HealthyPets Replaces SAP With NetSuite and Optimizes Order Management, Demand Planning

Rosalyn Impink, NetSuite Contributor

July 14, 2022

In 1999, two veterinarians founded HealthyPets, an online and retail pet pharmacy that aimed to make pet medications more affordable and save pet owners a trip to the vet. The company buys directly from manufacturers of pet drugs and products and passes the savings on to consumers.

The model has served the business well. The California-based company has since expanded to three brick-and-mortar operations across Northern California, an online marketplace that serves over 1.5 million customers, and Amazon and Walmart sales channels for its pet products. The company averages 15,000 sales orders per month and manages a diverse inventory, distributing both private-label and vendor SKUs with plans to double pharmacy operations over the next few years.

Yet, the path to success was not an easy one. As a pharmacy business, HealthyPets has sophisticated order management requirements. When a customer places an order online, HealthyPets identifies the prescription items and confirms them with the customer’s veterinarian to make sure the right pets get the correct medication. Once the vet verifies the prescription, the order is released for shipment. 

When the organization was smaller, HealthyPets’ could manage this in its order management system, but in 2013 the software maker was acquired by another vendor which sunsetted the product, forcing the company to move on to an SAP ERP system. The transfer turned into a “nightmare,” according to Jesse Padilla, vice president of sales. The SAP system offered little visibility into customer satisfaction statistics or sales information, and the implementation process was slow and difficult. Problems compounded as the pandemic hit: Sales soared as customers sought to shore up on products and medications amid supply chain woes.

“Every day was like Black Friday,” said Padilla.

With the SAP system, HealthyPets had difficulty getting orders out efficiently. Some 900 customers would phone the HealthyPets call center every day looking for shipment confirmations. The company’s online Google reviews — a critical success metric — plummeted. 

Replacing SAP Improves Order Management and Customer Satisfaction

Seeking to maintain growth and ensure a high-quality customer experience, HealthyPets realized it needed to replace SAP(opens in new tab) and undertook an ERP selection process(opens in new tab). After evaluating Microsoft GP and Microsoft Dynamics, it turned to NetSuite based on its cloud-based system and integration capabilities, implementing the software in March 2020. 

Since implementing NetSuite, HealthyPets customer satisfaction metrics have improved. Orders are fulfilled faster and with fewer errors, and customers get updates before they ask, leading to a 60% reduction in customer service calls. A majority of its 120,000 online reviews are five-stars. When customers do call in, service representatives are able to quickly access customer profiles in NetSuite, reviewing refills on file, pending prescription orders and back orders that can avoid the need to put customers on hold.

“Having everything all in one place is paramount, especially when communicating with our customers,” said Padilla. 

New System Improves Demand Planning and Traceability

HealthyPets recently implemented NetSuite Demand Planning(opens in new tab), and Padilla is excited about the opportunities the materials requirements planning (MRP) functionality(opens in new tab) has opened up for the HealthyPets purchasing team. The system forecasts inventory needs and determines when to reorder, taking into account lead times for HealthyPets’ 10,000 SKUs from 500 vendors. It then generates purchase orders/requisitions and sends them to the purchasing team for execution. Padilla expects this automation to free up significant time for the purchasing team, which they’ll spend working deals with vendors to grow HealthyPets’ product assortment or the business overall.

HealthyPets by the Numbers
1.5 million customers
15,000 sales order per month
10,000 SKUs
500 vendors
120,000 online reviews

Managing hundreds of vendors and thousands of SKUs across its three warehouses is always a challenge, but “visibility really helps,” he said. The company uses pre-designed executive dashboards in NetSuite for insight into warehouse operations, including the number of orders, pending orders, number of tasks and refunds. With this new efficiency, the team spends less time correcting mistakes and instead focuses on expanding HealthyPets’ growing offering of products. 

NetSuite’s MRP functionality is revolutionizing how the company manages its pharmacy and warehouse data as well. One warehouse stocks prescription items and another stocks over-the-counter medications. Before NetSuite, HealthyPets’ pharmacy and non-pharmacy businesses ran on separate ERP instances, requiring team members to manually input orders that contained both prescription and non-prescription items. Now, the company can manage intercompany transfers for order fulfillment on a centralized account, while NetSuite helps the company to ship those items together, saving on costs and time. 

HealthyPets has also improved the traceability of its products, a crucial requirement for any company in the pharmacy business. The company used to rely on manual SKU counts making it nearly impossible to track inventory. Expiration dates weren’t tracked and, as a result, the company lost revenue to expired merchandise each month. Since implementing NetSuite, team members scan expiration dates and lot numbers as inventory enters the pharmacy. They fulfill orders using the first expiring, first out (FEFO) method, minimizing waste. And in the event of a recall, they know exactly which items went to which customers.  

HealthyPets is also using demand planning(opens in new tab) to maximize efficiency and get a better view of inventory. When the company used SAP, the purchasing team had no visibility into which items needed to be replenished. Now, the team is able to create daily inventory demand reports that can be shared with managers and senior executives. The company is using the module to generate trend lines and gauge trends over the next 24 months. “MRP Demand Planning does the work for us,” said Padilla.

Padilla emphasized the role of NetSuite’s Advanced Customer Support (ACS)(opens in new tab) team in the successful implementation.

“It’s an absolute necessity and helped us with a near perfect cutover and integration,” he said.

The HealthyPets team worked directly with ACS to troubleshoot unique problems; the company uses a fax system to confirm prescription orders with veterinarians, and ACS helped create fax templates to integrate with the new system to ensure a proper workflow. Padilla appreciates the knowledge and collaboration the ACS team brings.

With NetSuite’s help, HealthyPets is looking forward to continuing to expand operations and support growth to fulfill its mission of helping pets live their happiest, healthiest lives. 

See the specifications, features and benefits of NetSuite Order Management(opens in new tab).

NetSuite has packaged the experience gained from tens of thousands of worldwide deployments over two decades into a set of leading practices that pave a clear path to success and are proven to deliver rapid business value. With NetSuite, you go live in a predictable timeframe — smart, stepped implementations begin with sales and span the entire customer lifecycle, so there's continuity from sales to services to support.