HealthPlus Retail Group Business Plan › Section 6 › Operating Model & Supply Chain

6.1 Operating Philosophy

HealthPlus is engineered as a low-cost, high-velocity operator. Every
component of the operating model — store format, supply chain
configuration, technology stack, labour design — is calibrated to
deliver structurally lower unit costs than incumbents while preserving
the clinical quality and customer experience that define a trusted
pharmacy brand.

6.2 Store Network Design

6.2.1 Store Formats

HealthPlus operates three core store formats sized to match local
catchment density and consumer profile. Each format is templated to
enable rapid build-out (8 weeks from lease execution to store opening)
and consistent customer experience.

6.2.2 Site Selection Methodology

Site selection follows a quantitative scoring framework that combines
demographic, accessibility, and competitive metrics:

• Catchment population density and growth (Stats SA + private
  demographic data)
• LSM 4–8 household concentration (target consumer
  segment)
• Foot traffic data from external transit and retail-traffic
  vendors
• Distance to nearest competitor pharmacy (target: optimised
  network density)
• Anchor co-tenancy strength (food retail, clinic, public
  transport)
• Landlord track record and lease economics (CAM, rent escalation,
  exit clauses)

6.2.3 Rollout Trajectory

Figure 6.1

The rollout trajectory deliberately front-loads metro and Tier 1
stores in Years 1–3 to establish brand presence, secure prime real
estate, and generate data flywheel effects. Tier 2/3 and township stores
accelerate from Year 3 onward as the supply chain and brand reach
support deeper geographic penetration. The cumulative store count
reaches 450 by end of Year 5.

6.3 Supply Chain & Distribution

6.3.1 Distribution Centre Network

HealthPlus will operate three regional distribution centres (“DCs”)
sized to support 700+ stores at maturity (i.e. with headroom for the
Year 6+ expansion plan):

6.3.2 Cold Chain & Specialty Logistics

A dedicated 1,800m² temperature-controlled facility within DC1 will
serve cold-chain requirements for vaccines, biologics, and specialty
medications. The cold chain is GDP-compliant and temperature-monitored
end-to-end (DC → vehicle → store) with full audit trail per SAHPRA
requirements.

6.3.3 Replenishment & Inventory

Stores will be replenished on a daily basis (6-day cycle) from the
relevant DC. Average inventory days will compress from approximately 65
days at Year 1 to approximately 45 days by Year 5 as forecasting
accuracy improves and supplier lead times shorten. Stockout targets are
calibrated at less than 3% on top-200 SKUs and less than 6% on the long
tail.

6.4 Private Label Manufacturing

A dedicated private-label manufacturing facility will be commissioned
in Year 3, located adjacent to DC1 in Gauteng. The facility will
manufacture select OTC tablets, vitamins and supplements, personal-care
liquids and creams, and packaged wellness products. Manufacturing will
be SAHPRA-licensed, GMP-compliant, and audited annually to ISO 9001 and
ISO 22716 (cosmetics) standards.

6.5 Wholesale Distribution Arm

A wholesale distribution arm will be launched in Year 3 (Month 34) to
capture B2B revenue from independent pharmacies, primary-care clinics,
corporate occupational-health clients, NGOs, and selected government
tenders. The wholesale arm leverages the same DC infrastructure as
retail — generating incremental margin on existing fixed-cost capacity.
By Year 5, the wholesale arm is forecast to contribute R1.08B of revenue
at a 14–18% gross margin.

6.6 Technology Stack

HealthPlus is a digital-native operator. The technology stack is
cloud-first, API-driven, and built to scale from launch. There is no
legacy infrastructure debt to migrate.

6.7 Procurement Strategy

HealthPlus has designed a procurement architecture that combines
centralised buying power with category specialisation:

• Tier 1 — Strategic suppliers (top 30 by spend): direct
  relationships, multi-year contracts, joint business plans, target rebate
  ladder of 4–8% of net spend by Year 3.
• Tier 2 — Category suppliers: standardised commercial terms,
  forecast-driven volume commitments.
• Tier 3 — Private label & generics: competitive RFP per SKU;
  quality and capacity primary criteria.
• Tier 4 — Long tail: digital procurement platform with
  auto-replenishment.
• Local content target: 65% of total procurement (excluding
  patented ethicals) sourced from South African manufacturers and
  distributors by Year 5.

6.8 Quality & Clinical Governance

A Chief Pharmacist (registered with SAPC) will oversee all clinical
and quality functions, reporting directly to the CEO with a dotted line
to the Board’s Clinical Governance Committee. Standard operating
procedures cover dispensing, compounding, controlled-substance
management, cold-chain integrity, adverse-event reporting, and
clinical-services protocols. Annual third-party clinical audits will be
conducted and audit reports tabled to the Board.

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of HealthPlus Retail Group (Pty) Ltd.