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Cvs Pharmacy Houston

The ranking manager in charge of day-to-day execution at CVS' more than 4,000 stores draws a clear picture of the role store operations plays at the sprawling drug store powerhouse. It s a deceptively simple picture that mirrors the company's near-obsessive concern with customer service--a picture that every employee from the area vice presidents to the teens working on the sales floor can grasp instantly. And it serves as well as any other summation as a kind of ad hoc mission statement for CVS.

"We're responsible for the customer's experience as they enter our stores. That's what store operations is all about," Larry Merlo, executive vice p resident of stores, explained in an interview last month.

Merlo, a 12-year veteran of the company, ticked off the key components of success in that mission, as measured by the store operations department at CVS. They're questions that he and his field managers ask themselves, their store managers and the stores' customers continually. "Are we making CVS easy for our customers? Are we satisfying our customers' shopping experience with the interactions they have with our colleagues in the stores--from the crew members working the registers to the pharmacists?" Merlo began. "Are we able to satisfy their needs? Did they find everything they were looking for? Were they able to get in and out of the store quickly? Did they get the advice they were looking for about their medications?"

CVS has made improving customer service its top goal. The store operations team that Merlo heads up is organized around that mission.

"All of us have goals, from [president and chief executive] Tom Ryan to me to all our field management and store teams," said Merlo. "One of the roles of field management is [identifying] the things we know we can do to make the shopping experience easier. And if that means knocking sown obstacles in the way or providing a higher level of support to make those things happen, that s what we're there to do.

"We're constantly asking ourselves to make it easier for our customers," Merlo added. "We know that if we make it easier for our employees, we will make it easier for our customers."

CVS recently enhanced its operational team to put operational oversight for pharmacy under the team Merlo runs, giving him responsibility f or customer service and execution at both the pharmacy and front end of the store. The blending of the two sides under common management extends from the central office all the way down through the stores.

"Certainly, the management of pharmacy has its own nuances and challenges that are different from the front of the store," said the executive. "But the customer doesn't see CVS as two separate stores, and we're not going to manage it as two stores. We're going to support each side with the appropriate resources."

Weaving together pharmacy and front end

In line with the enhancements, former area vice president Jon Roberts became senior vice president of store operations in late summer, in charge of managing the front-of-store and pharmacy operations teams. Both Roberts and Jim Smith, senior vice president of health care services, report to Merlo.

"We're combining pharmacy and front-store operations into one group, Roberts explained. "Previously, pharmacy operations was in the health care services group, and we had a separate store operations department that was responsible for the front of the store. So we're aligning internally our store operations team to reflect what we actually have out in the field, where we have district managers who are responsible for both the front of the store and the pharmacy.

The reason, Roberts continued, is clear-cut and central to the company's focus on satisfying customers. "We believe this will allow us to put a higher level of focus around supporting the stores and helping them make it easier for our customers.

"It will also give us some of the synergy we need by having front store and pharmacy working together for the customer," he added.

In line with those goals, Roberts also has been designated as head of a new, cross-functional task force--drawn from the ranks of support people and field management throughout the company--to study and improve service at the pharmacy counter. Both he and his boss emphasize that to better serve their customers, CVS' 13,000 pharmacists must have more help each day as they wade through a thicket of claims adjudication procedures and other third party administration tasks. Those tasks, said Merlo, take up far too much of pharmacists' time and reduce their ability to counsel and work with local physicians to better manage their patients' conditions.

Those issues come up often at the periodic breakfast meetings that Merlo, Roberts and other central-office executives hold with the area vice presidents, local field managers store managers and pharmacists.

"The pharmacists at our breakfast meetings often talk about the third party challenges and the bureaucracy they go through... to adjudicate a c aim," said Merlo. "Customers don't understand eligibility issues, adjudicating claims and other issues. Our pharmacists are trying to intercede on their customers' behalf, and we've got to figure out a way to make that easier.

"The pharmacists are trying to do the right thing, but they're put in the middle between the PBM managing the benefit and the customers' needs," he continued. "So how do we eliminate that barrier for our pharmacists and make it easier for them to do their jobs? We need to eliminate that level of bureaucracy. And we need to make it easier for physicians to work with pharmacists, too, on the patients' behalf."

Eliminating those barriers and giving pharmacists the tools to focus on patient care and service, added Roberts, is now his chief mission. "Our focus is pharmacy," he told Drug Store News. "My No. 1 priority is pharmacy service.

What customers want

Thus, Roberts' team is charged with "developing continuous improvement processes and tools and programs support the stores," he explained.

"We think it's pretty simple what customers are looking for" at the pharmacy counter, added Roberts. "They don't want to wait more than 15 minutes to get a prescription filled. They want the prescription to be in stock. And if they called in or dropped off a script, they want it ready when promised."

Beyond that, he said: "They want the pharmacists and technicians to be courteous and professional. And they want quality assurance around their prescriptions."

All those goals fall under the umbrella program CVS has created to improve work flow and patient service at the pharmacy. Dubbed Excellence in Pharmacy Innovation and Care, or EPIC, the program includes both technological enhancements and a shifting of work assignments. In the words of CVS' most recent report to shareholders, "EPIC enables trained, licensed technicians to perform many of the administrative tasks associated with filling a prescription, freeing pharmacists to do more of what they have devoted their careers to doing- assuring quality, spotting potential drug interactions and counseling patients."

