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GKO FREIGHTSuccess Cases

Company: GlaxoSmithKline (GSK)

GKO FREIGHT eliminates GSK’s freight inefficiencies

The software also allows the pharmaceutical company to systemize their processes, making them more agile and reliableGSK has over 100 years of presence in Brazil, resulting from the merger between Glaxo Wellcome and SmithKline Beecham, which occurred in 2001. The corporation invests about £3.5 billion pounds in the research and development of new medicines worldwide, representing one of the greatest contributions of the pharmaceutical sector.

GlaxoSmithKline distributes products in 130 countries and has two factories located in Rio de Janeiro that supply the domestic market and 11 other Latin American countries.

It has capacity to manufacture over 238 million units of tablets, creams, ointments and liquids in industrial units in Rio de Janeiro. GSK invested 250 million dollars, in the recent years, in technological modernization and expansion of the production capacity.

In January 1997, when it was still called Glaxo Wellcome, the company was a pioneer in the implementation of the software GKO FREIGHT, yet written in DOS language, nearly two years after its launch in October 1995. Before implementing the solution, the Excel spreadsheets were the tools used to manage the company’s freight, covering up inefficiencies and causing losses from billing errors or information from carriers.

GKO’s director, Ricardo Gorodovits, explains that at the time, the purpose of the software’s implementation was fully directed to the freight audit, to ensure that payments corresponded to the amounts owed.

"The concern with distribution was incipient in Brazil, many companies simply ignored their problems and charges were paid without any control. Glaxo Wellcome pioneered the choice of a tool that would support the improvement of its efficiency. "

The Software

Initially, there was no demand for functional enhancements within GKO FREIGHT, by Glaxo Wellcome: the software attended to the company’s needs and, from the functionalities disposed by the tool, GSK gradually expanded its use. Over time, the corporation extended its focus to the control of delivery dates. For a period of time there was low use of the system, and the situation only reversed with the merger of Glaxo with SmithKline.

The merger of the companies brought up pressing needs: on the eve of the merger, GKO was consulted by SmithKline Beecham’s logistics team, about the implementation of the software GKO FREIGHT and then leveling up to Glaxo, which by this time was already using a more advanced system programmed in Windows language. The decision was suspended, but in the post-merger, GKO FREIGHT was maintained by GlaxoSmithKline and, moreover, gained new life thanks to the demands motivated by the company's board.

"This stimulus was reversed on investment in training and the software’s upgrade, from the hiring of features to improve the management of time in hours," says GKO’s executive.

The new features provided product shelf life visibility and measurement of losses from freight charged as 'minimum freight', helping to define new parameters for negotiating with carriers and new trade policies.

GSK’s logistics information analyst, Moyses Alves Jr, complements Gorodovits’ comments, explaining that post-merger period GKO FREIGHT now has under his control all modes of transport - road and air - used by the company to issue products, including, at the request of the manufacturer of medicines, control of transport in refrigerated trucks, known internally as "Popsicle".

"The solution, then, provided detailed information to measure the performance of shipments and carriers divided by modes of transportation, types of packaging, product types, quantities, packaging code, destinations, journeys, delivery forecasts, among other data," he describes.

Another feature of the software which was compounded GSK's needs, according to Alves Jr, is related to the communication with carriers for the preparation of invoices. The system generates advanced information in text files for the carrier to issue invoices, eliminating the transit of papers and data conflicts.

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Results

Moyses reports that since the implementation of the features and personalized settings of GKO FREIGHT with GSK’s business, the results have been unquestionably positive. In financial terms, the loss of about a million dollars per year, that the company recorded prior to the solution, was sealed, whereas with respect to internal processes, much progress has been made in setting up the routing freight forwarding, and simulation comparison freight, registration of invoices issued and visualization performance of each carrier.

"GKO FREIGHT provided agility to our administrative proceedings related to the dispatch from the interface with the corporate system, it also facilitated and enhanced the accuracy of the ledger," says Alves Jr.

"The corporate system generates invoices directly to GKO FREIGHT, which returns information of to pay taxes from transportation knowledge generated for future payments. Thus, we reduced from three days to 10 minutes all the calculation and accounting data generation. "

From the visibility provided by GKO FREIGHT to GSK, Alves Jr. says the company wants to extract more profit from its features, leveraging relationships with carriers from an even more thorough evaluation of services, with the aid of more sophisticated param-eters than the current ones available. GSK’s analyst reveals that, in the future, the company intends to introduce within GKO FREIGHT a functionality for calculating return shipping, which at the moment is unimpressive - represents around 5% of payments in terms of the company’s freight cost.

"GKO FREIGHT is undoubtedly a powerful tool because it not only allows us to quickly obtain analytical data for decision making, but also gave us back efficiency, which makes so much difference in distribution logistics."

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