Supply Chain Management Strategy Week 6

1. MEDICAL
TECHNOLOGIES
CORPORATION
Supply Chain Management Strategy
Dimitrios Kalormakis

2. Case Introduction- Industry & Deliverables
Industry Backdrop:
• United States is the largest medical device market in the world:
• Size: $110 billion in 2014. Expected to reach $133 billion by 2016.
• More than 6,500 medical device manufacturers
• The sector employs almost half a million people directly & indirectly 2 million more
• Top 4 organizations cover $ 23 billion ( 24%)
• Industry under consolidation ( -0.6% YoY reduction in no. of manufacturers)
• Overall Growth 4.8% by 2020 for Industry – Specifically Growth of 7.6% in Medical device Distribution
Key Factors:
• Ageing Population in USA
• Increase in number of people coverage ( Due to Health Insurance Coverage Bill)
• Increasing of Process Innovation Requirements by Hospitals Key Deliverables:
• Costs savings to cover Affordable Care Act (ACA) Medical Device Excise Tax of 2.3% of revenue
• Translates into over 10% reduction in MTC’s profits

3. Key Challenges Key Challenges- MTC :
• Technological assistance in terms of Tracking & traceability
• Innovation in Supply chain management
• Innovative approach towards current Distribution Channels
• With Rationalized Costs
• Consolidation of channels
• Clarity on approach towards Focus Market Groups
• Regional Segmentation
• Management of Internal Dynamics
• Sales Agents’ Commission methodology
• Inventory Management
• Make-vs-Buy (Outsource) nodes in Supply Chain