PME

I
J

http://polipapers.upv.es/index.php/IJPME

International Journal of 
Production Management 
and Engineering

https://doi.org/10.4995/ijpme.2020.11619 

Received: 2019-04-06 Accepted: 2019-11-23

Use of the ABC Curve in Medicine Line Balancing: A Case Study at a 
Brazilian Pharmaceutical Distribution Center

Oliveira, N.P.  a1*, Prado, D.G.O.  b1, Jesus, R.H.G.b2
a Université de Bordeaux, France. 

b Technological Federal University of Paraná, Brazil. 
a1 nathanpeixot@yahoo.com.br, b1 danigoprado@hotmail.com b2 romulohenriquegomes@hotmail.com

Abstract: Within the logistics, especially in distribution centers, there is still use of manual activities, with great possibility of 
gaining productivity. This work aims to improve efficiency in the supply and separation stages by balancing drug lines using 
the ABC classification. For this, a case study was carried out in a large Brazilian retail pharmaceutical network, in which 
products of higher output were relocated in more strategic areas. Ergonomic gains, reduction of required manpower, greater 
assertiveness, and savings of two hours of work (25%) were the main results achieved. The study also made it possible to 
disseminate an accessible, automated and effective tool for line balancing on large scale inventories.

Key words: ABC Curve, Line Balancing, Logistics. 

1. Introduction
Even today, in the national logistics of large 
companies, the use of manpower is used to carry out 
innumerable activities. Because of this, it has the 
opportunity to influence the productivity, bringing 
numerous improvements. Special attention is given 
to the supply and separation process in a distribution 
center where, due to the lack of organization and 
because there are products with a high demand 
variation –as the example of flu remedies or 
sunscreens that are sold seasonally– they end up 
loosing considerable efficiency.

This work intends to carry out a classification of 
the products according to their outputs, in order to 
better organize them in the supply and separation 
lines at a distribution center of an eminent Brazilian 
pharmaceutical retailer network. For this, the 
methodology of the case study will be used, where 
the curves (A, B or C, according to the ABC curve 
concept) and locations of each product will be 

defined initially, and in a second moment, they will 
be rearranged. The obtained results were not only 
the gain of efficiency, but the improvement in work 
ergonomics, since more accessed products were 
positioned strategically for the operators’ use.

The contribution of this study is due to the use of 
a simple, accessible and effective tool for line 
balancing in large scale warehouses with the premise 
of Pareto analysis or ABC curve. In addition, the work 
proved to be valuable when applied successfully in a 
highly complex sector such as medicines, with high 
diversification and quantity of existing products.

2. Theoretical foundation
In this section will be addressed the key business of 
the article, the logistics area. Where it will be limited 
and deepened to the distribution center field of study. 
Finally, will be seen the the Pareto analysis, the 
instrument used in the case study. 

To cite this article: Oliveira, N.P., Prado, D.G.O., Jesus, R.H.G. (2020). Use of the ABC Curve in Medicine Line Balancing: A Case Study 
at a Brazilian Pharmaceutical Distribution Center. International Journal of Production Management and Engineering, 8(1), 13-19. 
https://doi.org/10.4995/ijpme.2020.11619 

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2.1. Business logistics

According to the author Ballou (2013), logistics can 
be defined as the process of transit and storage of 
materials, so as to allow them to be drained from a 
starting point to their final destination. In addition, 
information flows that ensure satisfactory levels of 
service at relevant costs are included.

Regarding its objective, the author defines as the 
need to deliver objects or services in the physical, 
temporal and geographical condition desired by the 
client. The big challenge, however, is to balance its 
supply and demand in order to avoid logistical costs. 
These tend to vary around 19% to 22% of net sales, 
however, it can undergo strong variations in the 
market (Ballou, 2013).

These costs can be divided into operational and 
administrative costs, in which the first is directly 
linked to distribution and the second is not (Lancioni, 
1991). Viana (2008) cites as improvement of the 
logistic efficiency the reduction of the paths traveled 
by the goods and a better use of its volumetric 
capacity.

