Case study: xTrack WMS in pharmaceutical distribution

Pharmaceutical distribution operates under strict rules that vary from one product category to another. Serialized medicines require serial number verification, products subject to special controls have their own storage and handling requirements, and traceability must be maintained throughout the entire flow, from goods receipt to delivery. In the warehouse, these rules apply at every step: receiving, storage, order picking, and dispatch.

Axes Software implemented xTrack WMS at a pharmaceutical distributor, with compliance rules integrated into the warehouse workflow. The project covers the flow from pre-receiving through to truck loading. Branch-level splitting takes place during receiving, picking can be performed in parallel for multiple orders, and exceptions are automatically routed to quarantine.

The client operates a central warehouse and a nationwide branch network. Its portfolio includes medicines, including psychotropic and narcotic substances, medical devices, parapharmaceutical products, cosmetics, and food supplements. Operations involve the verification of unique identifiers through Romania’s National Medicines Verification System (NMVS), specific procedures for narcotic and psychotropic substances, separate handling of imports from outside the European Union, and separate procedures for recalled and returned products. Stock is organized into separate inventory categories for saleable and non-saleable goods, with dedicated areas for retention samples, quarantine, recalled products, and damaged goods.

Context and Challenges

A pharmaceutical distribution warehouse operates under two competing pressures: speed – orders must be prepared and delivered quickly to hundreds of locations and pharmacies – and regulatory compliance, which cannot be sacrificed in the name of speed.

In day-to-day operations, these requirements translate into several specific operational challenges:

Medicine authenticity verification – Serialized products received from suppliers that are not approved or designated as authorized distributors must be verified individually by scanning each serial number (SN) and querying Romania’s National Medicines Verification System (NMVS). Storage is blocked until a valid response is received.

Efficient distribution to the branch network – A significant share of received goods must be allocated to several branches, each with different priorities, right at the receiving stage, without subsequently having to handle the pallets physically again.

Handling products subject to special controls – Narcotic and psychotropic substances must be stored exclusively by pharmacists. An automatic alert must be triggered whenever an order containing these products is activated, and dedicated transport documents are required.

Handling exceptions without blocking the normal workflow – Imports from outside the EU, recalled goods, customer returns, and batch or quantity discrepancies identified at receiving must each be automatically routed to a dedicated quarantine workflow, without stopping the rest of the receiving operation.

Paper-based procedures and subsequent manual checks cannot cover all these requirements at the same time. The solution must guide the operator, step by step, through every decision, from the moment the truck arrives at the loading bay to the scanning of the last pallet loaded for delivery.

Project Objectives

• Serial number (SN) verification through Romania’s National Medicines Verification System (NMVS), within the framework of the Falsified Medicines Directive (FMD).
• Splitting goods by branch during receiving, saving time and reducing the number of times items are handled – goods are palletized only once, directly for their final destination.
• Parallel picking for multiple orders, with several simultaneous orders assigned to the same trolley, depending on its capacity and the volume of goods.
• Applying specific verification rules to narcotic and psychotropic medicines, including double scanning of seal codes and automatic alerts to pharmacists.
• Separate handling of imports from outside the European Union, received directly into quarantine until the batches are released.
• Routing all receiving exceptions to quarantine, including damaged goods, batch or quantity discrepancies, missing quality documents, recalled products, and customer returns.
• Guiding the operator step by step through automated processes, from receiving to delivery, with tasks automatically generated on the mobile terminal for each stage.
• Treating unloading and pre-receiving as a standalone stage, essential to the quality and speed of the remaining workflow.

The Solution: xTrack WMS by Axes Software

The xTrack platform was configured to track the physical flow of goods in the warehouse, with bidirectional integration with the ERP system at every key point: the unloading order, receiving, goods receipt note (GRN) generation, FMD verification, outbound order, verification, and transportation.

The following sections follow the logical order of warehouse operations as defined for the project: pre-receiving, receiving, splitting, preparation of goods for stock transfers, NMVS/FMD verification, putaway (PA), quarantine for receipts with discrepancies, outbound orders, zone-based picking, verification, transport preparation, and loading, for both distribution and stock transfers.

1. Pre-Receiving – Unloading, the first critical step in the workflow

The receiving process begins before the goods reach the shelves. When the truck arrives, the warehouse operator opens an unloading order in xTrack, records the driver and vehicle details, and confirms, by ticking a checkbox, whether the temperature requirements were met during transport. At this stage, the operator also selects, using dedicated checkboxes, the types of goods present in the truck: goods requiring storage at 2–8°C (refrigerated), goods requiring storage at 15–25°C (ambient temperature), and narcotic substances. Based on these selections, the application automatically prints the labels corresponding to each type of goods when the order is activated.

