Pharmacy Service Improvement At Cvs A

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REV: OCTOBER 20, 2006

ANDREW F. MCAFEE

Pharmacy Service Improvement at CVS (A)
On a Thursday afternoon in July of 2002 Jon Roberts, Josh Flum, Tom Grossi, and Mitch Betses walked into a cluttered conference room at CVS headquarters in Woonsocket, Rhode Island. For several months, the room had served as the data repository, meeting space, and nerve center for the company’sPharmacy Service Initiative (PSI). Most horizontal surfaces were stacked high with folders, binders, and books, and most vertical ones were covered with whiteboards, sticky notes, sheets of paper, and hand-drawn flow charts. The four men cleared off enough space to sit down around a table. Their eyes were drawn to two recently added pieces of paper on the nearest wall. One was a list of the problems thePSI team had uncovered during a recent series of observations at CVS pharmacies around the country (Exhibit 1); the other was a description of the problems encountered over the course of a single shift by the person staffing the prescription pickup counter in one pharmacy (Exhibit 2). Flum looked at Betses. “You told us it was bad, but this bad?” “I told you there were service issues in ourpharmacies. But I have to admit, even I didn’t know the whole story.” “So what do we do about it?” “Well, we can’t have 67 solutions for the 67 problems we identified,” Roberts said. “Definitely not,” Grossi agreed. “But do you have an idea what we should do? If you erased that whiteboard and grabbed a pen, could you draw the ‘right’ flow chart for pharmacy operations?” “Actually, I think I could comepretty close. And I think my flow chart would look a lot like both of yours. I’m just not sure which parts of it would be easy to implement and which would be tricky. Mitch, you know these places better than anyone—what kinds of changes would make them really unhappy?” “Anything affecting safety. Everyone—not just the pharmacists—is a fanatic about making sure we fill prescriptions accurately andwatch out for the health of our customers. So for example if we said, ‘In the interests of efficiency we want to have the system spit out fewer alerts about drug-drug interactions,’ we would get killed. The pharmacists would march us right out the front door of their stores and tell us never to come back. And I wouldn’t blame them.” “Got it. What else?”________________________________________________________________________________________________________________
Professor Andrew F. McAfee prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2005 President and Fellows of Harvard College. To order copies or requestpermission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of HarvardBusiness School.

Purchased by Milagros Morgan (mabel.oros@upc.edu.pe) on March 23, 2012

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Pharmacy Service Improvement at CVS (A)

“Anything that increased customer waiting times. People in the pharmacy feel like customers already wait way too long when they come to pick up prescriptions, especially at peak times. They’re not in a good mood when they get to the front of the line, andit can get really ugly if after they’ve waited all that time they’re told their medicine isn’t ready.” Roberts nodded. “OK. Hand me that whiteboard eraser and pen. Here’s the new process. It doesn’t degrade safety at all, it decreases waiting time, and it improves customer satisfaction. Of course, convincing the pharmacies that’s true might not be easy.”

Pharmacy Operations at CVS
The first...