Analyze the current situation and propose a strategy to improve MTC’s supply chain performance and competitiveness.

1. Lean Supply
Chain Strategy
for Medical
Technologies
Corporation
BY HAMZEH TATOU

2. Introduction
 MTC produces a range of products, such as pacemakers, stents, catheters, and surgical instruments, for
various markets, such as hospitals, clinics, and pharmacies.
 MTC operates in a highly competitive and regulated industry, where product quality, customer
satisfaction, and innovation are critical for success.
 MTC is facing some challenges in its supply chain operations, such as high inventory costs, low customer
satisfaction, and poor quality control. These challenges are affecting MTC’s profitability, market share, and
reputation.
 My task is to analyze the current situation and propose a strategy to improve MTC’s supply chain
performance and competitiveness.

3. Executive Summary
 In this presentation, I will propose a lean supply chain approach that focuses on eliminating waste,
increasing efficiency, and enhancing customer value. The intended outcome is to achieve the following
results within one year:
o Reduce inventory costs by 30% by implementing a just-in-time (JIT) system that synchronizes supply and
demand, minimizes inventory levels, and eliminates overproduction and obsolescence.
o Increase customer satisfaction by 20% by adopting a pull system that responds to customer orders quickly,
accurately, and flexibly, reduces lead times and delivery times, and improves service levels.
o Improve quality control by 15% by applying the Plan-Do-Check-Act (PDCA) cycle that identifies and
eliminates the root causes of defects, errors, and rework, implements corrective and preventive actions,
and monitors and evaluates the outcomes.

4. Diagram of a Lean Supply Chain

5. Areas of Improvement
1. Demand Forecasting
 MTC needs to improve its demand forecasting accuracy and responsiveness by using advanced data analytics and machine learning
techniques.
 This will help MTC to align its production and distribution plans with the actual customer demand, and avoid overstocking or
understocking of products.
 For example, MTC can use a data analytics software such as Power BI to collect, analyze, and visualize the historical and current data on
customer demand, market trends, and competitor actions.
 MTC can also use a machine learning algorithm such as ARIMA to generate accurate and reliable demand forecasts based on the data.
 MTC can then use these forecasts to plan its production and distribution activities in advance, and adjust them as needed based on the
real-time demand signals from the customers.

6. Areas of Improvement
2. Supplier Relationship Management
 MTC needs to establish long-term and collaborative relationships with its key suppliers, and adopt a strategic sourcing approach that
considers not only the price, but also the quality, reliability, and sustainability of the suppliers.
 This will help MTC to secure a stable and high-quality supply of raw materials and components, and reduce the risk of supply disruptions
or delays.
 For example, MTC can use a strategic sourcing framework such as Kraljic Matrix to classify its suppliers into four categories based on their
importance and risk: strategic, bottleneck, leverage, and non-critical.
 MTC can then adopt different sourcing strategies for each category, such as forming long-term partnerships with strategic suppliers,
reducing dependency on bottleneck suppliers, negotiating for better prices and terms with leverage suppliers, and simplifying the
procurement process with non-critical suppliers.
 MTC can also use a supplier relationship management software such as SAP Ariba to facilitate the communication, collaboration, and
evaluation of its suppliers.

7. Areas of Improvement
3. Inventory Management
 MTC needs to adopt a just-in-time (JIT) inventory system that minimizes the amount of inventory held at each stage of the
supply chain, and delivers the products to the customers as soon as they are needed.
 This will help MTC to reduce inventory holding costs, improve cash flow, and increase inventory turnover.
 For example, MTC can use RFID tags and barcode scanners to track the inventory levels and movements of its products
throughout the supply chain.
 MTC can also use an automated warehouse system that optimizes the storage and retrieval of products using robots and
conveyor belts.
 MTC can then use these technologies to reduce the inventory holding time, space, and cost, and increase the inventory visibility
and accuracy.

8. Areas of Improvement
4. Quality Management
 MTC needs to implement a total quality management (TQM) system that ensures quality at every stage of the supply chain,
from design to delivery.
 This will help MTC to prevent defects, reduce rework and scrap, and enhance customer satisfaction and loyalty.
 For example, MTC can use a quality management software such as ISO 9001 to define and document its quality standards,
policies, and procedures.
 MTC can also use a quality control tool such as Six Sigma to measure and improve its quality performance, by identifying and
eliminating the sources of defects, variation, and waste.
 MTC can then use these methods to enhance its product quality, customer satisfaction, and brand reputation.

9. Resources Needed for Improvement
 Technology: MTC needs to invest in technology that supports its lean supply chain strategy, such as data
analytics software, machine learning algorithms, RFID tags, barcode scanners, and automated warehouse
systems.
 Training: MTC needs to provide training to its employees on the principles and practices of lean supply
chain management, such as waste elimination, continuous improvement, customer focus, and teamwork.
 Culture: MTC needs to foster a culture that embraces change, innovation, and collaboration among its
internal and external stakeholders, such as managers, workers, suppliers, and customers.

10. Risks to Proposal and Contingencies to Mitigate Them
 Resistance to change: Some employees or suppliers may resist or oppose the changes proposed by the lean
supply chain strategy, due to fear of losing their jobs or bargaining power. To mitigate this risk, MTC needs to
communicate the benefits and rationale of the changes clearly and transparently, and involve the stakeholders in
the decision-making and implementation process.
 Uncertainty in demand: The lean supply chain strategy relies on accurate and timely demand forecasting, which
may be affected by external factors such as market trends, customer preferences, or economic conditions. To
mitigate this risk, MTC needs to monitor the demand signals closely and regularly, and adjust its production and
distribution plans accordingly.
 Disruption in supply: The lean supply chain strategy reduces the buffer inventory held by MTC, which may expose
it to the risk of supply shortages or delays caused by factors such as natural disasters, strikes, or quality issues. To
mitigate this risk, MTC needs to diversify its supplier base and maintain backup suppliers for critical items.

11. Conclusion
1 2 3
The lean supply chain
strategy is a comprehensive
The strategy will help MTC
to reduce inventory costs
The strategy will also help
MTC to achieve its vision of
becoming a global leader
effective way to improve
MTC’s supply chain
performance
increase customer
satisfaction
In medical devices
competitiveness. improve quality control
within one year
And equipment