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Cvs Case

Two types of Pharmacy Customers •Light Users oFiled ~5 scripts per year o~6. 6 Mn defectors •69% of switchers due to location •13% due to service •Heavy users oFilled ~40 scripts per year o~540k defectors •44% of switchers left due to service , followed by price at 33% Revenue per script 59. 72 per script Revenue lost from defection 3,000,000,000+ 24% of revenue lost improvement in service •only 13% of light users defected because of service so defection reduction from improvement in service will be less. (3. 68% – 5. 2%) Existing Process: Drop-Off -> Data Entry -> Drug Utilization Review -> Insurance Check -> Production -> QA -> Pickup Drug Utilization Review – Checks if drug is in conflict with anything (like other drugs, weight, gender). If with conflict – HARD STOP, pharmacist would then check to clear or not clear Problems with the Process •Overall o16% of Scripts had unresolved problems at time of pickup o27% of scripts encountered substantial problem at some point in fulfillment process •Drop off Nobody is watching the in-store drop off window oNobody responds to drive-thru oTech must choose between serving in-store customers or drive-thru oCustomer calling in refill left on hold oInitial interview fails to obtain critical data oWait times made up/ over –promised oOut of Stock (OOS) not checked •Data Entry oNo Refill Allowed (6% of the scripts) •Requiring 20 mins to 3 days to resolve oDUR Hard Stop (20% of the scripts) •But over 90% of hard stops were solved by pharmacists without involving doctor oInsurance Check (17% of Scripts) Majority were easy to resolve; date of birth errors, customer changed jobs or insurers •But scripts continued to be filled even with insurance problems oPerson at DE cannot read handwriting oPrescribed medication no longer manufactured/incorrect dosage •Production and Quality Assurance oGroup of scripts arrive separately oOut of stock (7% of scripts) oCustomer not called about OOS/partial fulfillment oBaskets delivered to QA out of priority •Pick Up oTech cannot adequately explain insurance issue Tech not sure if doctor called about refill oLong lines at pick up oNo additional registers opened to ease traffic *** End of the process will always have the problems Customers find waiting more tolerable if they actually see the process happening for them. This holds true even if what is seen is simply a demonstration of effort. WHAT CVS DID Drop off –> Data Entry –> Insurance Check –> Production -> DUR -> QA -> Pick up •Do Data Entry and Insurance Check in front of the customer

How do you minimize resistance to change? Results Right stakeholders present in core teamScores for waiting time improved from 76 to 86 Core team treated “hot buttons” as constraintsOverall customer satisfaction went from 86 to 91 Executive sponsorship Note: Results from monthly phone-based survey of customers per store Full day workshop with pharmacy supervisors to get their buy-in. Trial at supervisor’s branch, then supervisor rolls out in his/her territory

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