MTC Case study Coursera

1. MTC Supply Chain Management Strategy
BY: BILALAHMED

2. Executive Summary
• The Medical Industry & MTC
• Affordable Care Act (ACA)
• The Challenge
• Key Outcomes
• Areas of Improvement
• Resources for Improvement
• Risks

3. The Medical Industry and MTC
• The US Medical Industry Size 2014: $110 Billion
• More Than 6500 Manufacturers
• 80% Have Less than 50 Employees
• Directly and Indirectly 2 Million People Employed
• Medical Technology Corporation: Collegeville, Pennsylvania.
• MTC Provides Medical Devices and Surgical Kits

4. Affordable Care Act
• ACA Implemented 2.3% Excise Tax
• Expected to Drag Down Average Industry Profit Margins
by 8.8%
• 2.3% of Sales Translated into 10% of MTC Revenue
• Directly and Indirectly 2 Million People Employed
• Over the Next 5 Years It May Decrease 195000 Jobs
• A Part of ACA also Implemented on Healthcare, Hospitals
cannot Share Burden of 2.3% Excise

5. The Challenges
• MTC has Strong Competitors
• GPOs Enables Cost Reductions in Hospitals
• Hospital Deals with Distributors that Covers Most of
Their Supplies
• Off-Site Sterilization
• Dual Distribution Channel the DCs and Trunk Inventory
• Increasing Sales Cost Decreasing Revenues
• RFID Tagging and Unused/Replenished Stock’s
Redistribution and Sterilization

6. Key Outcomes
• Supply Chain Management Team Found:
• Salespersons are Costing them 300000-1000000
• Off-Site Sterilization Adding Additional Cost
• Inventory Size at DCs is too Larger than Demand
• Trunk Inventory is Unnecessary

7. Logistics

8. Inventory vs. Demand Forecasted

9. Areas of Improvement
• Shifting to Low Unit Measure Inventory
• Salesperson Inventory Trunk Elimination
• Salesperson Performance Based Commission
• Decentralized Sterilization at DCs
• Gaining Competitive Advantage

10. Resources for Improvement
• Mainly Required for Installing Sterilization Systems at DCs and
Quality Checks Decentralization
• Expansion for Competitive Advantage

11. Risks
• Demand Forecast Still Leaves Uncertainty
• While Expanding with New Products and in New Markets, MTC
Might Face Challenges
• While Expanding More Investment Will be Required
• Salespersons May Start Underperforming