Partnering with CVS/pharmacy
At CVS Health, our number one goal is to provide outstanding service and value to our customers – while meeting their healthcare needs and making their overall shopping experience as easy as possible. Having the products our customers want in stock is a large part of meeting our goal. We understand that working successfully with suppliers who share our values, including our promise to deliver outstanding service, and our commitment to the highest standards of integrity, help make our goal a reality.
**NEW IMPORTANT INFORMATION**
Midwest Distribution Center
Preparations are well underway for starting up the new Midwest Distribution Center, located in Kansas City, MO. It will be a full service distribution center, carrying both Front Store and Pharmacy products, with first shipments to stores occurring on October 1, 2018. For specific questions, click here for additional information about the DC. Please note: receipts of product cannot be accepted at the DC earlier than July 2, 2018.
**NEW IMPORTANT INFORMATION**
SUPPLY CHAIN PERFORMANCE PROGRAM MODIFICATIONS
As the nation’s largest pharmacy innovation company, CVS Health is committed to helping people on their path to better health. Operating an efficient and effective supply chain is key to achieving our goal and providing our customers and patients with a superior shopping experience at our CVS Pharmacy stores.
Earlier this year in January, CVS Health announced several modifications to our Supply Chain Performance program (previously known as Vendor Compliance) in order to support the optimization of the supply chain. Those changes will go into effect for any purchase order set to arrive on or after July 1, 2018. They include:
• PO Ship to Arrive (STA) Program will transition to an On Time and In Full (OTIF) Program
o New fill rate requirement in addition to the current STA requirements.
o Expense offset structure (price of non-compliance) will be modified to be a percentage of COGS rather than the current flat rate.
• New performance based program designed to drive and reward best in class service (details below).
We are excited to announce the parameters of our new performance based program designed to reward vendors providing best in class OTIF results for our supply chain:
• CVS will assess each vendor’s OTIF performance monthly to determine an effectiveness rating.
• Vendors achieving high OTIF effectiveness will see reductions in OTIF penalties according to the following table:
OTIF Rating Percent of COGs Penalty
Greater than or equal to 95% Exempt or 0%
Less than 95% but greater than or equal to 85% 1.5%
Less than 85% 3.0%
Our Supply Chain Performance Program details, requirements, and training are outlined in our CVS Routing Guide and Supplier Compliance Instructions, which can be found at www.cvssuppliers.com/logistics.
For more information about the supply chain performance program please contact [email protected].
To Access the Compliance Networks web portal please follow the link below
Additionally, the ASN onboarding and certification program is currently underway. All vendors will be contacted and will need to comply with the new ASN guidelines to become certified. We are working toward full participation by fourth quarter.
New Mandatory Forecasting EDI Document: Projected Forecasting using the 830 Document
In the coming months, CVS will be making a change to its Forecast and Replenishment system. We will use the full capability of our JDA planning system to execute on Total Planned Demand. A new Forecast Report will show total need (as Projected Receipts) by SKU/DC and be provided to our supplier community via an EDI 830 document.
The new report will include all Front Store items that are carried in the CVS DCs. The following will apply:
- Projected receipts will be planned weekly by JDA and reported each Monday by fiscal week.
- The regular and promotional demand will be represented in a single Total Demand value.
- The report will include 12 weeks of future receipt information. Total Demand projected receipts (combining Promo and Regular demand) will be included in weeks 1 through 8. Weeks 9 through 12 will reflect only regular receipts.
- The report will be updated weekly based on JDA recalculation due to ad changes, sales over/under sell, regular forecast changes, safe stock adjustments, and store/DC BOH changes.
- These orders are expected to be received by the DC by the specific week reported.
- PO STA compliance is critical to meet store demand needs.
EDI 830 mapping specifications are available at this link. CVS 830 Planning Forecast Schedule
CVS/Pharmacy Collaborative Merchandising Gateway™ (CVS CMG®)
CVS has created a new web based portal to share daily POS and Inventory data with our Front Store for-resale suppliers. This portal will provide suppliers with direct access to daily POS and Inventory data from all CVS/pharmacy stores. As this system will also be used internally, it will allow us to synchronize perspectives with our suppliers and focus more energy on selling the right products at the right time and in the right stores.
A few key features of the new portal:
- Historical POS and inventory data down to the store level
- Daily circular and TPR Sales
- Performance by store groups & geographic regions
- Daily inventory updates by distribution center, by store, by item
We have partnered with Information Resources Inc., (IRI) in the development of the CMG and will be leveraging their advanced database structure and highly flexible user interface. Access to the CMG will be on a subscription basis and Suppliers will work directly with IRI to sign up. To be eligible for the EDI data feed for POS/Inventory/Store BOH you must be partnered with IRI for the CMG program. Pricing has also been predetermined; therefore, please direct all questions regarding participation and pricing to our IRI partners at [email protected]
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