Q1)Meditech’s problem in introducing new products. In manufacturing ALL
products.
Meditech introduces 1 new product per month on an average. Most of the
new products are only upgrades of old products. This considerably reduces the lifecycle of the products. Majority of Meditech customers are Material Managers
whose primary focus is on cost and delivery schedules but not on innovative product
features. Though no major problems arise from assembly line perspective, signs of
cognitive dissonance may arise in customers. No attempt is made by Meditech to
understand the Demand Dynamics along the product life-cycle. Qualitative factors
that have been identified as critical success drivers for a new product launch are
time-to-market relative to competition (Porter 1985, Kailash and Lilien 1986) or
product diffusion (Bass 1969, Krishnan2000). But Meditech does not launch new
products relative to competition and by constantly pushing new innovations into the
market it does not allow its products to diffuse effectively into the market. Every
new product launch requires a lead time of around 5-19 weeks (excluding design
phase lead time) which is very high. With every product launch, pushing the product
into the market becomes the primary consideration of the sales force thereby
neglecting customer service for older products. These constant launches have led
to:
Supply side shortages (Fig. 1-10)
Delayed deliveries (6 weeks)
Low customer service
Low customer satisfaction
Inaccurate forecasts
High FG inventory levels (Fig. 1-8 & Fig. 1-10) The product portfolio of Meditech
comprises about 200 separate end-products and the number is increasing. These
wide ranges of products make Meditech rely heavily on suppliers wherein the lead
time is 2-16 weeks. So practising JIT, which would be very effective for Meditech,
becomes impossible in this case. Meditech organizational structure has a long scalar
chain. Information dissemination becomes difficult here if there are too many
products in the portfolio.
Q2) Cause of the problems, systematically and organizationally
ISHIKAWA FISH-BONE DIAGRAM WAS USED TO DISSECT THE CAUSE
AND EFFECT
Management
Manpower
Focus on sales
Very long scalar chain
Frequent changes
in process flow
Slow information Flow
Weak
Machinery
Weak service
levels
High lead time of 2
weeks
Strategies
Problems
discussed in
Q1
Too dependent on
suppliers
No data collection
High lead times of
2-16 weeks
Incorrect forecasting
High FG inventory
levels
Very long forecasting horizon of 1 year
High safety stock
levels
Panic ordering
Short product life cycle
Materials
Methods
Ineffective delivery schedules
No risk Pooling
3) Why is customer service manager the first person to recognize the major
issues?
The scalar chain from Customer Service Manager to the Customer Service
Representative is only of two steps. The representatives work in direct contact with
dealers and affiliates and are often in direct contact with hospital personnel i.e. their
consumers. A general rule of this network would have proved effective for
feedback-information flow. Mr. Dan Franklin himself held many meetings with
hospital material managers. This brought forth the level of dissatisfaction amongst
his customers, Meditech’s poor service levels and improper delivery schedules.
Q4) How would you fix these problems?
The foremost thing I would do is implement an ERP System costing around
$100,000. This would help in better data storage & warehousing, analysis and
forecasting. I would reduce the frequency of new product launches. I would prefer
a leaner product proved effective for feedback-information flow. Mr. Dan Franklin
himself held many meetings with hospital material managers. This brought forth the
level of dissatisfaction amongst his customers, Meditech’s poor service levels and
improper delivery schedules.Q4) How would you fix these problems? The foremost
thing I would do is implement an ERP System costing around $100,000. This would
help in better data storage & warehousing, analysis and forecasting. I would reduce
the frequency of new product launches. I would prefer a leaner product.
Q5) Give a similar example of Supply Chain Management FLY-ASH Supply
Chain at BMM ISPAT 25MW Captive Power Plant
The fly ash coming out from the APH flows into the ESP for precipitation
and then into the Silo Tank. Its temperature is around 150 deg. C and un-burnt
carbon is around 40%. So in the present supply chain, this high energy fly ash
gets wasted. A consultant was hired to study this and he suggested a modified
supply chain given below.
Boiler
Air Pre Heater
Electro Static
Precipitator
Compressor
Tankers
Silo
Customers
Boiler
Electro Static
Precipitator
Air Pre Heater
Compressor
Tankers
Silo
Customers