Founded in 1967 in New Zealand, Douglas Pharmaceuticals is now one of the country’s largest privately-owned pharmaceutical companies and a respected name in the global pharmaceutical industry.
As well as producing prescription drugs, Douglas develops, manufactures and distributes a wide range of consumer health and wellness products.
As a growing company with both domestic and international customers, it faced the common issue of its manual, highly utilised warehousing operations becoming a bottleneck, particularly for its fast-moving consumer healthcare range.
This dilemma spurred a collaboration with Kardex, an automated storage solutions specialist, which has global partnerships with AutoStore, Rocket Solution, Robomotive, and Sumobox.
The partnership allowed Kardex to enhance Douglas’s operations by increasing warehousing efficiency and storage capacity without expanding the physical footprint.
UNDERSTANDING THE BUSINESS NEEDS
Douglas has always prioritised customer service. However, the manual nature of its warehousing operations was starting to hinder productivity and employee satisfaction.
“Douglas is incredibly focused on delivering exceptional customer service,” says Andrew Mackintosh, General Manager of Supply Chain at Douglas.
“However, our traditional manual warehousing methods were becoming a bottleneck, impacting the operating environment for our team and challenging our ability to maintain the high service levels we’re known for.
Additionally, the increased pressure on our warehouse team was affecting morale.”
Recognising the need for change, Douglas sought a solution that would not only solve its immediate storage capacity issues, but also enhance overall operational efficiency. This is where Kardex’s expertise came into play.
“What Kardex did really well was they invested a lot of time upfront, getting to know the context of our business, our products, and our goals,” adds Andrew.
“They went beyond just understanding our current state and asked for a lot of our operational data to run simulations and come back with various scenarios for different automation solutions, ensuring the best fit for Douglas both now and in the future.”
SELECTING THE RIGHT AUTOMATION SOLUTION
The collaboration between Kardex and Douglas led to the selection of the AutoStoreTM system, an automated storage and retrieval solution.
“The major benefit for us is the increase in storage capacity,” explains Andrew.
“The AutoStore solution will expand our storage capacity by 30 percent while using only 10 percent of our warehouse footprint. We also anticipate significant improvements in inventory control and replenishment processes through the automation tool.”
The decision to implement Kardex AutoStore was not taken lightly. Douglas considered multiple options, including expanding its existing warehouse, purchasing a new facility, or utilising a third-party logistics provider. However, these options didn’t offer the benefits of automation.
“We were answering our storage capacity issue, but we weren’t getting the other benefits that come with automation,” says Andrew.
“With AutoStore, we saw a 68 per cent improvement in operational throughput from order receipt to dispatch, without any other related changes to our operational workflow.”
THE ROLE OF KARDEX IN FACILITATING CHANGE
Grant Smith, Director of Business Development AutoStore, ANZ Kardex, highlights the importance of understanding the unique needs of each business.
“When we talk to customers, we make sure to understand all aspects of their business, not just the immediate pain points,” says Grant.
“This helps us tailor solutions that address both current problems and future opportunities.
“For Douglas, we facilitated a process that involved detailed simulations and scenario planning, which were crucial for validating and fine-tuning their assumptions. This support was instrumental in building a solid business case for automation.”
Grant further emphasises the role of Kardex as a partner rather than just a solution provider.
“Our approach is to work closely with our customers, helping them understand their business better and challenging them with questions around data and operations. This collaborative process is essential for developing a roadmap that aligns with their growth projections and operational goals.”
IMPACT ON OPERATIONS AND PRODUCTIVITY
The implementation of AutoStore is set to revolutionise Douglas’s warehousing operations. The increased storage capacity and improved inventory control are just the beginning.
“The automation solution will not only address our current storage capacity issue but also significantly enhance our overall operational efficiency,” says Andrew.
“We anticipate improvements in inventory control, replenishment processes, and a substantial reduction in operational bottlenecks.”
The automation system allows the company to maintain its workforce while scaling operations.
“One of our key drivers was to grow our business without the need to double our workforce or cut it in half to pay for the automation,” explains Andrew.
“This approach aligns with our community-based values and heritage, showing that automation can support growth without compromising on employee retention.”
ADVICE FOR SMEs CONSIDERING AUTOMATION
For small and medium enterprises (SMEs) contemplating automation for the first time, both Andrew and Grant offer valuable insights.
“Reflecting on our journey, we initially focused on solving our immediate problem of limited storage capacity,” says Andrew.
“However, with Kardex’s facilitation, we also considered our long-term business goals and how automation could help us achieve them. My advice is to invest time in understanding both your current challenges and future opportunities.”
“The first step for SMEs is to ascertain their pain points and what’s holding them back from growth,” adds Grant.
“It’s important to understand your problems before looking for solutions. Partnering with the right integrator or consultancy is crucial for navigating this process. At Kardex, we pride ourselves on being a partner who helps SMEs understand their business better and develop tailored automation solutions.”
The partnership between Kardex and Douglas exemplifies how thoughtful planning and collaboration can lead to operational improvements.
By investing time in understanding the business context and leveraging advanced automation solutions, Douglas is well positioned to achieve its growth ambitions without compromising on customer service or employee satisfaction.
As SMEs continue to navigate the challenges of a changing market, the lessons from this collaboration serve as a valuable guide. Automation is not just about technology; it’s about understanding your business, setting long-term goals, and choosing the right partners to help you achieve them.
For Douglas, the journey with Kardex has been transformative, paving the way for a more efficient, productive, and scalable future.
Read more about Kardex here