2.2. Distribution center
To a large extent, the distribution center is divided 
into input, stock, and output processes. And for this, it 
needs to be managed administratively - bureaucratic 
and control steps - and operationally - physical stages 
(Moura, 1997). In Figure 1 the following summary is 
presented. 

1-Receipt

2-Unpacking and 
Inspection / 
Unitization

3-Send to stock

4-Stock

5-Orders Separation

6,7-Checkout and 
Packing

8-Expedition

Receipt Control

Stock Control

Expedition Control

Suppliers

Company

Users

Input

Stock

Output

Physical Activities Bureaucratic Procedures

Flow of Materials

Documentation Relationship

Organizational Division

Figure 1. Distribution center (source: adapted from Moura 
(1997)).

After being previously identified, it can be described 
its three types of processes as follows:

a)  Input processes: Viana (2008) describes how 
the step of receiving goods and other correlated 
activities such as unpacking, checking, returning 
or authorizing the storage of products, as can be 
seen in Figure 2. It connects directly with the 
purchase and payment stages of suppliers; 

 

Figure 2. Input processes (source: author).

b)  Stock processes: Viana (2008) calls storage or 
stock, the process of maintaining materials, 
adapting to their physical constitution and 
conditioning them to a stock management until 
its use is necessary. Ballou (2013) points out that 
raw material, semi-finished, finished materials, 
spares and administrative materials participate 
in this stage. Figure 3 shows the main stock 
processes. 

Among their main functions, Gu et al. (2007) 
highlight the equilibrium in the transit of materials 
in the supply chain, reducing the risks of variability 
caused by demand (seasonality) and production. In 
addition, it enables the combination of products, 
making orders more flexible and reducing 
transportation costs. Ballou (2013) estimates that 
warehousing costs in the industry revolve in the 
range of 12 to 40% of logistics costs.

As a way to enhance efficiency in inventory 
management, the products are unitized on pallets or 
containers and stored at fixed or random addresses. 
In the first case, it is a bay or shelf for a particular 
product. Its negative point is the possibility of 
emptying due to the inexistence of products and the 
necessity of maximum inventory volume. For those 
of variable location, occupancy is gained because it 
uses average inventory and management is lost, since 
the same product can occupy different positions in 
the stock (Ibidem).

According to Ballou (2006), after being stored, the 
picking process or orders separation is guaranteed by 
an intensive labor use, with a high level of product 
mansonicity. That is why they are constantly aim 
of improvement, giving scope for considerable 

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operational improvements and productivity gains. 
Among them, it can be cited the handling by:

 - Orders: the way the incoming orders are handled 
has the opportunity to reduce costs, lead time and 
workforce. As an example, it can be generated a 
picking list based on the purchase order;

 - Sequencing or sorting: is the arrangement of a set 
of products based on transpotations routes so they 
can be efficiently separated. This will also save 
time, avoiding going back after products to pick 
up goods. Altghout, sequencing items based on 
the selling process may require the cooperation 
of sales staff and customers so that it could be 
possible to relate items in the most likely order 
of occurrence. Alternatively, powerpul softwares 
can be used to sequence the items into efficient 
separation lists, saving time or setbacks in the 
line;

 - Zones: process in which operators will be selected 
for a delimited area of   the stock;

 - Order splitting: derived from the zoning process, 
happens when the stock is in more than one 
location;

 - Lots: combining the products of more than one 
order at a single time;

 - Intercalation: separation and storage take place at 
the same time and

 - Pattern setting: labor performance models used 
as benchmarks for productivity measurement.

c)  Output processes: regardless of the type of 
separation used, the conference or checkout stage 
will check for errors and trigger its correction. 
Next, the product is packed, proceeding to the 
expedition, where the documentation is provided 
and the trucks are loaded (Pedreira, 2006).

