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Vanguard Growth Spurs Change
To cope with growth, the pharmaceutical company automates with new technology.
By Adam Hughes
Staff Writer
It seems like nothing, not even the threat of Hurricane Frances, can stop the growth of Vanguard Advanced Pharmacy Systems.
While most people spent the Labor Day weekend inside their homes trying to avoid high winds and stinging rain, Vanguard's founder and CEO Nick Generalovich, along with many of his employees, spent the days at the company's headquarters, on East Manatee Avenue in downtown Bradenton, installing a new data entry system.
There was no choice, Generalovich says. Fast, continued growth made the upgrade a necessity.
Between 1999 and 2003, Vanguard has had average annual growth of 54%. This year, the company has 78 employees and $14.3 million revenue, compared to 14 employees and $2 million revenue in 1999.
"We still enjoy the same position in the industry, which is relatively unique," Generalovich says.
Vanguard's specialty - filling prescriptions for assisted-living facilities (ALF) - was a relatively untapped market in 1991 when the company started. ALFs require many prescriptions for many people on different days of the week, and those records need to be strictly kept with no room for error. This was a time-consuming process done by the ALFs at the time.
When Generalovich purchased Bradenton's K'n'K Pharmacy in 1991, he acquired three ALF accounts. Generalovich saw the potential. Large pharmacies didn't want the responsibility of packaging, keeping the records and shipping the drugs. Generalovich talked with the ALFs to set up a business model that would benefit both the centers and Vanguard.
For now, the company has contracts with about 8% of the state's ALFs, he says, adding: "It's very realistic and it's very reasonable for us to get 35% to 40%. Without any real, extensive, outside investment, we'd probably get there in four to five years."
But Vanguard has had a lot of extensive, outside investment opportunities. Generalovich is in continual talks with investors all over the United States, including in Chicago. Some are interested in helping expand Vanguard in Florida, while others want Vanguard to push into other states.
"We're looking to grow faster, and we're looking for opportunities," Generalovich says. "There's been an awful lot of opportunities, but we haven't found the right match yet. I do think the industry, and with our position in the industry, it really warrants a hard look at how we can grow faster, and our info structure is already well-established."
It took about two years to get that structure in place. Even though it had the chance to grow at an even faster rate Vanguard didn't have the required infrastructure. Generalovich made sure the growth didn't run away from the company. One such scenario came in 2002.
Before moving into their current headquarters, a competing ALF pharmacy went out of business and left 105 clients open in Florida. Vanguard was used to taking on two or three new clients monthly. Generalovich took a gamble: The company took on 18 of those clients over several weeks without adding extra workers. His employees worked around the clock to keep up with the business.
Fortunately, for Generalovich anyway, Bausch & Lomb closed its Sarasota plant, and Vanguard was able to hire five employees with more than 15 years experience to ease the burden.
Since then, Generalovich has hired two new middle managers to give him more time to explore expansion opportunities.
It took five years, but Vanguard's executives created the largest drug education program in Florida. Now that Generalovich has installed the new data entry system, he's considering the installation of a $375,000 machine to take the manual labor out of bottling the drugs. He's talking to the machine's manufacturer to finalize a sales contract. He expects to have the machine installed during the first half of next year.
The challenge, he says, is to hold true to the company's vision amidst the growth.
"We absolutely cannot lose sight of our philosophy about our costumer-service level and our personal attention to our customers," Generalovich says. "If we do accelerate our growth, we've got to be able to accelerate without our customers noticing it."
Which is why even during hurricanes, Generalovich is still hard at work behind boarded windows, improving Vanguard.
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