Value-added services

Aside from technology developments, there is always a major emphasis on value added services. It includes the design concept to fabricator that continually tries to find ways to augment or reduce steps during manufacture with the target of reducing costs. 

Remember that proponents of airline deregulation argued for price benefits of competition, but they did not foresee how it would revolutionize the logistics functions of corporate America through the rise of companies such as Federal Express. Similarly, those who advocated telecommunications competition did not anticipate the new value-added services provided at the switch and whole new categories of customer-owned equipment connected to the network. 

The existence of pharmaceutical-focused distributors with a value-added service philosophy can provide tremendous advantages to the user, especially in the United States, which is said to bear the burden of R D by a large margin over other areas... 

Ability to Consolidate Diverse Materials and Offer Value-Added Services... 

Focusing on the complex area of the market where chemicals are required at short notice and in fairly small quantities, chemical distributors have developed over time into important players in the value chain from producers to consumers in a broad role, serving as supply chain managers offering a wide range of logistics and value-added services. 

Leading distributors offer a broad spectrum of these services. Brenntag, for example, as a full-line distributor of industrial and specialty chemicals, provides a one-stop shop of over 25,000 chemical products for more than 150,000 customers, combined with a broad range of related value-added services such as mixing, blending, repackaging, and technical services and support. 

Outsourcing by chemical producers as chemical producers faced up to increasing competition over the past decades, they attempted not only to expand their market positions geographically, but also to improve operational efficiency by focusing on their core activities. As a result, suppliers have continuously outsourced sales and logistics functions as well as related value-added services to third-party distributors. 

In addition, a focus on strategic distributors assures a coordinated approach to customers and markets throughout the world, with international distributors being able to ensure an adequate level of value-added services. 

Over the course of time, chemical distributors have developed in the complex small-volume, rapid-response area of chemical distribution into playing an important role in the supply chain from chemical producers to consumers. In addition to fundamental delivery capabilities, distributors offer value-added services, skills in complying with environmental and safety standards, and economy of delivery to remote and small customers. 

After recent consolidation and globalization efforts, many chemical companies are now geared towards creating better value for customers. The main way of achieving this is to offer customer-specific products and services. Bundling commoditized products with customer-specific value-added services allows customers to outsource manufacturing tasks and services. 

A common example of a service in a community pharmacy is the filling of a prescription that is not compounded. In this case, a pharmacist, with the assistance of technicians and clerks, is adding value to the product that was made by a pharmaceutical company. The pharmacist is packaging the exact amount needed by the patient, adding information that will help the patient to take it appropriately, and billing the patients insurance company for the cost of the prescription. Pharmacists may add additional value to this product, and these value-added services illustrate the similarities to product creation. 

Describe the similarities and differences in the operational budgets prepared by pharmaceutical manufacturers, health system pharmacies offering value-added services, community pharmacies selling merchandise, and nonprofit pharmacy organizations. 

New services contemplated by the pharmacy or other pharmacies (For example, drug stores are continuing to develop value-added services, which may increase the demand for certain categories of prescriptions.)... 

After assigning costs to the activity cost pools in stage 1, cost drivers are identified that are appropriate for each cost pool. Then, in stage 2, the overhead costs are allocated from each activity cost pool to cost objects (e.g., prescriptions, value-added services, and patients)... 

Do they offer any value-added services Will they help with advertising and promotion, provide inventory reports and analyses, or assist with pharmacy layout and design Do they offer a private-label line of products ... 

Another option used by pharmacies is to purchase directly from a pharmaceutical manufacturer. However, many manufacturers have substantial minimum purchase requirements, making it less favorable to buy from the manufacturer. Pharmacies may be receiving discounts based on volume purchased from the wholesaler thereby giving an incentive to the pharmacy to buy most of its products from one wholesaler. Wholesalers also offer next-day delivery and other value-added services that help pharmacy managers minimize inventory costs. Thus most pharmacies do not purchase products from manufacturers very often. 

The next step of the business planning process is to explore the prospects for various types of value-added services. At this point it is helpful to have several ideas for value-added services that could be implemented. One of the best ways to do this is to observe and speak with pharmacy department customers. This is essential to learn more about their needs and can help business planners learn more about their environments (which will be important later in the process). Other sources for ideas about value-added pharmacy services include colleagues, professional organizations, pharmacy magazines and journals, professional meetings and seminars, the Internet, consultants, books, and full-service wholesalers. 

Professional pharmacy and medical organizations [e.g., the American Pharmacists Association (APhA), the American Society of Health-System Pharmacists (ASHP), the National Community Pharmcists Association (NCPA), and the American Medical Association (AMA)] and health care organizations [e.g., the American Diabetes Association (ADA) or the American Heart Association (AHA)] also provide valuable information about many health conditions and value-added services. This information is important not only in the development of a service but also in justifying the need for a service with consumers and administrators. These organizations also provide treatment guidelines and additional resources that can be used when developing an operations plan for a service (see Chapter 25). 

While learning more about potential value-added pharmacy services, it is a good idea for business planners to speak with others about their ideas. Many pharmacists who have already developed value-added services will gladly share what they have learned. Visiting a setting where value-added pharmacy services are already in place not only provides evidence of how these services actually work but also will answer many questions pharmacists may have later in the planning process. Other pharmacists, technicians, and pharmacy employees may have experienced value-added services in their prior practice experiences and may provide insights into how they work. Other health care professionals can provide feedback about additional services that they or their patients may need. Payers [e.g., in-... 

When pharmacists think of potential consumers of their value-added services, the first (and often only) group they think about is patients. After all, pharmacists interact with patients on a daily basis. While patients are essential to the success of most value-added pharmacy services, pharmacists must remember that groups of consumers other than patients may benefit from pharmacy services as well. 

Another aspect of the market for any value-added pharmacy services that must be considered is the competition. When identifying competitors, it is important to acknowledge exactly what services the pharmacy will pursue. When identifying competitors for value-added services, pharmacists often limit their search to other pharmacies and pharmacists. While this may be appropriate for traditional pharmacy goods and services (e.g., dispensing drug products), pharmacists considering new value-added services must cast a much broader net. Many value-added services offered by pharmacists are still at the introductory point of their product life cycles. Few, if any, other pharmacies may offer these services in a particular market. On the other hand, other competitors maybe very well established. For example, while diabetes education services currently are not offered in many community pharmacies, physicians and certified diabetes educators (who can be physicians, nurses, pharmacists, and other health care professionals) have provided this service for a number of years (Zrebiec, 2001). 

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