1. THEME: Meditech Surgical
BACKGROUND:
Endoscopic Surgical Instruments
Permits minimally invasive surgery
Market created in early 80’s, rapidly growing
Old products continually updated and replaced with new product introductions
Business Overview
National and Meditech split the market
Compete based on product innovations, customer service, cost
National sells to physicians; Meditech sells to material managers
Customer preferences change slowly
What’s wrong
Poor service for new product introductions
Poor forecasting?
Panic ordering?
High FG inventory
CURRENT CONDITION:
Demand is quite predictable (Major Problem)
Usage in hospitals is quite stable
Market share moves slowly over time
With each new product, dealer must build inventory to fill pipeline

2. To: ___________________________
By: ___________________________
Date: __________________________
ROOT CAUSE ANALYSIS:
Why did Meditech think demand was unpredictable?
No one looked at demand
No one had responsibility for forecast errors
Poor information systems
Built monthly planning system

3. To: ___________________________
By: ___________________________
Date: __________________________
TARGET CONDITION:
Built monthly planning system to reach a steady state
1. In condition (1), when the order flow ups but the production and finish goods inventory cant fulfill the
demand, it cause the back order.
2. When condition (1) occurs, it must increase the production to follow up the demand
3. When the condition (2) occurs, at times the demand was not increasing any further, the FG inventory
will shoots up
4. When condition (3) happens, reduce the production level to matching the demand
5. After that, the condition is beginning to steady

4. To: ___________________________
By: ___________________________
Date: __________________________
IMPLEMENTATION PLAN:
Action Responsibility Deadline
Establish reliable forecast
Eliminate planning delays and/or
reduce time bucket
Put assembly within pull system and
eliminate bulk inventory
FOLLOW-UP:
Plan Actual
• Compare the forecast and actual demand • The forecast result must be closed to
actual demand
• Supervise the planning • Regular monitoring of the plan
• Review the change in assembly system and • Monthly feedback
inventory