drugstore.com blazes the Internet trail

The virtual drugstore DC has more than doubled its throughput since our article first appeared last May.

By -- Modern Materials Handling, 2/1/2001

Surviving the woes that have befallen many Web retailers, drugstore.com has just completed the first full year in its Swedesboro, N.J. distribution center by posting some impressive numbers.

"Virtually every week we break volume records on just about any metric you can count-items picked, prescriptions shipped, pills counted," says Chris Hauser, VP of operations. "There is no question that we are among a handful of dot coms that have met or exceeded their business plans."

Much of that sucess is due to the quick customer response that the distribution center provides. The DC has doubled its throughput since our article first appeared, now processing 20,000 orders daily. More than 60% of these are repeat customers. Furthermore, the number of items each purchases has increased from an average of about four for the first order to nearly eight on subsequent orders. Hauser says that does create one problem he has to work out-many orders now exceed the size of the totes assigned to them.

drugstore.com  has also strengthened its partnerships in the past year, both with investors and with new marketing arrangements. The company now does the health and beauty Web fulfillment for financial backers Amazon.com and Rite-Aid. It also has fully integrated orders for Beauty.com, a company it acquired at about the same time the new DC opened. Additionally, drugstore.com has signed an agreement with one of the nation's largest health insurance companies. Policyholders will be able to select drugstore.com as their prescription supplier.

Speaking of RX, the facility has completed that portion of building since our article appeared. Previously, prescriptions were filled elsewhere. Due to the security and safety issues involved with prescriptions, a separate process apart from the over-the-counter materials handling had to be developed. It requires that registered pharmacists be involved throughout various stages of order filling. Four vertical carousels, two fully-automated dispensing machines, shelving, and a specially designed controlled substances area comprise the pharmacy section.

The addition of the pharmacy and increased orders have brought operational benefits to the facility.

"The more orders you get, the more efficient you become," says Hauser. "We've seen huge improvements that correspond with the growth."

Even so, the facility has plenty of room for additional growth, as it currently is at 40% of design capacity. Hauser adds that he continues to prepare for the future with plans for another facility to be built on the West Coast once this facility maxes out.

"I will take the same basic design as this DC because I think we have a winner," he says.