CASE STUDY OFMEDITECH SURGICAL JOHN ASHOK S AT H I A NITHI KRISHNA
INTRO: MEDITECH SURGICAL• LARGO HEALTH CARE COMPANY • MEDITECH SURGICAL – ENDOSCOPIC INSTRUMENTS• STRATEGY FOLLOWED • AGGRESSIVE COMPETITION (NATIONAL MED CORP) • NEW INNOVATIVE INSTRUMENTS • FIRST CLASS SALES FORCE • RAPID PRODUCT DEVELOPMENT • FLAWLESS REPUTATION - VISION • MORE THAN 200 PRODUCTS
V.P. OPS DIRECTOR DIR PLG, PM 1 PM 2 SUPPLIER DISTN & MGMT CS CENTRAL BU PLANNING CS & BU DISTRIBUTI ON INVENTORQUALITY YSUPPORT LOGISTICSSERVICES MATERIAL
ENDOSCOPIC SURGICAL INSTRUMENTSPermits minimally invasive surgeryMarket created in early 80’s, rapidly growingOld products continually updated and replaced with new product introductions
CASE: MEDITECH SURGICAL Intent – diagnosis of supply chain Business overview Supply chain Production planning – 6 weeks LT What’s wrong? How to fix it?
BUSINESS OVERVIEWNational and Meditech split the marketCompete based on product innovations, customer service, costNational sells to physicians; Meditech sells to material managersCustomer preferences change slowly
PRODUCTION PLANNINGAnnualForecast Monthly Revision Transfer Requirements Monthly Plan MRP Parts Weekly Procurement Assembly Plan Schedule
Monthly PRODUCTION PLANNING Plan MRP Order point; Material Order quantity PlanParts Inventory Assembly Bulk Inventory Packaging & FG inventory Sterilization
WHAT IS GOING ON?Demand is quite predictableUsage in hospitals is quite stableMarket share moves slowly over timeWith each new product, dealer must build inventory to fill pipeline
WHAT’S WRONG?Poor service for new product introductionsPoor forecasting?Panic ordering?And high FG inventory
WHY DID MEDITECH THINKDEMAND WAS UNPREDICTABLE?Poor information systemsNo one looked at demandNo one had responsibility for forecast errorsTendency to shift the blameBuilt-in delays and monthly buckets in planning systemAmplifier in planning system
WHAT TO DO?Recognize that demand is stable and predictableEstablish accountability for forecastEliminate planning delays and/or reduce time bucketAlternatively, put assembly within pull system and eliminate bulk inventory
CASE DISCUSSION QUESTIONS1. WHAT AREMEDI TECH’ S PROBLE MSIN I NTRODUCI NG NEWPRODUCTS ? INMANUFACTURI NG ALLPRODUCTS ?
CASE DISCUSSION QUESTIONS2. WHAT IS DRIVINGTHESE PROBLE MS,BOTHSYSTEMATICALLY ANDORGANIZATIO NALLY?
CASE DISCUSSION QUESTIONS3. WHY IS THECUSTOME R SERVICEMANAGE R THE FIRSTPERSON TORECOGNISE THEMAJOR ISSUES?
CASE DISCUSSION QUESTIONS4. HOW WOULD YOUFIX THESEPROBLEMS?