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Pharmacy Service Improvement at Cvs Case Analysis

In: Business and Management

Submitted By kfrench91
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I. Case Introduction In 2002, CVS was the one of America’s largest retail drugstores with over 4,000 stores and $24.2 billion in revenue. Over two-thirds of the company’s revenue was generated by their pharmacies. Despite the company’s size and success, the company was facing a serious issue regarding the service at their pharmacies as they had many customers who were unhappy with the service they received. To combat these problems, CVS developed a Pharmacy Service Improvement (PSI) team to evaluate and redesign pharmacy operations at CVS retail locations.

II. PSI Opportunity
In 2000, 7.2 million regular pharmacy customers left CVS taking with them 55 million annual prescriptions that could have increased revenue by $2.5 billion. It is estimated that if the PSI team can develop a better fulfillment operations system they could prevent 60-90% of customer defections. Additionally, through the PSI’s preliminary research they have found that 44% of heavy users switch due to the poor service they receive. The loss of heavy users is significant because they bring in continuous revenue streams
In addition to simple customer happiness, through the PSI program the CVS team has the opportunity to make the people working at the CVS pharmacies happier, especially those working at the pickup window. These groups of employees must handle the continuously angry customers who are dissatisfied with their service. It is known that this job is so difficult that many of these techs leave after less than one year on the job. Thus, requiring CVS to continually hire new employees, which is a costly, and time consuming process.

III. Proposed Solution
a. Drop Off
Drop off is the first point of interaction with customers and therefore, it is important for them to have an initial good impression of CVS. Therefore, technicians need to be available at both the drive…...

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