Walgreens Inventory Management System


As early as 1994, Walgreens has been ahead of its competitors regarding inventory systems. Taking on new technology, which is defined as SIMS technology (strategic inventory management systems), which previously had not been applied to the pharmaceutical sales industry. This early technological approach to dealing with issues of inventory, such as over and under stocking, greatly benefitted Walgreens in the long run. This benefit was able to be transmitted to consumers as well as net profits for Walgreens due to their ability to track their inventory in all facets of its movement. The systems implemented by Walgreens allowed it to eliminate a great deal of its excess as well as virtually eradicate under stocking. However ultimately, what was most significant is what this process allowed Walgreens relative to its consumers. Walgreens, as a result, managed to cut its customer wait-time in half.

Walgreens has been able to use this basis of efficient to expand to over 4000 locations in ten years. Moving from a locally recognized Chicago pharmaceutical retail company to a major corporation, which many argue in large part is associated with its focus on inventory management. Because Walgreens monitors its inventory through every step of its process it is more difficult for anything to be lost in addition this data collecting process, which is becoming more and more utilized allows Walgreens to stay ahead of the curve.

Walgreens has been able to become the company it is today as a result of its constant revising and tireless focus on technological internal opportunities in the inventory and customer care sectors. It is this technological focus that has lead Walgreens to become a major market share holder per the NAICS able to hold it’s own against CVS and RiteAid while acquiring smaller scale pharmaceutical retailers.





12 thoughts on “Walgreens Inventory Management System

  1. As a customer, I know what it is like to have to wait around at Walgreens either for a cashier or an item possibly in the stockroom. It is quite frustrating because Walgreens is one of those you can run in and out of when you’re in a hurry. As this has been a successful method for Walgreens, it would be a good idea for other stories to implement this method. Not only is it important to know what you have in inventory because of holding costs, but the customer service one provides plays a vital role in that sort of business.

  2. Walgreens’s inventory management system always seems to be improving. I live a block a way from a Walgreens and I am never dissatisfied. It seems as if they are always improving. They now have their own brand for food and beverages “Nice”, which is way cheaper than the main brands they compare themselves to. Walgreens’s employees are also so friendly. The one I go to almost every week has efficient and effective service.

  3. It is truly an impressive benchmark for Walgreens to have improved there supply chain and inventory management that it can provide consumers with immediate demand and delivery of there most important product they need. Consumers can live if they ran out of a beverage or a healthcare item accessory, but if they dont have there pharmaceuticals it is not going to be good. Humans in our society need there drugs to survive and having them on time and knowing exactly where they are in the process of delivery is crucial. Not only does this solve the issues of demand and customer satisfaction, but it also solves the issue of Walgreens having to pay excessive holding and order costs in excess from having there pharmaceuticals in a on demand type of system. Lastly, because Walgreens can track exactly where there medications are in the process of being delivered similar to Fed-Ex and UPS, it can give consumers piece of mind knowing exactly where there medications are in the proces of being delivered for pickup. I believe that this will prove to be a very successful improvement for there business model and customer relations.

  4. By strategically catering to those who will pay the most in the convenience market, Walgreen’s has been able to produce profits needed for substantial technological investments.
    By investing their resources into building an effective business model with a small real estate footprint that is practical to build in many communities, Walgreen’s is leveraging the premiums paid for convenience to pioneer a new technology based business model.
    This Walgreen’s model can now in turn be sold to other large organizations who can benefit from smarter inventory control and have the resources to pay Walgreen’s a lucrative price.
    It is unfortunate that despite how nice Walgreen’s is, their product selection and availability reflects the convenience needs of a small percentage of the population and offers relatively little benefit to the majority of people.
    I would like to see the application of advanced technology used for a business purpose that offers a greater benefit to our society than a great select of diet sodas and prescription drugs.

  5. I have always admired Walgreen’s operation. I’m not very familiar with their inventory management system but after a little more research, it appears they have a real-time tool allowing a purchasing manager to see inventory levels from the distribution center through its final transaction on the stores’ Point-of-Sale. I’m not sure the tool is as impressive as their ability to execute the process. There are several systems in today’s market allowing retailers to do this activity. Controlling inventory for a retailer is essential today because of tight margins. It enables a company to increase their sales due to less out-of-stock issues, have better working capital due to reducing days of supply; controls shrink from employee and vendor theft due to tighter controls and lastly can reduce labor hours because not as much time is needed for ordering and inventory counting. Purchasing managers can make quicker decisions and operators have greater control. A tool is only as good as the user. Getting a manager to “buy-in” to the tool and use it is extremely impressive. Changing behavior such as this is very difficult and extremely time consuming. My compliments to Walgreens and their operations’ teams.

  6. This article reminds me that holding and shipping costs play an important role in the overall profit of a company and Walgreen’s new system tracks inventory well as I can rarely remember a product being advertised and not on the shelves. I makes me wonder what variables SIMS takes into account on demand, to forecast inventory properly.

  7. Reducing customer wait time is something that I’m sure many customers appreciate. Not only does this please current customers, but it also helps retain customers and attract new ones. Today’s world is definitely fast-paced and people are often in a hurry to accomplish tasks. Companies need to take this into consideration, and if companies don’t adapt to the fast changing environment and customer expectations, then they will have a difficult time remaining in the market as customers will seek products elsewhere. Walgreens seems to have incorporated an inventory system that not only helps them manage inventory in a more effective and efficient way, but also benefits its customers.

  8. As a former Walgreens employee, I have personal experience with Walgreens inventory management. Instead of a Walgreens store receiving an entire box of a product, the store receives plastic totes containing a specific number of all the products that that particular store needs. For example, if a store only needs five packages of soap, that store will only receive five packages of soap. This allows for every store to not have large storage rooms and reduces inventory carrying costs. Walgreens also uses point-of-sale scanning information to have immediately available current inventory availability. This lets managers know the exact number of products that they must order and keep customers satisfied.

  9. Of the many different trends that are out there in the world today, one of the most beneficial has been the increased use of technology to help in the running of businesses. It is in companies like Walgreen’s, that constantly have consumer products moving in and out of there store, that we are able to see a large impact. Integrating a system like SIMS technology can make a huge effect on efficiency and can ensure the constant steady and appropriate supply of items so, as you said, they can avoid overstocking or under stocking on their varied products. I think that with their new campaign led by the slogan “At the corner of Happy and Healthy,” coupled with their proficient inventory system, they will see even more success in the coming years.

  10. Hi, My name is Halis Ertas I am owner the Talya Herbal Company..
    I want to see my products ( Essential oil,vitamins Immunotherapy drugs and cosmetic items)
    in walgreens inventories and stock
    Who should I talk to about this topic , I would be glad if you give me an answer..
    Halis Ertas

  11. Hi,
    This is halis Ertas,
    Yesterday I had send a email to you.
    my email address was wrong now I am corrected .
    halis@talya herbal .com

Leave a Reply

Your email address will not be published. Required fields are marked *