Investing in Technology for Better, Faster Logistics

Q: How has Distribuidora Levic’s online sales division grown? What short-term impact will this have on the company?

A: By May 2018, our online sales division represented 20 percent of our sales. Clients like the new platform because it is easy to use and they have slowly migrated to it. Some are reluctant to try the new technology but most are adopting it. I would like to see this area grow to 70 percent of our sales within five years.

Q: How is Distribuidora Levic incorporating new technologies to offer better logistics solutions?

A: Our distribution center in Vallejo, Mexico City, which will be finished by December 2018, will have a surface of approximately 8,000m2 and a total construction of 80,000m3. It will be one of the most technologicallyadvanced warehouses in Mexico as it will automatically sort 2,460 daily products without human input. This will allow us to provide better and faster logistics solutions. The center will also use a 100 percent automated robot.

Q: What market trends has Distribuidora Levic identified in the pharmaceutical sector?

A: Generics continue to grow, since patented medicines remain inaccessible for a large percentage of the population. However, some laboratories are introducing brands at more accessible prices. In 2017, we sold mainly generics but we have made an effort to increase our percentage of patented medicines, which now represent between 18 and 20 percent of our sales. We have also introduced new brands of patented drugs. The new plant in Vallejo will be key to increase our patented medicines market.

Q: How has the growing demand for generics affected local manufacturers?

A: In Mexico, the demand for generic medications is higher than their production; regulators have sometimes acted as barriers for local manufacturers, causing a lack of complete coverage for about 40 percent of the medicines that Mexicans need. For that reason, 2017 was a complex year for the Mexican pharmaceutical sector. The local pharmaceutical industry is among the strongest sectors in Mexico and competes with international companies, which is unusual in the country. It is important to strengthen Mexico’s pharmaceutical industry by consolidating local research projects and providing medicine manufacturers with fiscal incentives. It is also necessary for regulators to work alongside manufacturers to guarantee accessibility to medications.

Q: How does Distribuidora Levic support independent pharmacies?

A: There is no real data on the market share of independent pharmacies. The goal is to support independent pharmacies and make them more competitive against larger pharmacy chains. Independent pharmacies can compete by providing better customer services and by developing differentiated products for their captive market. Independent pharmacies must also take advantage of the trust they have generated among their customer base, as they are often more widely accepted in communities than pharmacy chains. Our role is to provide these pharmacies with products at competitive prices. There are many independent pharmacies in Mexico City and State of Mexico, but they are also common in small regions where chains are unwilling to invest.

Q: What are Distribuidora Levic’s growth plans in Mexico and abroad?

A: In 2017, we began operations in Belize and although we will continue developing this region, we will focus more on Mexico, where demand is rising significantly. We are planning to expand into distribution for hospitals, clinics and pharmacy chains and will continue investing in technology and R&D for better logistics. Our goal is to continue growing and providing excellent services to the market. Some of our projects are already incorporating Industry 4.0 principles. Distribuidora Levic is committed to the healthcare of Mexicans.