Q&A: KNAPP’s Sullivan discusses keeping supply chain strong

Drug Store News: Tell us about KNAPP.
Brian Sullivan: KNAPP is an Austrian-based company that is a global leader in automated fulfillment systems. We have been serving the healthcare industry since the 1960s. Our reach extends across the breadth of the healthcare supply chain from the manufacturers and wholesalers to the centralized and retail operations of our pharmacy customers. We serve our U.S. and Canadian customers from our North American headquarters near Atlanta. 

DSN: How can retailers better manage their supply chain?
BS: We are involved in a number of initiatives that our retail customers are either operating now or have in the development stages: Centralized pharmacy operations: Whether for central filling customer orders for stores, mail, long-term care or specialty, this trend continues to grow. KNAPP has been in this space for over 15 years and provides one of the most automated solutions available for our retail customers. When it makes sense, these systems offset the margin erosion of DIR and GER fees by reducing the in-store costs and staffing requirements for prescription fulfillment, consolidating inventory and improving their accuracy through automated prescription fulfillment; DSCSCA: KNAPP has been working with our manufacturer and wholesaler customers since 2013 to meet the requirements of the Drug Supply Chain Security Act automatically with our vision technologies. Retailers are just starting to engage in this process to meet their obligations by the 2023 deadline. KNAPP is using our learnings to help them automate these processes; and Micro-fulfillment centers: We have seen a significant move towards micro-fulfillment centers on both the grocery and the pharmacy sides of our customers’ businesses. This was initially being adapted to optimize costs structures and better serve customers in the digital market. This has accelerated since COVID to provide greater opportunities for digital ordering of prescriptions and OTC meds with reduced touches for cost and safety. KNAPP’s Apostore retail pharmacy systems use digital ordering married to 24/7 automated dispensing systems to help meet these needs.

DSN: What are the challenges to retailers? How can you help?
BS: They are many. Some, I have alluded to already, are addressed in the regulatory fees and the upcoming compliance requirements that the pharmacies face. One specific challenge that we see is the ongoing technician shortage. This existing challenge ballooned with the surge of prescription orders at the beginning of COVID. The shortage and compensation pressures that our retail customers are seeing has accelerated their need to automate their processes. KNAPP is assisting their efforts in multiple ways. 

Our centralized pharmacy systems significantly reduce the technician staffing requirements and associated costs for the retail pharmacies. Maintenance medications are already supplied to the retail store as complete orders, so the fewer technicians are required and are able to spend more time interfacing with patients. 

Additionally, KNAPP’s Apostore automated storage and retrieval systems minimize the time and steps required of the technicians to fill prescription and OTC orders. Additionally, because all medication is dispensed first to expire, first out, the cost of expired medications is reduced.

DSN: What have the effects of COVID-19 been and how are you reacting?
BS: We have been lucky. Because KNAPP is part of the healthcare supply chain, we were able to keep moving and accelerate most of the projects that we have been working on. Our customers have been extraordinarily challenged by the spikes in orders and are determined not to get caught in this situation again going forward. 

Automation projects have increased their size and scope to assure greater redundancy and coverage for disaster recovery. Centralized pharmacies that might have targeted 60,000 prescriptions per day have increased to 80,000 or 90,000 prescriptions daily. Our smaller micro-pharmacy projects have increased from 20 to 25 locations. 

The move towards touchless, digital ordering, as well as off-hours shopping has many of our customers accelerating implementation of the hub and spoke micro-fulfillment centers with automated dispensing in our Apostore systems