3 m health care

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3 m health care

  1. 1. 3M Health Care Marketing 2 Prof. P M Shingi Group-2 Sunil Soni Aditi Upreti Anish Sharma Anish Yanduri Vismay Shah Romit Sanghvi Sanket Kaleshwarwar
  2. 2. Company’s Background • Founded in 1902. • Headquarters in St. Paul, Minnesota. • Leading developer, manufacturer & distributor of consumer & industrial products. • Revenue of $17 billion in 2003. • 40 business units organized into 7 “Big Businesses” • Operation in 60 countries and served customer in 200 countries
  3. 3. Canadian Health Care System • Services funded by govt. & delivered through RHA. • Primary responsibility lied with provinces & regulatory authority with federal govt. • Fiscal pressure faced by policy makers led to - closure & merger of hospitals. • RHAs creation led to changes in delivery of health care. • Formation of larger group purchasing organizations and warehouse operations consolidation (reduced cost & inventory control).
  4. 4. 1.What value do VARs provide and how much money can be saved by adopting a direct distribution model?
  5. 5. Values provided by VARs • Only 8 VARs were handling 350 hospitals. • Provide value added service like transportation, product handling, transaction and order processing, credit management, billing, returns and inventory management. • Special services to 3M like EDI for order processing & tracing. • Acted as intermediary (cross docking). • Value added services to the hospital like small lot shipment quantities & JIT. • Investment in IT to satisfy billing preferences of the customers.
  6. 6. 2.How does 3M’s distribution network help position the company against the competition?
  7. 7. Distribution System 76% 10% 14% Sales VAR Direct Other
  8. 8. VARs Distribution Network • Health care professional for sales & technical staff. • The doctors and nurses were educated about the superior benefits of 3M’s products. • Flexible distribution system (VARs or Direct) - unit price remained same. • VAR distribution channel offered small lot shipment quantities and JIT deliveries. • It supported Cross-Dock shipments arrangements.
  9. 9. VARs Pros: • Low inventory required. • Can provide JIT deliveries. • Offers small lot shipments quantities. • Provide value added services. • VARs were handling full job of serving 350 hospitals. • EDI services • Serves more customers Cons: • High supply chain cost • Dependency on VARs • Less market information
  10. 10. Canadian Sales($ 5571428.57) Hospital Sales (70%) VARs (90%) Direct (10%) Non – Hospital Sales (30%) VARs & PHC’s
  11. 11. Direct Distribution Pros: • Saves supply chain cost (Agency Fee, Transportation cost) • No dependency on resellers • Close proximity with customers. Cons: • DC handled full case shipment only • More inventory required • Unable to serve JIT • No value added services • Difficult to serve the different 350 hospitals and ‘out of the hospital’ market • No EDI service available • Serves less customers (Full cases) • High Storing Risk
  12. 12. Recommendation – VAR • VAR’s network reaches more number of customers. 350 Hospitals and surgical centre’s long term care facilities • VARS provides value added services (transportation,billing,order processing etc.) • Small lot shipment, JIT deliveries. • Due direct distribution, costs increase by 25% • Direct - Unable to sell small(loose) shipments • VARS – possible to manage inventory. • Risks are divided.
  13. 13. Thank You

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