Hong Xiang Yi Xin Tang: Creating an Integrated, Real-Time Drug Retailing Platform with SAP HANA

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1 2015 SAP SE or an SAP affiliate company. All rights reserved. Hong Xiang Yi Xin Tang: Creating an Integrated, Real-Time Drug Retailing Platform with SAP HANA Hong Xiang Yi Xin Tang Pharmaceutical Group Ltd. (HXYXT), the largest pharmaceutical retailer in southwest China, has teamed with the SAP Active Global Support organization to build a highly effective, real-time, integrated drug retailing platform based on SAP HANA. This allows HXYXT to respond rapidly to changing markets and create a strong foundation for sustainable growth.

2 Company Hong Xiang Yi Xin Tang Pharmaceutical (Group) Ltd. Headquarters Kunming, China Industry Life sciences pharmaceuticals Products and Services Retail sales of Chinese and Western pharmaceuticals; cultivating and processing Chinese herbal medicine Employees 14,000 Revenue 4 billion yuan (US$644 million) Web Site Partner SAP Active Global Support organization BUSINESS TRANSFORMATION Objectives Build an information infrastructure that would allow rapid, sustainable growth of the retail pharmaceutical business Enable significantly better data processing and analytics Increase operational effectiveness Teamed with the SAP Active Global Support organization for smooth deployment of the SAP HANA platform Moved daily transaction processing and Big Data analysis onto a single in-memory computing platform Benefits Shortest possible response time to market changes Comprehensive support for effective resource allocation over multiple networks and products Faster business processes and smarter business innovation More rapid and accurate reporting and analysis Read more SAP solutions have always had a rigorous and robust architecture; this was important in our selection of SAP for our core integrated platform. Li Wencheng, CIO, Yunnan Hong Xiang Yi Xin Tang Pharmaceutical (Group) Ltd. 40x Faster information delivery More effective Resource allocation More accurate Reporting and analysis 2 / 6

3 Seeking new technology to manage information for rapid growth China has one of the world s fastest-growing pharmaceutical sectors. The country has huge developmental opportunities for pharmaceutical retail enterprises due to the rise in per capita expenditure on medical costs, the growing elderly population, the changing conception of health within the populace, and other factors. Fueled by this, HXYXT has opened over 2,400 direct retail pharmacies since Sustaining healthy, rapid growth is HXYXT s top priority. The company realized this required building an information infrastructure that would allow it to meet international standards, drive and manage change and innovation, and improve its core competitiveness. By 2009, HXYXT had incorporated business intelligence (BI) systems; but with the rapid expansion in retail stores and deepening system applications, both the volume of data and the demand for analysis at the company increased exponentially, leading to a sharp decline in BI efficiency. By 2013 the company s data volume had reached 9 TB, and many database users were locked out at the beginning of each month so that core departments could gain access, which severely decreased operational effectiveness. HXYXT recognized that new technology was needed to support a substantially higher level of data processing and analytics, and it soon decided on the SAP HANA platform. The pharmaceutical retail industry produces huge amounts of data. With the continuous growth of Big Data, we are seeing huge business opportunities. At the same time, we are facing unprecedented challenges. Li Wencheng, CIO, Yunnan Hong Xiang Yi Xin Tang Pharmaceutical (Group) Ltd. 3 / 6

4 Teaming with SAP AGS for a smooth implementation HXYXT has a long-standing strategic partnership with SAP. In 2007 it was the first Chinese pharmaceutical distribution company to successfully implement SAP solutions, and over the years it has been impressed by their maturity, stability, and high degree of integration. HXYXT also recognized the outstanding implementation experience offered by SAP Active Global Support (SAP AGS) for international enterprises. During implementation as well as the subsequent operation and maintenance processes, SAP AGS provides smooth integration of closed-loop professional services, effectively lowering implementation costs while supporting successful system deployment. The organization can also help establish industry best practices and industry-specific solutions tailored to the enterprise s requirements. The project to deploy SAP HANA at HXYXT was launched in July With SAP HANA, daily transaction processing and Big Data analysis were shifted into a single in-memory computing platform, giving HXYXT the shortest possible response time to market changes and the ability to achieve smarter business innovation, faster business processes, and more convenient business interactions. HXYXT has achieved more accurate reporting and analysis and has established an innovative data-driven business model to support effective resource allocation over multiple networks and products. 4 / 6

5 Building an effective retail management system in real time SAP HANA has helped HXYXT achieve major improvements in its drug retailing business. First, with the platform s high-performance real-time computing, users can access employee performance results from any store within two seconds. This greatly enhances computational efficiency, accuracy of data, and traceability, which will indirectly drive sales initiative among first-line employees. SAP HANA has also helped resolve storage allocation challenges for HXYXT. The company has not only optimized allocation of products but also decreased losses caused by shortages or excessively high inventory, thus maximizing profits. In addition, SAP HANA has helped with product correlation analysis and sales forecasting, giving HXYXT accurate insight into associations between different drug types and the ability to drive joint sales of traditional Chinese and Western medicine. HXYXT has also taken full advantage of the in-memory computing power and predictive analysis algorithms in SAP HANA to build a unique mobile data platform for daily and monthly reports. Managers at all levels can check store statuses in real time, improving collections management, membership services, merchandise management, store operations and monitoring, and other functions. From its home office to mobile offices in stores, HXYXT now has highly effective point-of-sale (POS) business analysis reports, resulting in more transparent business management and better decision making in real time. SAP has helped us with gaining effective, real-time POS analysis in all of our first-line stores and realizing real-time business operations. Lu Xueling, Director of Data, Hong Xiang Yi Xin Tang Pharmaceutical (Group) Ltd. 5 / 6

6 Hong Xiang Yi Xin Tang Leading the pharmaceutical retail business into the future As it continues to explore the possibilities for real-time information analysis in pharmaceutical retailing, HXYXT plans to extend its use of SAP software to include the SAP hybris Commerce solution and the SAP Customer Relationship Management application. The company foresees using SAP HANA to fully break down information barriers within the enterprise, provide data to support strategic decision making, enhance operation and management efficiency, and effectively link back-end systems and frontline employees to build a solid foundation for developing full channel operation. There will be many more HXYXT pharmacies in the future to serve more customers. Simultaneously, construction of Internet marketing networks and e-commerce platforms is expected to contribute to rapid development. With SAP HANA and support from SAP AGS, HXYXT expects to be able to provide better health products and services to more people more efficiently, leading the way for the entire pharmaceutical retail industry (15/07) 6 / 6

7 No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an SAP affiliate company. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries. Please see for additional trademark information and notices. Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP SE or its affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP SE s or its affiliated companies strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.

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