Assignment for the Rutgers State University for the Supply Chain Management course.

2. This presentations shows the strategy MTC should follow to reduce the
impact of The Affordable Care Act (ACA) on its activities

3.  If the revenue stays flat (5953.86 million), MTC will pay around 136 million of the new
Medical Device Excise Tax.
 If revenue is increased in 10%, as expected, from 6550 million USD there will be around
150 million USD (2.3%) of the MDET.
 The goal is to reduce around 14% of total costs so net earnings can be kept.
 It is very clear that the selling cost is increasing too much, while net earnings do not
catch up. In four years, the selling cost has increased in 62%, while net earnings
decreased in 9%. This is something that may be discussed with the directors, as it may
represent salespeople lay-off.

4. It is very clear that the
selling cost is increasing too
much, while net earnings do
not catch up. In four years,
the selling cost has increased
in 62%, while net earnings
decreased in 9%. This is
something that may be
discussed with the directors,
as it may represent
salespeople lay-off.

5.  Negotiating the cost of goods and get discount by improving payment terms.
 Exploit this cost and see if there is any part of the acquisition, transportation and
even other services related (sterelization, for example) to them that may be
changed and bring MTC savings.
 Safety stock could be reduced by making replenishment more often. This could be
reached by rethinking the whole logistics network and investing in better forecasting
methods.

6. The manufacturers assemble the products. After that, the surgical kits are sterilized off-site.
Then, the kits are sent directly to the hospital using 3PL or a DC. Unused instruments and devices
are shipped back into the distribution network.

7.  The disadvantages of off-site sterelization are: it involves more transportation cost,
time (around 5 working days) and risks when it comes to moving the products (they
may be damaged on the way or even lost);
 By bringing sterelization inside, MTC would obtain know-how and could guarantee
better quality control;
 Making replenishment more often by reorganizing the network through multiple DCs;
 Setting forecast accuracy measure methods;
 Beyond that, the salesteam must be prohibited to pick up material by themselves
and bypass Central Receiving.

8.  Having an in-house small inventory based on the existing data will allow MTC to
have more accurate information and set a logistics plan with safety.

9.  Two types of forecasting have been studied: using the moving average for three
periods and smoothing average using 0,95 Alpha. Both methods had an accuracy
better than the forecast MTC had done initially.

10.  MTC’s current forecasting methods
accuracy:
 MSE 102587756,86
 ME -635,08
 MAPE 6%
 Smoothing average:
 MSE 98169116,23
 ME 467,42
 MAPE 6%
The forecast method chosen presented will result in less inventory, less salespeople
rushing after material and would allow MTC to plan their transportation network and
replenishment plan better.

11. How MTC should work:
 Having the best people working;
 Providing best products, services, and resources, such as being first in line for the
latest medical technology;
 Priority allocation of resources;
 Having an open dialogue with hospitals and understanding their needs, building a
trust-based relationship.

12.  Getting all hospital departments on the same page is a key strategy for optimizing
healthcare supply chain management. In the era of value-based care, healthcare
organizations are focused on reducing redundancies and eliminating waste, but
providers also need to work together to effectively reduce costs and boost
performance.

13. Brendha Oliveira