Documenting the condition of the goods upon arrival is mandatory and guided by the system. A photograph of the temperature log must be attached before any other operation can proceed. If a pallet is found to be damaged during unloading, the system generates a dedicated task requiring four photographs to be taken and the pallet label to be reprinted with the explicit marking “DAMAGED.” For undamaged pallets, entry into stock takes place automatically when the label is printed, without an additional scan. This eliminates a manual step and saves time from the very first stage of the workflow.

Pre-received pallets are deducted from stock only when the receiving process is actually closed. Pre-receiving is therefore a distinct stage that precedes the actual receiving process: the goods are already physically inside the warehouse and their condition has been documented, but they have not yet entered the sales flow. This separation allows unloading to proceed quickly without blocking the subsequent receiving process.

2. Receiving – Scanning, batch confirmation, and splitting preparation

The actual receiving process is activated on the mobile terminal, and the sequence of tasks guides the operator throughout the entire process: selecting the order, scanning the source pallet and the item, confirming the batch or declaring a new batch and entering the corresponding details, if applicable. At the end, the system automatically assigns the destination pallet according to the splitting algorithm rules described below.

For items requiring FMD verification, the system automatically directs the goods to pallets separate from those containing the other products.

An important structural rule of the workflow is that the branch allocation file (the split file) must be imported before the receiving order is activated and cannot be added later, during receiving. This requirement ensures that the splitting algorithm is applied from the scanning of the first pallet, without having to reprocess goods that have already been put away.

3. Splitting – One touch, goods directly to their final destination

The splitting algorithm is the central component of the system: it saves time and reduces the number of times items are handled. Instead of receiving goods into a generic location in the central warehouse and then handling them again for each branch, the system allocates each unit directly to the pallet assigned to its destination branch, from the moment it is scanned during receiving. Allocation follows the priority order configured for each inventory or branch.

If several branches require the same item, the received quantity is allocated strictly according to priority. For example, if three inventory locations collectively request more than the available quantity, the highest-priority location is fulfilled in full before the next one, while any remaining unfulfilled quantities wait for the next receiving task.

Pallets assigned to each branch can be built gradually over several successive receiving operations. The warehouse operator decides when to close a pallet by selecting a dedicated action on the terminal. Once closed, the pallet can no longer receive goods and moves directly into the wrapping and putaway workflow.

When the pallet is closed, the system can print a dispatch note containing its number, which is sent to the ERP system for recording on the delivery note. For items requiring FMD verification at the destination branch, a separate dispatch note is generated at order level and printed when the goods are delivered to the branch.

Only after splitting for all branches has been completed is the remaining quantity allocated to locations in the central warehouse, according to space optimization criteria: filling existing picking locations first, then selecting a new location based on storage characteristics, turnover class, and proximity to similar items. Products with the storage characteristic “Psychotropic and Narcotic Substances” follow the same workflow, with one additional restriction: they may be stored exclusively by pharmacists.

4. Preparing goods for transfers to branches

Goods allocated to branches through splitting are not treated as a simple stock issue, but as a transfer order managed entirely by the WMS. Once loading is complete, the system automatically creates transfer orders, one for each destination inventory, and sends a message to the ERP system to generate the transfer. The message also includes the pallet number, which is recorded on the dispatch note in the ERP system, allowing the orders to be completed automatically and the dispatch notes to be generated without additional manual intervention.

For actual goods transfers between warehouses, which are separate from the splitting workflow during receiving, the transport order is created manually in the WMS, using a descriptive name for quick identification on the terminal. The order is activated without any goods assigned to it and is subsequently loaded exclusively by scanning the pallets. A strict rule applies: only pallets with the same destination, meaning the same warehouse, can be loaded onto the same order.

5. SN Verification – Compliance with the NMVS (FMD)

For serialized products received from suppliers that are not approved or designated as authorized distributors, xTrack WMS requires each serial number (SN) to be individually verified against the national NMVS database through the FMD BO (OSMR) module. Products requiring verification are automatically routed to dedicated pallets during the splitting stage, with separate scanning areas for products stored at ambient temperature, refrigerated products, and products in the psychotropic and narcotic substances category. The system automatically recommends the appropriate scanning location based on the item’s storage characteristics.

The verification process is straightforward for the operator but rigorous: the pallet brought to the verification station is scanned first, followed by each product’s SN code. The scanned codes are displayed in a table and, when the operator clicks “Save,” they are submitted as a query to the national NMVS database.

Responses are displayed in color, with no ambiguity: green for Active / FMD Code OK and red for Inactive / False FMD Code. Only the quantity for which an OK response is received can be moved to the storage area. The quantity for which a “False Code” response is received is automatically routed to quarantine through scanning, and the movement is also transmitted to the ERP system. If the scanner fails to read a code correctly, the system allows the code to be rescanned without incorrectly classifying the product as falsified.

