EDI through the eyes of Miroslav Králík: Digitalization saves time, money and reputation

Pharmaceutical distribution is one of the most strictly regulated industries. Every step – from receipt of the shipment to delivery of the medicine to the pharmacy – must not only be accurately documented, but also traceable. Phoenix lékárenský velkoobchod, sro , one of the largest distributors of medicines in the Czech Republic, has therefore been relying on electronic data interchange (EDI) for many years .

We talked to manager Miroslav Králík , who is in charge of process digitalization at Phoenix, about how digitalization is changing the functioning of the entire segment.

Mr. Rabbit, how exactly does EDI – electronic data interchange – help PHOENIX meet strict legislative and regulatory requirements in the pharmaceutical industry?

Traceability is key in pharmacy. Everything must be documented and available to regulatory authorities – especially SÚKL . Previously, we checked documents manually, literally with a ruler, line by line, to see if prices, VAT and all the data were correct. Today, thanks to EDI, the system automatically evaluates errors and alerts us to discrepancies. This has reduced the volume of manual checks by about 95%.

A big advantage is also the digitized archive. Previously, we had a large warehouse full of files in Ševětín and the administration associated with it was absolutely crazy. Today, we store documents electronically and it takes a few seconds to find them. Moreover, thanks to EDI, we can better control batches, expiration dates and data accuracy, which is essential for us – these are pharmaceuticals that must be accurately recorded.

What can electronic data interchange help you with?

In addition to speed, of course, it is also about reducing administration and error rates . In many companies, paper documents are still manually transcribed into systems, which is not only time-consuming but also risky. Any mistake can mean complications in distribution or possible sanctions from regulatory authorities - and in pharmacy, the strictest is the SÚKL, which really does not tolerate errors.

Thanks to EDI, we are able to eliminate these problems. Today, we have approximately 70–75% of suppliers involved in EDI communication, which is a significantly above-average number within the pharmaceutical market in the Czech Republic.

It is also interesting that we cooperate with colleagues from Slovakia . PHOENIX there is also very active in digitalization. We compare lists of suppliers and if we see that a company is already using EDI in Slovakia, we actively approach them here as well. We are really proactive in this – we look for the right contacts, whether in IT or in the sales department, and we offer them a suitable solution.

How does the use of EDI affect customer relationships and the availability of medicines in pharmacies?

We deliver not only to our own BENU network, but also to hundreds of independent pharmacies throughout the country. For us, availability and speed are key – a pharmacy places an order and we must be able to deliver within 48 hours anywhere in the Czech Republic.

For this to work, we need to have everything perfectly processed. When a truck brings in the goods, it goes through a series of checks – from the correctness of the documents to the verification of batches and quality. Previously, this took more than a day. Today, if we have fully digitalized communication with the supplier via EDI, the whole process takes on the order of tens of minutes.

The acceleration is huge for us and for our customers. The pharmacist can immediately see in our special portal that we have the medicine in stock and therefore orders it from us. If it is not available, they have to look elsewhere. So EDI directly affects our business success.

Let's also look at your supplier relationships. How do the large pharmaceutical manufacturers and partners you work with approach digitalization?

Most of our main partners are international pharmaceutical companies or large distributors that import pharmaceuticals to the Czech Republic. PHOENIX has long strived to be a leader in digitalization in the supplier-customer relationship , which is not at all self-evident in our industry.

When I compare it to retail chains such as Kaufland, Makro or Globus, for example, the pharmaceutical market is still significantly behind in digitalization. That is why we are actively trying to convince our partners to switch to electronic document exchange.

We try to explain that EDI is not a requirement “because of PHOENIX”, but that it benefits both parties . Manufacturers and distributors want their products to reach the end customer – the patient – as quickly as possible, and EDI significantly speeds up this process.

How does faster and more reliable data exchange translate to the very end of the chain – that is, the availability of medicines for pharmacies and patients?

Availability is absolutely key for us. At our largest distribution centers, we have an average of around 35,000 items – both prescription and over-the-counter. At smaller regional warehouses, it is around 12,000 to 18,000 items, depending on the location.

