Cvs Pharma - Operations Management

Although CVS added 8.5 million customers so far in the year, approximately 7.2 million customers left during the same period. These regular customers accounted for an estimated 55 million annual prescriptions, which would have contributed to $2.5 billion in revenue. Appendix 1 shows that sub-optimal customer service was the cause of 15.33% of overall customer switches, which translates to approximately $385M of lost revenues in FY2000.

Customer service would be the first area to improve in order to retain current customers, since the industry is already known for its poor customer service. Getting this right would not only help retain light and heavy users, but also help greater customer switching from other pharmacies in favor of CVS.

The layout of the pharmacy fulfillment process does not require any major changes, however, there should be improvements within the following process areas:

Drop Off:

-As customers drop off their prescriptions, they must be asked to fill a form. This form should have queries regarding any changes made to their jobs, insurance carriers, weight and any other critical data that would impede normal flow of the data entry phase in the fulfillment process.

- Set realistic expectations with the customer by having a conservative time set for pick- ups, determined by the type of prescription, whether refill or no refill and type of third party. For example, if customer has no remaining “refills”, it may take up to 3 days to pick-up the prescription.

Data Entry:

- Input data from the new customer form to the system so that it contains the most recent customer related information by implementing an updated and easy to use IT system.

-Modify the present IT system so that data will include the dates of drug usage and algorithms to deal with it - in an effort to minimize pharmacist intervention for DUR hard stops created by “conflicts” of drugs, prescribed a very long time ago.

-Integrate the “request via telephone application”...