AS/400's Just the Right Prescription for AmeriSource Health Corp.

When you refill your latest prescription at your local drugstore chain, it’s likely that your pharmacist is logging into an AS/400 system to keep the medicine in stock. That’s because many drugstores and a majority of health systems get their supplies from AmeriSource Health Corp., a leading pharmaceuticals distributor with close to $11 billion in annual revenues. And behind all of AmeriSource’s IT and e-business initiatives is the AS/400.

Currently, AmeriSource maintains two AS/400s at its Valley Forge, Pa. headquarters, which support 1,200 internal users, 8,000 direct customers, and more than 15,000 customer sites. A model 740 12-way processor with 40 GB of memory handles all electronic orders being fed from the company's 21 national distribution centers and coordinates product shipments. The second machine, a model 730, is the company's main Web server, hosting both consumer and business-to-business catalogs. The company maintains two identical machines at a hot site in New Jersey, with data and applications mirrored using Lakeview Technology’s Mimix.

Applications supporting its operations include Distrack Integrated Distribution System from Turning Point Systems Inc. for financials, distribution and warehousing, and E3 for purchasing.

"The AS/400 has grown with us," says Carl Dunbar, vice president of technical services for AmeriSource. "It's been a good machine for us. The AS/400 platform is always right ahead of us, as we grow and expand, there's always a next level we can go to." In addition, the company's AS/400 have never gone down, Dunbar adds. "The only downtime we've ever had is planned downtime."

Such high availability is critical for AmeriSource’s new e-business ventures. The company just launched iECHO, a new B2B customer portal that is part of its Web offerings. The company also runs a Virtual Internet Pharmacy, which allows pharmacy retailers to transform themselves into online pharmaceutical superstores, using AmeriSource's distribution and inventory capabilities. All components of this network are, of course, run on AS/400s.

The AS/400 has been instrumental in AmeriSource's server consolidation efforts as well. "We had seven data centers at one point," says Dunbar. "We consolidated and centralized our data center so we could have one database. It really helps our suppliers and everyone else that does business with us. Rather than having seven reports showing shipping information and things like that, we now have one."

The centralization initiative was facilitated through deployment of a frame-relay network employing Cisco routers for TCP/IP and Perle controllers for SNA traffic. The scalability of the AS/400 platform made this transition a smooth one, says Jeff Roberson, vice president of Internet services for AmeriSource. "We wanted to move to a TCP/IP-based network over our LANs and WANs, and we didn't really want to run any other protocols over it. The AS/400 facilitated all that."

In fact, the whole process has been almost seamless, says Roberson. "When we yank AS/400s out of these divisions, the users usually can't tell that the 400 is no longer in the building. We have sub-second response time everywhere, even at our California division."

With iECHO, AmeriSource's latest e-business initiative, the company has already enrolled more than 1,000 customers, and eventually expects to enroll another 7,500 from its current customer base. The new site supports Java and XML technology, and delivers online ordering, as well as pricing, inventory levels, and other information.

AS/400s power AmeriSource's just-in-time inventory and distribution network servicing health care systems and drugstores. "All of our customers rely on just-in-time inventory," says Dunbar. "What they order today, we deliver tomorrow. We rely very heavily on the AS/400 for all of our processing needs."

In October, the company plans to roll out a data warehouse and business intelligence system, built on SHOWCASE Strategy. "We're starting out in the sales area, and eventually expanding into financial, purchasing and warehouse management by next spring," says Roberson.

"Because of our need for just-in-time delivery, as well as streamlining distribution, technology is playing a vital role for us in increasing productivity and providing added services to our customers and our suppliers," says Dunbar. "The AS/400 is providing a very versatile, flexible and fantastic engine for driving these initiatives."

AmeriSource plans to eventually upgrade all of its systems to the AS/400 830 and 840 models, Dunbar says. "We'll be adding an additional terabyte of DASD to each of our 840s, giving us about 3 TBs of DASD on each system."

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