Case Study: Rochester Drug Cooperative

How Rochester Drug optimizes distribution for over 1,300 independent pharmacies and home health care dealers.

Rochester Drug is a pharmaceutical wholesaler that started in 1905. Headquartered in Rochester, NY, Rochester Drug (RDC) is a regional wholesale drug distribution with two distribution centers—one in Rochester, NY and the other in Fairfield, NJ. RDC is one of the few remaining drug distribution cooperatives remaining in the United States. The company supplies over 1,300 independent pharmacies and to over 250 home health care stores.

The Challenge:

The 60,000 square-foot distribution center (DC) in Rochester supported the company operations for decades. However, RDC was growing and in 2011, the Rochester DC was nearing capacity. “We needed a temporary fix for the Rochester facility while we planned a long-term strategy to service our New York City customers,” said Gary Ritzman, Project Manager at RDC. “We were handling 920 orders per day encompassing 33,000 lines, shipping six nights a week. Two thirds of our lines were going to customers in the New York City area, 350 miles away. These orders were shipped at night on long-hauls, while couriers would make the last-mile deliveries.”

The Solution:

RDC selected SSI SCHAEFER to engineer an updated solution to its Rochester DC. SSI SCHAEFER implemented a new solution that included power conveyors, which enabled tracking totes throughout the warehouse. Picking zones were also connected—allowing totes to automatically route between zones. Automated stackers and inline printers for documented order insertions were also put into place. The retrofitted solution brought the existing DC up to date. However, the real solution included an expanded footprint into Fairfield, NJ.

A New Automated Facility Provides a Long-term Strategy

A decision for a new DC offered close proximity to New York City clients and allowed an expansion to handle up to 70,000 lines per day. In mid-2015, RDC went live with the Fairfield DC with 45,000 lines per day. The facility and the automation system were designed to handle the expansion of 70,000 lines as business dictates.

The Result:

WAMAS® Warehouse Management System – Central to the DC’s operation is its WMS, called WAMAS®.  The WMS, as well as many of the automated systems installed, were engineered and manufactured by SSI SCHAEFER.

WAMAS manages the operational control, administration, and optimization of the automated warehouse.  It is connected to RDC’s host ERP system.  The DC’s WMS allows RDC to control and optimize various processes in the warehouse – from manual to fully automated.  It provides an extensive portfolio of functionalities for managing core processes like goods-in, storage, picking, goods-out, value-added services, material flow control, goods tracking and transparent monitoring.

AUTOMATION OPTIMIZED FOR PHARMACEUTICAL DISTRIBUTION

The Fairfield DC is highly automated and integrated with systems geared specifically for pharmaceutical distribution. The vast majority of orders are processed through the DC in totes, which are then shipped to RDC’s customers. When the next day’s delivery is made, the empty totes are retrieved and returned back to the DC for reuse.

Rochester Drug Cooperative Case Study Video

“One of the valuable functions that the WMS does for us is pre-sort inventory based on primary picking locations,” explained Ritzman.  “We have fast-moving items that are picked on the A-frames, manually picked from flow racks, or from the automated carousels.  We also have slower-moving items that get picked off stationary shelving in manual picking areas, and from the carousels. WAMAS pre-sorts based on where the inventory should go to optimize replenishment levels.  If there is enough inventory in the primary pick locations, then it sends the inventory either to an overstock location or reserve.” - Gary Ritzman, RDC

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