It is important that our system is not divided by individual branches, but works centrally . Previously, it was common for the system to show availability separately for each distribution center - the customer saw that "they have it in Brno, they don't have it in Prague". Today, it works completely differently - the system sees the entire PHOENIX network as one interconnected organism .

So, for example, if a pharmacy in Karlovy Vary orders a medicine that is currently physically in stock in Ostrava, for example, the system will automatically evaluate it and start the process of moving the goods across the country.

Pharmacies know exactly when they have to order to be sure that the goods will arrive by 11 a.m. the next day. And we actually keep this 48-hour delivery guarantee – even if we have to transport the medicine across half the country.

Sometimes we also deal with special cases – for example, the import of unregistered or unique medicines for a specific patient on prescription, and even veterinary products. For example, we recently ensured the import of medicine for an elephant – that can also happen.

Does electronic EDI communication help you anticipate unexpected situations and prevent unpleasant problems?

EDI is absolutely essential in this regard. As soon as we receive a delivery notice from our suppliers, we have an immediate overview of what goods are coming to us. Thanks to this, we can predict receipts and better plan capacities in our warehouses and ramps.

We are currently working on automatically connecting these forecasts to our TMS (Transportation Management System), which manages delivery windows for our logistics partners - i.e. determines exactly when and where each truck will deliver the goods.

Thanks to the connection of EDI with TMS, we can better prepare operationally and in terms of capacity . We know in advance what type of medicines will arrive - whether they are ordinary goods in the so-called ambient mode (15–25 °C), refrigerated goods (2–8 °C) or opiate preparations that require a strictly monitored security regime.

Knowing this in advance allows us to properly prepare the warehouse, security, and people. It's a big difference from a situation where a truck from abroad unexpectedly arrives at the ramp and we're still figuring out what it's actually carrying.

EDI allows us to predict and organize the entire logistics in advance – from the layout of unloading to sharing data with carriers. We know exactly which ramp will be unloaded, what the temperature regime is, and we can optimize the use of people and equipment.

The goal is one thing – to make the receipt of goods as fast and efficient as possible , because the sooner the medicine goes through the receipt, the sooner it appears as available in the system and the sooner it can reach the pharmacy and the patient . And that's exactly what we're all about.

Looking to the future – how do you see the further development of electronic communication in the pharmaceutical industry? Can EDI significantly affect the stability, growth and efficiency of the entire market?

In my opinion, the future of electronic communication in pharmacy is absolutely clear . The digitization of documents is the path that the field must take. Today, we already send a large amount of data and statistics to the state administration - whether to SÚKL or other institutions. If we eliminate paper and everything goes electronic, processes will be faster, more accurate and simpler .

The result will ultimately be the most important thing – the patient will get their medicine faster .
Administration is huge today, and digital solutions can significantly reduce it.

What would you say to companies that still see EDI more as a technical obligation - something they "must have" - than as a strategic tool that can help them better manage their business and supply chain?

We encounter this quite often. The biggest obstacle is the idea that EDI is complex and difficult to implement . Companies are afraid that it will interfere with their internal processes, that it will cost a lot of time and money.

However, in cooperation with GRiT , we offer two solution options . The first is full integration - this is suitable for larger partners who have their own ERP systems. GRiT helps with the connection via data bridges and translators so that their system can handle EDI messages without the need for human intervention.

The second option is webEDI , which is ideal for smaller suppliers. Documents are managed simply via a web interface, so no technical integration or large investments are required.

We try to explain to partners that they are not doing EDI for PHOENIX . They are doing it primarily for themselves - because the vast majority of their other business partners (for example, Alza, Rohlík or large chains) have long required electronic communication.

It is only a matter of time before EDI becomes a complete standard across the market . And those who prepare for it in time have an advantage – they will gain new opportunities, speed up processes and save costs.

And honestly – in this day and age where everything is digital, we can hardly imagine anyone sending an invoice by post. It would be difficult for us to continue working with such companies. Times have simply moved on and EDI is now an essential tool for modern business .