FoxMeyer’s Delta Information System The Failure of a Strategic Information System In the year1994, FoxMeyer was the fourth largest drug wholesaler in the United States with an annual sales of approximately $5.1 billion. The company filled orders from thousands of pharmaceutical companies with shipments of up to 500,000 items per day. However, in the same year, due to rapid growth and consolidation of the pharmaceutical industry, FoxMeyer’s management was concerned about competition from the larger competitors. The threat imposed required drastic measures. The whole industry competed on low profit margins. Therefore, FoxMeyer decided to stay ahead of the competition by implementing a new information system. Previously, the Information Technology department consisted of the Unisys mainframe, which was able to track inventory accounts. In addition, the company’s warehouse had out-dated packaging and shipping technology. FoxMeyer believed that by improving information technology, warehousing and customer service, that the competitors could be outpaced by a wide margin. FoxMeyer decided to automate their inventory and delivery process in an attempt to provide better service at a lower price than their competition. The bulk of the project was changing the warehouse from manual to automated. They implemented bar code readers and bar coded all their products for faster tracking capabilities. Further efficiency was added with the installation of automated conveyor belts. The belts lifted the products and delivered them to docks were they were placed in the appropriate trucks for shipment. Also, the new information system tremendously supported FoxMeyer by making the business process of tracking sales and inventory easier and faster. First, it automated the order taking process by allowing hospitals to enter their orders directly into FoxMeyer's inventory computer system. Secondly, the system allowed robots to...
