3. OBJECTIVE
Create a cost saving plan to reduces SG&A and total cost of goods sold in order to
at least neutralize the effect of the ACA medical device excise tax of 2.3%.
5. PLANNING
MTC needs to focus on demand, seasonality,
and determine the best forecasting method
to match supply with demand and optimize
their inventories.
After graphing demand, we can conclude
MTC is forecasting based on seasonality.
Considering 80% of the surgical kits are
standard, MTC should follow a more precise
forecasting method. Also, trunk stock must
be eliminated.
My proposal to reach stable and constant
volume production is exponential
smoothing or at the very least moving
average. This option will allow the company
to reduce inventory and costs, and
simultaneously, avoid fluctuations that may
cause other issues affecting MTC’s
performance.
6. SOURCING
MTC needs to transition from being considered a non-critical supplier to becoming
an strategic supplier.
They must continue having close relationships with doctors, but most importantly
they need to work on the following attributes:-
• An enhanced value proposition to Hospitals; win-win solution.
• Increase product knowledge.
• Wider products offerings.
• Guarantee the 12 rights.
• Have an in-house sterilization facility.
• Identify possible mergers and acquisitions.
• Invest on R&D and technology implementation.
7. EXECUTIVE SUMMARY
The sterilization process should be done in-house.
Consider third party logistics and sign long term agreements.
Technology implementation is key in several processes. For
example: smart kiosks, 3D printing, and the correct use of
RFID.
Improve inventory management: putting in place a better
forecasting method and eliminating trunk stock.
MTC’s sales reps should device their time and energy to
improve the relationship with customers and increase sales.