This document discusses supply chain management strategies for MTC, a medical device company. It notes that the US medical device industry is large and growing, but also facing consolidation. Key challenges for MTC include improving tracking, distribution channels, and costs while driving innovation. The document proposes focusing manufacturing on just-in-time strategies and inventory reduction. It suggests rationalizing sales commissions and establishing strategic hospital partnerships focused on research. Areas for improvement include aligning operations, modifying the sales model, and pursuing mergers or acquisitions. Required resources include lean consulting, management support, and investment in sterilization facilities. Risk mitigation strategies address potential sales dips, distributor boycotts, sterilization issues, and inventory shortfalls

1. SCM at MTC
Case Study By Md. Symum
Rezwan

2. CaseIntroduction-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

3. KeyChallenges
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

4. Operations -
Manufacturing
strategy
• Manufacture based
on JIT ( Lean
methodology)
• Inventory
management ( Bulk
& Niche
Manufacture)
• In-house
Sterilization facility
Logisti
cs
• Using Own 3 PL
service providers
• Utilize existing
Hospital storage to
keep basic required
Equipment-
Inventory
• RFID Tagging ( Use
of technology in
tracking / traceability)
of equipment
Sales &
Marketing
Strategy
• Establish Earnings
vs Returns for
Sales
Representatives
• Rationalize Sales
Incentives- Keep
incentives limited
to New Product
Sales
• Provide Incentives
for Special Cases
• Remaining all
Products to move
through DIRECT
Channel to
Hospitals
Establish Long term
partnership with
Identified Hospital
Groups
• Provide Enhanced
exposure to Surgeons
to varied facets of
Medical technology
• Collaborate with
hospitals in Research
& Development
• Conduct trials and
develop Innovative
Products in
collaboration with
Hospital users
Possible Inorganic
Growth
• MTC must look out
for increase in
Capacity & Variety
through-
• Merger & Acquisitions
of other firms
• Leverage upon
additional Volumes &
Varieties to provide
ROBUST Supplies &
ENTIRE DEMAND
VARIETY
ExecutiveSummary– Proposals&Outcomes
• Reduced
Blocked
Capital
• Make to
Order
scenario
• Reduction in
• Reduced Inventory
in
entire Chain
• Enhanced Tracking
• Quicker
Revenue
• Rationalize
Sales
Commissions
• Establish
Systemic Sales
Channel (Not
• Build Strategic
Partnerships
• INNOVATIV
E
Products
• Co-Creation of
Value
• Provide
Entire
Product
Range
• Arrive at
better pricing

5. Areasofimprovement
Supply Risk----
-->
ProfitImpact------
->
High Profit
Impact Low
Supply Risk
Leverage
Suppliers Go for
high bargain
Best Quality
Best Service
High Profit
Impact High
Supply Risk
Strategic
SuppliersVery close
relationships, Almost
part of company Not
only cost,
Innovative value products
Mitigate risks by
Integration
Low Profit Impact
Low Supply Risk
Non- Critical Suppliers
Not to spend more
time
Automate processes
Very limited
trasactions don’t
Low Profit Impact
High Supply Risk
Bottleneck
Suppliers Manage
alternatives
Tight controls- Service
lvl
• MTC needs to move from Non-Critical
Supplier position to STRATEGIC
Supplier position
• For Identified Key Hospital Groups
Areas for
Improvement:
Offer Win-Win solutions to Hospital
Groups
• R&D facilities
• Product Knowledge
• Wider Product base
• Enhanced Capacity
Align Operations constraints
• Manage Inventory Turn-Overs to reduce
blockage of capital
• Make-Vs-Buy situations
• Lean Operations
• Technological applications
Modify Sales model
• Systemic Direct sales to be prioritized
• Rationalize commissions system

6. ResourcesRequired
Operations
• LEAN Manufacturing Consultancy
• Willingness from Top Management to drive
Change
• Employee Orientation
Strategy
• Identification of Target Hospital Segment
• Establishing Long term commitment Aspects:
• Co-Creation of Innovative Products
• Enhancing of Knowledge base of Surgeons
• Expenses on Research & development
• Consultants to Identify Key Mergers /
Acquisitions
• Investment to install Inhouse Sterilization

7. Risks&Mitigation
RISK:
Sales dip on account
of Bonus
Rationalization
• MITIGATION
• Form Trained Specialist
Team(s)
• Identify critical &
New Equipment &
Train surgeons
accordingly
• Keep Trained Specialist
Team on stand-by in case
of any emergency
assistance required by
Surgeons
• New Equipment
marketing to be done by
Specialist Teams
RISK:
Boycott by
Existing
Distributors
• MITIGATION
• Build rapport with
Identified Hospital Groups
• Enter into Long-
term contracts
• Pass on Quantity & Long-
term Discounts to
identified strategic
partners
RISK:
Inability to operate
Inhouse- Sterilization Unit
• MITIGATION
• Training of employees
• Hiring of trained
employees
RISK:
Non-Fulfilment of
Hospital demands on-
time due to reduced
Inventory
• MITIGATION
• Utilize Hospital Inventory
to
keep Key stocks
• Scientifically
Assess Inventory
levels to be
maintained
• Keep Adequate Safety
Stock for Identified
Critical Kits

8. Thank you.
ALL THE BEST
!!!!!!!!!