Roberts added: "The EPIC system has really done a great job in improving service and productivity, and it's repositioned our pharmacists to focus on quality assurance and customer interaction. We've taken most of the production components of the script-filling process and moved that over to the technician staff. So I think we've been able to do a lot of things with this new system to service and productivity."

Indeed CVS has developed a "Ready When Promised" promotional campaign around its ability to meet customers' expectations at the prescription counter. "One of the things this system has enabled us to do that links up with the Ready When Promised wait time," said Roberts, "is allow us to prioritize the work Load and smooth it over the day. That also has enabled us to improve service."

Improving in-stocks

At the front end, CVS also has developed a major tool to improve its supply chain capabilities and cut way down on out-of-stocks, in keeping with its customer-service mantra. That system, called Assisted Inventory Management, or AIM, has been in rapid rollout to all stores since February following a test

"We'll be done by the end of October," said Merlo. "All the folks responsible did an outstanding job getting that system rolled out.

"We're already seeing an in-stock position improvement," said Merlo. "It's a benefit to our customers. At the same time, we've greatly simplified the process for managers and crew members. What used to take time spent on reordering has probably been reduced by two-thirds."

Equally important, he said, "We've improved the accuracy of the process. So we think that is really a home run for us an d will bring us to another level."

Under the old inventory replenishment and order-entry system, Merlo explained, store managers had to "touch every item" on the shelves to make accurate counts and trigger replenishment orders via hand-held devices. "With AIM, they're getting help," he asserted. "The stores are really ordering now by exception than by having to touch each and every item.

Armed with the processing power of the AIM system and a more data-driven system for replenishing shelves and adjusting inventory levels for promotions and other events, said Merlo, CVS also can plan its buying and reorder cycles more efficiently. That makes AIM another powerful tool that allows store managers to improve customer service and avoid out-of-stocks.

"We know the historic seasonal demand spikes [for product]," said Merlo. "Now we can retrieve that information and be more proactive, having product in the store before something hap p ens rat her than just react to the sudden spike in demand because of a seasonal trend or promotion."

Making corporate communications more effective

Store operations at CVS are still largely concentrated in the Eastern third of the United States, but within that vast sphere are still plenty of growth and fill-in opportunities in dozens of densely population major markets and smaller towns. What s more, CVS' store operations team is laying the groundwork for a major push into Texas, Nevada and other Western states as CVS gains a foothold in Dallas/Ft. Worth, Houston, Phoenix, Las Vegas and other fast-growth regions.

The chain's increasing size and complexity have made the task of developing seamless communication procedures with each store and district a critical component of success. Under Merlo, both the pharmacy and front-end side of store operations are working to improve communications with district and store managers. Considering how rapidly the company has grown in recent years he said it's critical to keep all stores and districts connected with a strong web of back-and-forth communication to create consistency in CVS' message and appeal to consumers.

"We've grown exponentially, from 30,000 to more than 110,000 associates," said Merlo. "So certainly there's a challenge in making [good, timely communication] a reality. How do we get the message out to 13,000 pharmacists, 4,000 store managers and 110,000 associates, most of who are working in the stores?"

Merlo and his staff use a variety of methods. "Each month we publish a marketing package for each store with the upcoming programs and their role in executing programs in their store," Roberts explained. "We also give the managers a view, looking forward quarter by quarter, of the various work loads they can expect in their store, which enables them to schedule their store staff to accomplish that work load. And we actually manage the workload flow to the stores. We coordinate with all the departments across the company the work load they're asking the stores to do.

"We make sure the work load we are sending to the stores is manageable based on the labor hours they have, so they don't have these peaks and valleys," he added.

In addition, said Roberts, CVS' operations team spends a lot of time measuring each store's progress, using a variety of metrics and sharing the results constantly with the individual store managers and their district managers. "We have a store execution report card where we measure what we consider key activities in the stores--like planograms completed, merchandising programs executed, new items cut in," Roberts noted.

The team also surveys CVS' customers constantly to gauge the levels of service and effectiveness of programs in each of its stores. customers are solicited to participate in the surveys through messages on their cash register receipts. "They'll see an 800 number to call on their receipts, and we ask them using an [interactive voice response] touch-tone system to rate their shopping experience on a scale of one to five," said Roberts. "We measure service both in front and pharmacy ... and we receive about 120 surveys per store per year around the key service metrics."

Added Merlo: "We're proud of our customer feedback procedures. We believe we know what is most important to our customers, and we feel good about our ability to measure that on a store-by-store basis. We've been able to create metrics and a score card that allows us to keep that pulse on a monthly basis."

Thus far, said Merlo: "We've gotten close to a million responses from customers across the country. We're able to track those responses by store, and we roll t em u by districts and regions. Store managers are able to retrieve specific comments about their store."

Thus, added Roberts, store managers "can actually see how their store is doing each month on each metric and whether they're improving, staying the same or losing ground. And we ask the field [managers] to put action plans against the different areas of opportunity."

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