CASE 1:
MEDITECH SURGICAL
1. What are Meditech’s problem in introducing new products? In manufacturing All
products?
Meditech introduces one new product per month on an average and new product is
introduced into the market on the basis of upgrading existent products. Consequently, it
makes the life-cycle of the product reduce significantly. Besides, Meditech didn’t try to
understand the Demand Dynamics along the product life-cycle and didn’t launch new product
relative to competitions. Instead of, Meditech push constantly new innovations into the
market it does not allow its products to diffuse effectively into the market. With the high
priority of the sales force for the launch of new product into the market thereby
neglectingcustomer 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 finish goods 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
where in 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.
2. What is driving these problems, both systemically and organizationally?
- Management: very long schalar chain, slow information flow, weak strategies.
- Machinery: Frequent changes in process flow, high lead time of two weeks.
- Manpower: Foccused on sales, weak service levels.
- Materials: Too dependent on suppliers, high lead time to 2-16 weeks, high finish goods
inventory levels, high safety stock levels.
- Method: No data collection, incorrect forecasting, very long forecasting horizon of 1 year,
short product life-cycle, panic ordering, ineffective delivery schedules, no risk pooling
3. Why is the customer service manager the first person to recognize the major issues?
Because the customer service manager is the first person, who directly deal with the
customer’s problems. In particularly, customer service representatives work with dealers and
affiliates to keep them updated on product delivery schedules and problems and direct contact
with hospital personnel.
4. How would you fix these problem?
- With new introducing products problem:
+ I would reduce slow moving products. I would reduce the frequency of new product
launches
+ I would lay emphasis on better forecasts with a shorter horizon of 1-2 months.
- With all product
+ Should Outsourcing low margin products
+ Obsolete non-value products
+ Increase process capability
+ Online ordering Data format
+ Time base standardize Statistical method i.e. linear regression
+ Use Actual Ordering Relocated Warehouses for the optimal distance to customer
+ Look for new and better supplier relations to reduce the supplier lead time from thecurrent
level of 2-16 weeks.