Deshengtang Pharmaceutical Increases Inventory Turnover by 5% with RELEX Solutions 

The Chinese pharmaceutical company optimized supply chain planning with RELEX AI-driven end-to-end supply chain solution.

Deshengtang Pharmaceutical, China’s leading provider of health management and health solutions, has achieved significant results after implementing the RELEX forecasting and replenishment solution, significantly reducing inventory costs while maintaining high availability rates. By optimizing the end-to-end supply chain planning and decision-making process, Deshengtang has been able to free up their employees’ time to focus on customer service. 

Deshengtang became a RELEX customer in late 2023 to optimize its operations. Like many companies with long supply chains, Deshengtang has been continuously optimizing the inventory turnover process, seeking modern solutions, simultaneously executing smart supply chain transformation and organizational optimization, and comprehensively optimizing demand and supply chain planning decisions, to release store workforce productivity, ensure product availability, reduce inventory and increase sales. 

The implementation of the RELEX forecasting and replenishment solution across all three Deshengtang distribution centers and more than 1,000 stores began in July this year. In just one month, Deshengtang has already achieved significant results: 

• Inventory turnover increased by 5% 
• Inventory costs reduced by 2% in the first month of launch 
• Product availability rate is over 98% 

RELEX forecasting and replenishment capabilities, based on machine learning and advanced AI algorithms, has helped the pharmaceutical retailer optimize its end-to-end supply chains by balancing inventory costs and order fulfillment rates, which shows directly in the increased order availability. The ultimate goal is to serve Deshengtang’s customers in a reliable manner. 

Deshengtang Group executives reviewed the journey with RELEX: “RELEX best practices from pharmaceutical companies around the world have brought us huge value. This project not only increased our digitalization level, but also drove innovation across our business processes, ways of thinking, and the entire retail chain, becoming a new landmark node on the road to digital transformation for Deshengtang.” 

The unique characteristics of the pharmaceutical industry, such as meeting government regulations on drug availability, and managing substitution requests, pose added layers of complexity to the supply chain, and deep expertise is crucial to ensure the end-to-end value chain is optimized. 

“We work with many pharmaceutical retail customers on three continents,” said Stefano Scandelli, General Manager of Consumer Goods & Production business unit, and SVP, Sales EMEA & APAC. “We are proud of these early results as they demonstrate the depth of our expertise. Working with Deshengtang is also a great opportunity for us to broaden our understanding of pharmaceutical operations in China and the Asia-Pacific region, which will lay a solid foundation for better serving Chinese domestic and foreign pharmaceutical retail customers in the future.”