The business rule is strict: products requiring FMD verification cannot be stored in their final warehouse locations until an Active / Code OK response has been received for each unit. The same rule applies to outbound operations during the FMD decommissioning process. When delivery orders are verified, the application requires every SN that needs to be decommissioned to be scanned, sends the information to the NMVS through the OSMR module, and does not allow the outbound order to be closed until confirmation that the codes have been decommissioned is received. Any scanning errors are handled automatically by recalculating the number of unique codes for which a valid response has been received.

6. Put-away (PA) – Guided storage in the optimal location

After goods have been split by branch and, where applicable, FMD verification has been completed, the goods remaining for the central warehouse enter the put-away (PA) workflow. The PA order is generated automatically, immediately after the goods receipt note (GRN) is issued for the received pallet. The operator is guided task by task through retrieving the pallet from the loading bay and moving the items to the destination locations calculated by the system.

Allocation prioritizes the replenishment of picking locations where stock already exists. Only then is a new location selected, based on the item’s storage characteristics, turnover class, and proximity to similar items, in order to reduce travel distances during subsequent picking operations.

For each PA task, the terminal displays the information required to carry out the operation: the source location, the PA order, the number of boxes or individual units to be moved, and the batch. The operator also has options for special situations: moving all items with serial numbers (SNs) using a single button, reporting a full location to receive an alternative location recommended by the system, or moving goods through a buffer location when operational capacity requires it.

7. Quarantine – Handling receipts with exceptions

Not all received goods follow the standard workflow. The system automatically identifies exceptions and routes them to the Quarantine inventory, without blocking the rest of the receiving process.

The situations explicitly handled include damaged quantities identified during receiving, declaration of a batch different from the one specified in the order (the surplus is automatically routed to quarantine, while the shortage is handled separately when receiving is closed), quantities exceeding the ordered amount, and batch mix-ups. Each of these cases automatically generates a PA task to the quarantine pallet corresponding to the item’s storage characteristics.

For certain items requiring special checks, such as products that must be tested in a laboratory, a dedicated retention-sample workflow is available. The goods are received without splitting and moved entirely into quarantine. From there, the quantities required for testing and for retaining the samples required by regulations are taken. The movements are documented through separate transfer orders to the branch inventory, once the laboratory results have been received.

There are three categories of special receipts, each with a dedicated quarantine workflow:

• Import receipts (suppliers from outside the EU) – The goods are received directly into the Quarantine inventory, where they remain pending batch release. Once released, they are transferred to the saleable inventory through a dedicated transfer order.
• Receipt of recalled products (recall) – Validating a return-to-supplier delivery note automatically generates return requests from all customers to whom the respective batch was sold. These are automatically imported into the WMS as inbound documents. Receiving is handled like a regular customer return, without FMD verification, and the goods are placed in the Recalled Products inventory. The system provides a dedicated reporting window to track each return delivery note associated with a recall.
• Receipt of customer returns – The goods are received directly into quarantine, and the inbound order cannot be closed until all items have undergone FMD verification. Once the return has been approved, the products are moved to the FMD scanning area, where applicable, and then to storage. The ERP system automatically generates the goods receipt note (GRN), the credit invoice, and the customer invoice adjustment note.

This approach, in which quarantine is the default destination for every exception and the release of goods follows an explicit, auditable workflow for each case, allows the standard receiving process to maintain a fast pace without compromising traceability or compliance.

8. Outbound orders – From import to automatic activation

Outbound orders mainly originate from picking documents (WDDs) imported from the ERP system. When a customer order generates several WDDs for different picking zones (ambient temperature, refrigerated, and psychotropic products), xTrack WMS automatically consolidates them into a single outbound order for each zone, avoiding the need to generate separate picking waves for the same order.

Each order is assigned a dynamic priority, recalculated based on the estimated departure time of the delivery route, with special treatment for orders that have already passed their planned delivery deadline.

Orders are activated automatically only if sufficient stock is available to fulfill the entire order. Orders for which available stock does not cover the full requested quantities are visually flagged in red and can be activated manually by force, in which case tasks are generated only for the available quantities.

Whenever an order containing products with the storage characteristics “Psychotropic” or “Narcotic Substances” is activated, the system automatically sends an email alert to a dedicated pharmacist email address. The message includes the order reference in the subject line and an attached report listing the item, batch, expiry date, and quantity. This ensures that the alert required for compliance is generated automatically, without relying on manual intervention by the operator.

9. Zone-Based picking – Picking goods in parallel for multiple orders

Picking is organized into separate zones, each with its own workflow requirements. The ambient-temperature zone (25°C) uses trolleys that can handle several orders simultaneously, while in the refrigerated and special zones (psychotropic and narcotic substances), picking is carried out one order at a time for traceability and security reasons.

