Walgreens is reportedly moving forward with a supply chain automation pilot involving prescription medications.
According to Pymnts (reporting on an article in the Wall Street Journal), Walgreens is opening new robotic fulfillment centers dedicated to packing prescription medications for pharmacy customers. Walgreens originally opened an automated micro-fulfillment center specifically focused on rapid fulfillment of customer prescription orders in the Dallas area.
Micro-fulfillment centers use robotic technology to automate tasks such as picking and packing, reducing the need for manual labor and also enabling more inventory to fit into a smaller space. The Dallas center reportedly fills 35,000 prescriptions for 500 stores every day, reducing pharmacist workload by 25% and producing cost savings of about $1 billion per year.
“This frees up the capacity of our most-skilled professionals,” Rina Shah, group VP, pharmacy of the future & healthcare segment strategy, Walgreens” said to the Wall Street Journal. “We looked at our system and said, ‘Why are we filling prescriptions the way we did in 1995?’”
As prescription volumes have risen post-COVID-19 pandemic, a national shortage of pharmacists has forced Walgreens to reduce pharmacy hours and offer signing bonuses as high as $75,000 to new pharmacists in select markets. The median annual salary for pharmacists was $128,570 in 2021, according to the U.S. Bureau of Labor Statistics.
Walgreens expects to open 22 pharmacy micro-fulfillment centers across the U.S. by 2025, by which point as much as half of its total prescription volume could be automatically filled. Human pharmacists will continue manually filling prescription orders that involve controlled substances and/or are time-sensitive. CNBC previously reported that chief Walgreens rival CVS is also using micro-fulfillment for some prescription orders.
Walgreens increases tech focus
Walgreens is pushing ahead with robotic prescription fulfillment as it is also bringing a new technology head on board and aligning its board of directors more with technology and innovation. The drugstore giant recently named former Michaels Company CIO Hsiao Wang as CIO.
Wang will lead the strategy for Walgreens’ IT function and the implementation of technology and digital innovation, with an emphasis on its digital experience for customers and patients, including technology-enabled healthcare solutions for Walgreens and Walgreens Health.
In other tech-focused moves, Walgreens recently appointed IBM global chief data officer Inderpal Bhandari to its board of directors. Bhandari has served as IBM’s global chief data officer since 2015. In this position, Bhandari is responsible for the company’s data strategy.
And the finance committee of Walgreens Boots Alliance’s board of directors has been reconstituted as the finance and technology committee, which the company says reflects the importance and significance of technology to achieving the company’s goals. As Walgreens accelerates its healthcare platform and global infrastructure, the committee will govern the strategic growth of its technology, including major customer initiatives, emerging innovations and significant trends.
Based in Deerfield, Ill., Walgreens operates nearly 9,000 retail locations across America, Puerto Rico, and the U.S. Virgin Islands.