The loading stage is influenced by customer orders, 
nature of the loaded material (solids, liquids, gases), 
conditioning (on pallets, in bulk), type of dock 
(high, low), type of loading (pallets, platforms) and 
transport vehicle (Mauro, 2009). Figure 4 shows the 
main exit processes. 

2.3. ABC Curve
Due to the high complexity of the production system 
of managing hundreds or thousands of products 
(Vollman et al., 2005). And according to Van Kampen 
et al. (2012) and Aktunc et al. (2019), when it comes 
to inventory organization, the analysis of Pareto or 
ABC curve is one of the most prevalent and widely 
used prioritization methodology.

It takes into account that the lack of different 
products generates different levels of impact due to 
their degree of importance (Slack et al., 2015).

According to the authors, products with high output 
generate greater dissatisfaction due to their lack, 
as well as those with high added value concentrate 

3- Send to stock 5- Orders separation4- Stock

Figure 3. Stock processes (source: author).

Figure 4. Output processes (source: author).

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a great financial impact, besides generating high 
storage cost. Thus, a common practice is the use of 
the concept of “value movement”, which corresponds 
to the product between the output quantity of the 
commodity and its unit value. In this way, large 
movements of value must generate doubled care.

The Italian economist Vilfredo Pareto, in his analysis, 
found that 20% of the products had the capacity to 
contain 80% of the total value stored, being this study 
also known as 80/20 rule (Corrêa and Corrêa, 2012). 
In Figure 5 it is possible to observe its representation.

% value

Group A : 20% of the items
represents 80% of the income

Group B : 30% of the items
represents 15% of the income

Group C : 50% of the items
represents 5% of the income

% items

1005020

80
95

100

Figure 5. ABC Curve (source: author).

3. Case study

3.1. Contextualisation

Based on the logistic distribution center of one of 
the country’s largest pharmaceutical retail chains, 
the present work focused on analyzing its inventory 
processes. More precisely, the stage of drug supply 
and separation, lacking a better balance of product 
lines, since the larger outputs should occupy more 
strategic positions in the structure where they are 
stored (flow racks).

For this, we used the Pareto analysis, or ABC curve, 
to define the order of priority to occupy better 
positions in the layout of the company distribution 
center.

3.2. A,B,C products definition
After receiving and checking the products in the 
distribution center, those classified as medicines are 
transported to their respective sector. 

As shown in Figure 6, they are firstly stored on shelves 
–storage area in blue–, being fed and separated in flow 

racks –green area. Finally, they are transported by 
mats to the conference or checkout area –in yellow– 
followed by the packing and expedition.

Send to stock Stock and orders separation Checkout and packing

Figure 6. Medicine sector (source: author).

Once the area of study is defined as the green one 
in Figure 6, the region decomposes into 2 corridors 
(line 1 and 2) of flow racks and, through the middle, 
a mat is passed. Behind the flow racks, the products 
are supplied in bin boxes (Figure 7 on the left) and 
separated by pick by light (Figure 7 on the right). 

Figure 7. Stock and orders separation (source: author).

Taking into account that the flow rack has 7 levels of 
height, it was defined that in the more extreme (first 
and seventh floor) would be placed products C curve, 
since they are ergonomically more difficult to be 
accessed. In the second and sixth floors, because of 
the median access, those of curve B would be placed. 
And finally, in floors 3, 4 and 5 (of easy access) 
would be placed products of high turn, curve A.

Counting all positions of A, B and C curves, a total 
of respectively 1609, 1076 and 2084 addresses or 
products were reached (each product occupies an 
address). Thus, the 1609 most accessed products 
(34% of the total) will be classified as curve A; the 

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following 1076 (23% of the total) as curve B and the 
remaining 2084 (44% of the total) as curve C.

Only the criterion of number of accesses per product 
was used and no use was made of its unit value, 
as it was explained in the section of theoretical 
foundation. This is due to the fact that high value-
added products are addressed in another sector of the 
warehouse called “expensives”. Therefore, the price 
of the commodity is not a relevant factor and will not 
be analyzed.

