Field Intelligence Expands Pharmacy Inventory Service to 11 African Cities

The Challenges Facing African Pharmacies

Pharmacies across Africa frequently encounter difficulties securing financing. However, a more pressing issue is often effective inventory management. Determining optimal stock levels presents a significant hurdle for pharmaceutical retailers.

Currently, a lack of sufficient data hinders accurate assessments of demand. This leads to capital being immobilized, and either surpluses or shortages of necessary medications. Excess stock carries the risk of products expiring, while insufficient stock prevents patients from receiving vital treatments.

Field Intelligence's Innovative Approach

Field Intelligence is addressing these challenges by digitizing the pharmaceutical supply chain, aiming to improve sales for African pharmacies. Founded in 2015, the company initially focused on public health supply chain issues in Abuja, Nigeria.

According to co-founder and CEO Michael Moreland, independent pharmacies in Abuja shared similar struggles with their government-funded counterparts. Having developed a SaaS platform for managing large-scale pharmaceutical distribution for the government, the company subsequently decided to extend its services to the private sector.

In its pursuit of a solution to the supply chain problem, Field Intelligence evolved from a purely software-based company to a pharmaceutical distributor, leveraging technology to redefine the entire value chain.

Shelf Life: A Standalone Product

In 2017, Field Intelligence launched Shelf Life as a dedicated product to facilitate this transformation. Initially operating in Abuja, Lagos, and Nairobi, the product is designed to resolve the inventory challenges within Africa’s $65 billion pharmaceutical market.

The company recently announced its expansion into 11 additional cities across Nigeria and Kenya. This includes Delta, Edo, Enugu, Kaduna, Kano, Kwara, and Rivers in Nigeria, and Eldoret, Kisumu, Mombasa, and Naivasha in Kenya. This expansion builds upon Field Intelligence’s existing network of over 700 pharmacies, which have collectively served more than 1.4 million patients.

Shelf Life alleviates the burden and risk of inventory management for pharmacies. It provides forecasting, quality assurance, fulfillment, and inventory control through a subscription-based service.

Pharmacies sell goods supplied by Shelf Life on a consignment basis, utilizing a pay-as-you-sell model. This eliminates the risk of products expiring and offers a more affordable alternative to traditional working capital financing. The company reports that this model has enabled pharmacies to achieve an average Compound Annual Growth Rate (CAGR) of 25%.

Growth and Future Outlook

“We introduced Shelf Life in 2017 to empower pharmacies to outsource their supply chain operations to us,” Moreland explained. “It has experienced substantial organic growth since then.”

“As we scaled, we expanded to Lagos and ultimately to Nairobi to assess its viability in the East African context, and it proved successful. We have not wavered from this path since. The future of our business lies within the private pharmacy market.”

Recent Funding and Expansion

Field Intelligence secured its first external funding round in March of last year, raising $3.6 million in a Series A investment. These funds were allocated for expansion, but the onset of the pandemic initially delayed those plans.

The company resumed its efforts in late Q4 2020, laying the groundwork for the current expansion, which represents a significant step forward in its mission to improve pharmaceutical access across Africa.

The Central Role of Data in Field Intelligence’s Operations

Significant growth in both sales and Shelf Life membership subscriptions over the past year has fueled this expansion. Specifically, a 47% increase in sales was recorded in Nigeria, alongside a 65% rise in Kenya, resulting in the distribution of over 586,950 products across 63 distinct categories.

Field Intelligence effectively addressed the demand for both prescription and over-the-counter medications by leveraging data to refine its forecasting and pinpoint market anomalies. But what methods are employed to obtain and aggregate this crucial data?

The CEO articulated this challenge as a mathematical one, emphasizing the necessity of possessing comprehensive data regarding sales trends across numerous locations and varying seasons, encompassing a broad range of products.

Upon integrating Shelf Life into a pharmacy’s operations, Field Intelligence assumes control of its supply chain and inventory management procedures. The company collaborates with fulfillment partners to oversee stock levels, inventory control, and product merchandising.

Information concerning stock positions and movements originates from a diverse network of retail locations. This allows the company to construct a unique dataset, offering pharmacies real-time insights into demand patterns. Consequently, Field Intelligence delivers enhanced visibility and control over pharmaceutical procurement and inventory management.

This system minimizes both overstocking and stockouts, empowering pharmacies to adjust product offerings or pricing strategies based on readily available information.

Moreland explained that the fulfillment partners’ asset-light approach enabled the company to “establish a scalable and intelligent distribution network that is both efficient and delivers substantial value to patients and retailers.”

He further stated, “Our position within the value chain, as a tech-driven distributor, is unique; no other entity operates at this level of the supply chain across so many cities.”

Currently, Shelf Life is utilized in over 700 pharmacies throughout Nigeria and Kenya. The company notes that Nigeria boasts more than 4,500 registered pharmacies and over 15,000 drugstores, while Kenya has 6,000 registered pharmacies. This indicates considerable potential for market penetration.

Field Intelligence anticipates exceeding 2,000 Shelf Life pharmacies and drugstores by the following year, with a target of 12,000 pharmacies and drugstores by 2025.

Moreland reported a fivefold increase in recurring revenue, noting that Shelf Life has facilitated the sale of more medications and served a greater number of patients in the last quarter than during its initial three years of operation.

Beyond inventory management, Moreland believes Field Intelligence is also addressing a financial challenge by providing an alternative to conventional financing options, thereby reducing the operational costs for pharmacies.

“A key benefit we offer is that, through consignment sales, we liberate significant working capital for retailers. As a result, we are widely perceived as a financial services provider and a form of alternative finance for our pharmacy partners. This is a crucial aspect of our narrative, as joining Shelf Life is 60 to 80% more cost-effective than securing equivalent working capital from microfinance institutions or traditional banks, even those offering concessional loans, while also providing added-value services,” he explained.