Success Stories

Activant Prophet 21 Helps Medical Supply Distributor Increase Fill Rates, Cut Accounts Receivable Days, and Monitor Samples

Truly understanding one's market is key to building a successful company, and Andy Wright knows his customers have business savvy.

What they don't have is time. "They're overloaded with patients, processes, and paperwork," says Wright, chief operating officer of Mercedes Medical, Inc. "They can't worry about whether or not they've ordered enough syringes or tongue depressors. And they certainly don't have time to meet face-to-face with our sales reps."

Recognizing this, Mercedes Medical employees use the telephone to keep customers abreast of the latest offerings and special promotions. And account managers regularly e-mail customers purchase reports, along with forecasts of what they might need for the week, month, or 90-day period ahead. "We work as hard as we can to bring our offices to theirs because we don't have the same physical presence as a lot of the other suppliers in our space," he says.

Has it worked? Wright thinks so. In less than 15 years, annual revenue at Mercedes Medical has grown to more than $16 million, and the company boasts one of the highest sales-per-employee ratios in the industry.

Wright credits this success to the company's sales tactics, along with a team of great people armed with the right technology. "Prophet 21 enables each of us to be as productive and proactive as possible, which means that we can offer the best service with the fewest number of employees," he says. And the company still has room to grow: "We could easily do 50 percent more in revenue without hiring more people," he says.

Trusting the Solution

In the medical supply distribution industry, excellent fill rates are not a selling point, but an expectation. "If we can't deliver the supplies doctors and lab techs need to do their jobs, they'll lose business - or worse, patients," Wright says. "And that's just not an option."

Because Prophet 21 closely monitors stock levels and offers different purchasing methods for different types of SKUs, employees can ensure that they use the appropriate technique for each product. "We really trust the solution to tell us what to order, how much to order, and when to order it," Wright says.

Because Mercedes Medical's employees have taken advantage of Prophet 21's various purchasing methods, fill rates have increased by 19 percent, while overall inventory levels have decreased. "We have stock for more than 99 percent of the orders placed at any time, and that's crucial to keeping customers," Wright says.

Overall Improved Health

Prophet 21's ability to monitor credit levels and histories has helped Mercedes Medical cut accounts receivable aged over 90 days - the accounts they lose the most money on - by about 2 percent.

Plus, automatic order and shipping acknowledgements have helped cut returns by more than 75 percent. "The automated acknowledgements notify customers exactly where we're at with their orders, and what they're getting," Wright says. "If there's an error, or if something was lost in translation, someone can catch it right away."

The solution also enables executives to track samples as they leave the company's warehouse - something they could never do before. "Medical distributors typically sample a lot of product - everything from microscope slides to butterflies and bandages - and we never saw what happened to these samples before," Wright says. Now, Prophet 21 lets Wright monitor what products sales representatives sample, how much the products cost the company, and what percentage of samples turn into sales. "We know where to put our marketing dollars now," Wright says. "And we know where sampling pays off - and where it doesn't."

Overall, Wright says that Prophet 21 is the ideal solution for anyone in distribution. "It definitely lets us do more with less, and helps us offer customers more personalized, professional service," he says.

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