In this way, in order to stratify the information 
that will be relevant to the study, a report from the 
integrated logistics system (WMS) was used, in 
which it could be found informations such as: code 
and description of the products found at each flow 
rack address, the level or height at which they are 
found and the number of accesses during the last 3 
months before the analysis. A fragment of the result 
is in Table 2.

4. Theme discussion and results

After analysis, it was possible to draw the study case 
ABC curve as can be seen in Figure 8.

34% 57% 100%
% Products

% Accesses

87%

98%
100%

Figure 8. Study case ABC curve  (source: author).

It was found that 1609 (34%) most accessed 
products, classified as curve A, concentrated 87% 
of the accesses. In addition, 1076 products  which 
were denominated as curve B (57% accumulated) 
represented 98% of the accesses. And finally, 2084 
products were titled as curve C (100% cumulative), 
consisting of 100% of the cases. 

Knowing the ABC classification of the products 
and where they were addressed (Table 2), those 
data were inputed into Microsoft Excel®. Using its 
fuction “vlookup” and using the flow rack address 
(example: 001-001) as the primary key, it was 
possible to get all the information about the product 
curve. Figure 9 shows the representation of a flow 

Table 2. WMS report of products accesses. (source: author).
Floors Flow Rack Product Description Accesses % % accumulated Curve
4 012-024 2810 Buscopan 5482 0,21 0,21 A
1 029-101 319015 Deocil SL 10CP 5409 0,20 0,41 A
7 023-167 335479 Indapamida 30 CP 5369 0,20 0,62 A
4 012-104 220850 Ibuprof. 600 20CP 5080 0,19 0,81 A
. . . . . . . . . . . . . . . . . . . . . . . .

Figure 9. Mapping flow rack structures in Excel® (source: author).

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rack station, while Figure 10 shows a mosaic with 
the two medicine lines. 

Lastly, the exchange of poositions between products 
was established to obey a correct line balancing 
(curve A at levels 3, 4 and 5, curve B at levels 2 and 
6 and curve C at levels 1 and 7). This barter was 
treated as a project and held by stock operators on a 
sunday (the normal work operation is from monday 
to saturday). After rearrangement, the result of a flow 
rack station could be observed in Figure 11.

In the same it is observed that addresses in gray 
are those used to return empty boxes, from the 
separation to the supply. And those in dark gray are 
characteristic of double picking, that is, products 
of high output that, for that reason, occupy two 
addresses of flow rack.

It is also noted that the result has greatly influenced 
the ergonomics of suppliers and separators, making 

work less unhealthy, faster, more assertive and 
requiring a smaller amount of labor. Gains were 
accounted for as a two-hour reduction in the time 
needed to supply and separate needed products in 
an 8-hour work day (25% reduction). These data 
were obtained by reducing the average working 
time during 4 working weeks where there were no 
significant changes in the demand or seasonality of 
the analyzed products.

5. Final considerations
With the objective of improving the productivity in 
the supply and separation of a logistics distribution 
center, the present work was able to deliver to the 
scientific community and area professionals, a tool 
able to prioritize products by number of accesses, 
to classify them according to the ABC curve and 
perform a line balancing in large warehouses with a 
great quantity of products.

Figure 10. Flow rack structures mosaic in Excel® (source: author).

Figure 11. Balanced station (source: author).

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In addition, the technique proved to be simple 
to execute in a widely used software, Microsoft 
Excel®, with fast and expressive gains.

The study was limited to a specific sector and could 
be extended to other areas. In this way, it is possible, 
for example, to perform line balancing at the products 
storage area, where they are placed in shelves as soon 

as they are received and checked. The classification 
of the products with the greatest number of accesses 
and the correct storage in the most accessible places 
would probably provide benefits, such as the use 
independence of forklifts or platforms to reach them, 
reduction in supply time, reduction in the number of 
failures, among others.

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