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MTC Supply Chain Management Strategy
BY: BILALAHMED
Executive Summary
• The Medical Industry & MTC
• Affordable Care Act (ACA)
• The Challenge
• Key Outcomes
• Areas of Improvement
• Resources for Improvement
• Risks
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
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
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
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
Logistics
Inventory vs. Demand Forecasted
Areas of Improvement
• Shifting to Low Unit Measure Inventory
• Salesperson Inventory Trunk Elimination
• Salesperson Performance Based Commission
• Decentralized Sterilization at DCs
• Gaining Competitive Advantage
Resources for Improvement
• Mainly Required for Installing Sterilization Systems at DCs and
Quality Checks Decentralization
• Expansion for Competitive Advantage
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

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MTC Supply Chain Management Strategy.pdf

  • 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
  • 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