MTC business transformation consultant proposals surgery toolkit supply chain business re-work

1. MTC SUPPLY CHAIN VALUE
CREATION
Adrian Cocan - senior consultant

2. Adrian Cocan, 19+ years of experience in business building and consolidation
Extensive expertise in operations, supply chain, finance, sales and marketing

3. SITUATION ROOM
• MTC – Collegeville Pennsylvania (80 hospitals in the area)
• Excise tax hike – 2.3% of revenue meaning 10% of profits
• There are imperative cost savings and business transformation for new growth

4. STRATEGY PROPOSAL
• 1. Business model improvement for long term
• 2. New organizational design for medium term
• 3. Cost savings swift actions for short term impact

5. KPI’S ADD A MEASURE OF SUCCESS
• Strong integration with company objectives
• Feasible without interfering with daily operations
• Sustainable – as of environment, human resources, community, shareholders,
customers
• Cost saving but adding to operational improvement

6. FINANCES
• 7.03% growth rate since 2010
• 4% growth rate since 2012
• Disproportionate growth rate between SG&A in relation to growth
• Large amount of account receivables: 1Billion, 0.75B respectively

7. BUSINESS MODEL CHANGE
• In-house sterilization for shortening product release time, reduce the inventory and
costs
• Short-cut regional warehouses and local warehouses, direct feed the clients by using
smart kiosk. Assume the utilities bill for that, help hospitals cut their own costs.
• Introduction of online advisory for clients, reduce salesforce and save high paying
salaries

8. TRANSFORMATION STEPS
• Create sterilization unit and activate
• Create smart kiosk
• Create concierge style customer assistance
• Move sterilization in-house
• Start activating smart kiosk using existing salesforce
• Displace salesforce by online assistance for surgeons and hospital staff

9. SUPPLY CHAIN KPI’S
• Closure of 50% of offices simultaneous with salesforce downsize
• Kiosk feed and start operations while wind down the regional and local warehousing
• Cost controlling and operations analysis weekly
• Schedule weekly calls to hospitals to ensure SLA does not decrease
• Inventory decrease: -8% costs
• Warehouse costs: -6%
• Transport costs: -2%
• Total of 14% cost saving, 110M dollars

10. SALESFORCE AND ONLINE CUSTOMER
ADVISORY
• 12% cost saving on replacing traditional salesforce with online advisory, adding up
to 89M Dollars yoy savings
• Less insurance costs, less automobile costs, less tax
• Higher flexibility, higher speed of service, NO trunk inventory

11. CONSOLIDATED RESULTS OF
TRANSFORMATION
• Operational model; supply chain; salesforce; online assistance; business model
• 26% combined savings generates 17.4% total cost savings (out of 100% minus
margin)
• 38M dollars additional net profit

12. THANK YOU