One of the project’s main objectives is achieved through the automatic allocation of one or more orders to the same trolley, depending on the available carrying capacity and the volume of each order. This allows the operator to travel through the warehouse once to pick items for several orders simultaneously, with each order assigned to its own destination box on the trolley, instead of repeating the route separately for each order.

Task generation follows an efficiency hierarchy: picking a full pallet is always preferred, followed by a full box, and piece picking is used only when necessary. The priority of orders assigned to the trolley follows exactly the dynamic priority established at activation.

For items in the narcotic substances category, the workflow requires the seal code to be scanned twice when picking is completed. This step provides an additional control measure specific to these products, which does not apply to the standard picking workflow.

10. Verification – Quantity control before delivery

Not all orders go through the verification stage. Orders from the refrigerated and psychotropic/narcotic zones, as well as transfer and export orders, follow their own workflows and bypass standard verification. This avoids introducing additional steps where control is already ensured by other means, such as double scanning or a dedicated workflow.

For all other orders, verification can be performed either in the back office, with full visibility of the order, source and destination pallets, and remaining quantities, or directly on the terminal. In the latter case, the operator follows a sequence of tasks involving scanning the source, the item, and the quantity, with options for quick or detailed verification.

Any discrepancy identified during verification is handled through a dedicated workflow. Surpluses are confirmed at box or pallet level and processed through an adjustment procedure (ADJ BIN), which automatically generates stock-controller tasks for the source locations involved. Shortages automatically trigger additional picking tasks for the missing quantities, assigned directly to the operator who performed the verification. The operator cannot proceed until these tasks have been completed.

The outbound order cannot be closed if any surpluses remain. For orders containing narcotic or psychotropic substances, the FMD decommissioning process described above must be completed successfully before the order can be closed.

11–13. Transport preparation and loading – distribution and transfers

Once verification or picking is completed, for orders that do not go through the verification stage, parcels receive a delivery label containing the customer, route, parcel number at order level, and type of goods. During the consolidation process, these parcels are moved to the sorting locations assigned to the delivery route.

The transport order is generated automatically, either when the first outbound order on the route is completed or by importing the route sheet from the ERP system, with which it is subsequently synchronized. For narcotic substances, there is also the option to print a dedicated transport order at order level, based on a specific template.

Actual loading is confirmed exclusively by scanning. The transport order is activated only after the truck has physically arrived at the loading bay, at which point the system generates loading tasks for all the corresponding pallets. The operator scans each eligible pallet. If an order cannot fit entirely into the truck, the pallets can be unloaded from the transport order, but partial loading of an outbound order onto the same transport order is not permitted.

The transport order can only be closed from the back office, and the system automatically checks whether all assigned parcels have actually been loaded.

At the final stage, the workflow branches according to the type of loading. For customer distribution, closing the transport order sends an update to the route sheet in the ERP system, including the actual list of loaded orders required to generate the delivery documents.

For transfers to branches, the system automatically creates transfer orders in the WMS, one for each destination inventory, and sends a message to the ERP system to generate the transfer. This message also includes the pallet number for recording on the dispatch note. As a result, the orders in the ERP system are completed automatically, and the dispatch notes are generated without the need for subsequent manual reconciliation.

Benefits for the Client

🔹SNVM/FMD compliance integrated into the workflow – Serialized goods cannot reach the shelves without a valid response from the national database, and decommissioning at dispatch is a mandatory condition for closing the order.

🔹Fewer handling steps, less time lost – Splitting goods directly during receiving eliminates a subsequent pallet-handling stage, while parallel picking allows multiple orders to be prepared along the same route, within the available capacity.

🔹Strict control of products subject to special controls – Narcotic and psychotropic substances are managed through storage restrictions, double scanning, and automatic alerts to pharmacists, without slowing down the rest of the standard workflow.

🔹Exception handling without blocking standard receiving – Imports, returns, recalled products, and discrepancies identified during receiving are routed to dedicated, auditable quarantine workflows, without stopping the rest of the operation.

🔹Operators guided through defined workflows – Each stage, from unloading to loading, is structured as a sequence of clear tasks on the mobile terminal, reducing reliance on individual experience and the risk of errors.

🔹Complete traceability, from pallet to delivery – Pallet closure dispatch notes, transfer messages, and non-conformity reports document operations and enable full traceability of each batch, which is essential in a regulated environment.

Conclusion

In pharmaceutical distribution, the organization of every operation matters both for the pace of work and for compliance with legal requirements. xTrack WMS brings these two dimensions together in a workflow where each stage is clearly defined and can be tracked.

Every warehouse has its own requirements. Contact the Axes Software team to discuss how xTrack WMS can adapt to your logistics workflows.