Mexico's Oldest Distributor of Medications Looks to the Future

Q: What results has Grupo Marzam obtained from its diversification strategy in its sales channels and product offering?
A: We began seeing good results from this strategy in 2018, mostly in sales to the private sector where we developed several channels, including independent, regional and national chain pharmacies, self-service stores, private hospitals and insurers. Moreover, we are diversifying our client base to incorporate the public sector, which now represents 4 percent of our sales. Our channels in this sector are consolidated tenders, decentralized hospitals and state healthcare systems, among others. Grupo Marzam also diversified its product offering from prescription medications to now include consumer, hygiene and beauty products, generics and medical supplies and devices. All these different sectors are now growing steadily. In 2018, the company’s objective was to ensure that our growth remained sustainable for the long term.
Q: How is Grupo Marzam contributing to the development of a patient-centric model?
A: While we do not interact directly with patients, we want to create links with those that do, including government, private pharmacies, hospitals and insurers. We want to position ourselves as the best business partner for those who treat patients by ensuring efficiency, good service and dynamism. We are now analyzing our logistics platform to see if the way we work is the best solution for our clients as most of it was designed 15-20 years ago. The market, our commercial partners and consumers have changed. Technology is playing an increasing role in logistics and it is necessary to take that into account when analyzing our internal operations to see whether we need to change. We have to decide how we should change in the coming years to address the needs of the future. For instance, in some Mexican regions where we have distribution centers, business has changed enormously and we are discovering that these centers are not in the best location to meet current and future market needs.
Our new distribution center in Lerma is different from the previous 10 as it was developed with the goal of providing service to our own group companies instead of to other companies. The center will allow us to increase our efficiency and assure the optimal handling of our stock. It was the creation of this center that led us to question our internal operations to address whether they could be improved. This is the time for us to change.
Q: How will Marzam use technological trends to improve its operations?
A: For the past two years, we have been developing a technological roadmap that we will follow for the next five years. This roadmap let us identify the company’s needs and how to implement new solutions without paralyzing our operations. Technology has to improve our operations, not become an obstacle for business. Technology is allowing us to make our operations safer, faster and more dynamic while being fully focused on clients. Technology evolves on a daily basis but we are well-positioned for these changes. For instance, our entire sales force manages orders through their smartphones. They also have access to stock information online and in cities where we have a distribution center, we can offer same-day delivery in some cases. In the worst-case scenario, the product is delivered the following day. Previously, it took us between four to five days to release a credit line for a pharmacy. Now it takes us two hours.
Q: How can the technology you are introducing into your practices be used to predict market changes?
A: Close monitoring of changes in the market may allow us to predict which medications specific areas might need, based on data from that same year. We use this information internally to determine how much of a product’s stock should be allocated to a specific location. So far, we are using last year’s data to estimate the following year’s stock but we want our estimates to be in line with current market needs, not last year’s.