Sandeep Kumar Jena (10BM60078)
Siddharth Verma(10BM60086)
Vijay Kumar Prajapati(10BM60096) ISS Presented By:- Case Background CVS(Customer value stores) Pharmacy, or simply CVS, is one of the largest retail drugstores chain in the United States.
Growth hampering due to customer defections.
Poor customer service arising from loopholes in fulfilment process.

Changes recommended Focus  To alter the drop-off, data entry, and production steps, therefore ideally reducing the number of problems that occur during the pick-up stage .
Drop-off Problem-
Unmanned Drop-off
Window
Assigning Dedicated workforce at the drop- off.
During Drop-off itself verifying some of the customer details
Making the process online and thereby eliminating the need of one visit (Drop-off trip)completely by the Customers

First Customer Value Store in Lowell, Massachusetts in 1963.
By 2002 CVS was one of America’s largest retail drugstore.
Over 4000 stores and revenue of $24.2 billion with a growth of around 9% from last year.
Over two-thirds of revenue is generated by pharmacies.
Overview Company Data Entry Drug Utilization Review is of Paramount importance and in case of hard stop should not proceed without authorization from Pharmacist.
Insurance Check- In Case of Problem, Letting customer know of the situation and asking his flag off before filling the script. Also Giving customer an option of pay now and wait for reimbursement .
Updating Customers on Script Status
Focus – to eliminate trip of customers whose prescriptions are not yet ready.
Automated Phone Line - to update customers on the status of their prescriptions.
Hiring New Personnel – Since right now there is already employee shortage we would be requiring to hire new Personnels.
Cost of hiring new personnels – 10$ per hour
So Yearly Cost – 8 Hrs per day* 365 days * $10 * 4000 = $11,68,00,000 = $.11 billion
Production Issue- Insufficient inventory to completely fill the scripts.
Recommendations-
Using better forecasting to meet demands
Allows Patients to have at least part of their prescription No. of light and heavy users No. of customer left : 7.2 million
No. of prescription lost: 55 million
So, Average no. of prescription lost per customer: 7.64
No. of scripts by an light user: 5
No. of scripts by an heavy user:40
Average scripts : 7.64
(5L+40H)/(L+H)=7.64
32.36H=2.64L
By solving further we’ll get approx
Light users : Heavy users = 92.5 : 7.5%
Benifits of Improving Customer Service A significant portion of heavy and light users switch to other pharmacy just because of service(15.3%).
Taking on an average 75% of customer defections due to service and by improving it we can save 0.28 billion every year. 0.75*(0.13*0.925+0.44*0.075)*2.5billion = 0.28 billion
PSI an opportunity for CVS PSI plays major role to change pharmacy fulfillment operations.
Their work was sponsored and supported by senior management and higher authorities.
Their recommendations for tasks, responsibilities and fulfillment carries much weight without compromising customer safety.
McFarlan’s Strategic Grid IT is having high impact on the business operations in CVS, as the processes deals in pharmacy.
In CVS, IT also have high impact on Strategy.
So, we place the company CVS in Strategic quadrant of the Grid.
Pick Up Issues – Unpleasant customer surprises, unauthorized refills, scripts not been paid for by an insurance. Scripts preventing fulfillment. Resolution process sometime takes long wait time for consumers in line during 5 -7 p.m.
Recommendations – Encouraging our technicians to give explanations, Online billing option, At-Home delivery, Ease of switching to CVS.
Technology to prevent Backsliding Constantly Monitor Drop-off station
Check/update customer information in the system.
Refill online or over telephone.
Online billing
Improving practices will lead to increase in customer base.
Basic Flow of CVS prescription Fulfillment process Drop-off Data
Entry Production Quality
Assurance Pick-Up
Full transcript