Walgreens transformed their drop ship program with Logicbroker.

Today, the pharmacy giant is poised for major online growth. By trading its legacy drop-shipping solution for our modern, agile platform, Walgreens and its vendors gained transparency, cost savings and efficiency, backed by incredible support.

“Walgreens moved to Logicbroker due to their modernized technology, ability to support compliance with CCPA and the fact that our suppliers would not have to incur any costs to participate in the Walgreens drop ship program. In our research, one of Logicbroker’s other clients, who we reached out to for a reference, gave us the feedback that Logicbroker was a partner not just a service provider. I could not agree more. They have a strong ‘we are one team’ mentality and are responsive and supportive. Our suppliers have also given good feedback on the support they receive from Logicbroker. I look forward to what the future brings.”

-Jennifer Raber, Senior Manager, Digital Process at Walgreens

Challenges

Walgreens is one of the largest US pharmacy chains. Beyond specializing in filling prescriptions, Walgreens offers customers an assortment of health and wellness products, health information, and photo services.

As the “home for pharmacy, photo and health & wellness products,” the Walgreens team is dedicated to offering customers a variety of goods to meet their shopping needs both in-stores and online. With more consumers relying on online shopping, expanded assortment is a key initiative, and their drop ship model enabled Walgreens to control and maintain their brand integrity.

When the program first launched, Walgreens selected a drop ship and EDI provider to provide automation. However, as technology evolved it was clear their provider’s approach was no longer agile enough to meet their customers’ demands. The lack of visibility into vendor inventory and performance caused errors, while lack of comprehensive reporting prevented Walgreens from scaling drop ship in a meaningful way. Ongoing struggles with vendor onboarding contracts coupled with rising variable costs significantly delayed or prevented new vendors from launching.

Walgreens knew they needed to upgrade to a modern technology stack with more flexibility, better visibility and a better solution for their vendor community, but they didn’t want a heavy IT project. Additionally, the team needed the ability to easily add new vendors to expand assortment and increase revenue. As Walgreens executives examined cost efficiencies, they also questioned their existing provider’s high price tag, legacy on-premise technology and overall value-add.

Solution

The Walgreens team looked to Logicbroker’s powerful cloud technology to upgrade their drop ship technology. Logicbroker eliminated Walgreens IT development work by leveraging existing infrastructure with new modern end points. Since Logicbroker encrypts data in transit and at rest, and supports single sign on technology, the no-code approach dramatically reduced the overall level of effort and Walgreens IT involvement. The platform and drop ship vendors were migrated within a six-week window. Vendors either kept existing data transmission protocols or modernized to take advantage of Logicbroker’s automation and easy-to-use portal. Invoices now easily flow through the system to complete the order lifecycle, and vendors can reference specific compliance documentation through the Logicbroker-created online Walgreens Knowledgebase. With Logicbroker, vendors are no longer bound by third-party contracts, nor pay fees to connect or participate in the Walgreens drop ship program, resulting in immediate technical and financial benefit.

Vendors aren’t the only ones to experience immediate improvement. With the Logicbroker platform in place, Walgreens now has better inventory visibility and a better understanding of vendor performance. Logicbroker’s AI sourcing tools match Walgreens product SKU identifiers with the SKU identifiers vendors use for that same product, preventing erroneous SKUs from being added to their site. As orders come in, this same logic automatically identifies potential inventory issues and can route orders to alternate vendor’s stock for fulfillment.

Highlighting and reporting potential exceptions through user-based notification settings streamlined communication too. Notifications are personalized to meet the needs of each team. Inventory, sales and SKU data can be sent daily to Merchandising Teams; document exceptions requiring immediate investigation are quickly surfaced to Operations Teams; high-level KPI reporting metrics can be sent to Drop Ship Program Managers and Executives on a weekly basis.

Results

The transition and migration process received overwhelming positive reviews from Walgreens vendors. Since Logicbroker doesn’t charge for setup, mapping, monthly or transactional fees, vendors were eager to migrate fast. They appreciated Walgreens desire to make the vendor experience as frictionless as possible for them, and are excited for their strong, growing business partnerships.  The Walgreens Business and IT teams were also very pleased with the transparent process, timely completion, and positive feedback from their vendors. By saving vendor fees, sales are more profitable, and vendors are more willing to take risks with Walgreens, especially some of the smaller vendors where this is their only sales channel.

The Walgreens team also enjoys the full suite of reporting tools Logicbroker’s platform offers. Between notifications, advanced reporting, and built-in access to Microsoft Power BI, the Walgreens team can make more informed merchandising decisions. They can analyze top performing vendors and SKUs and use this data to grow vendor relationships, uncovering new growth opportunities. Vendor scorecard reporting also helps Walgreens monitor SLAs to quickly identify and rectify any outlying issues.

Moving forward, the Logicbroker team will also automate the order and shipment data exchange between Walgreens’ distribution centers and their B2B/EDI fulfillment vendors. Traditionally, this data exchange was done through fax or email. With automation in place, communication will be streamlined and efficient, further strengthening business relationships.

With a technology stack built to scale, a better financial model, and a clear plan for online growth, the agile Walgreens team is moving faster than ever. They’re poised to reap the operational and financial benefits of automation, recognize the technical power of digital transformation and are well positioned for future success.

Highlights

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