meditech surgical case Essay

IntroductionMeditech is a leader in the endoscopic functional instrument market. The guild manufactures and market low cost endoscopy surgical equipment to hospitals and independent surgeons. The companys distribution operation is arranged and managed from a central storage wargonhouse that ships its carrefours to domestic and international affiliates. The organization clear been experiencing a good node service experience in the past, however, tardily customers have expressed concerns with the date products are world delivered to them. Due to the personality of the indus accentuate, the livery of surgical equipment on time is extremely important. The on time delivery of products to its customers has become the main problem for the firm. Currently, Meditechs customers are postponement over six weeks for products to be delivered to them. This bracing practice is non acceptable and must be addressed by prudence immediately if Meditech wants to pinch competitive and kee p its current market share.Statement and Causes of the problemMeditechs main problem is that a bullwhip effect was produced due to organizational and provision chain problems. The method used by Meditech to balance customer commands with plan production is non efficiently servingits purpose. The catalogue of products being offered by Meditech continues to grow and replacing current items, making obsolete old products that are in their catalogue and current customer orders. Poor customer demands figureing, immense assembly lead clock, and changing products are the main reason wherefore inventory aims are not enough to satisfy customers demands. While the assembly lines tryto keep with demand and companys resources are getting exhausted trying to discharge a new-fangled product, the distributors then will increase their product demand, which causes a bottle be intimate effect as it moves up the supply chain process. As the initial demand slows down there are still backup o f graduate(prenominal) demand of inventory being produced. This cycle would repeat again as new products are being released to the market. Due to these problems, Meditech supply chain and management has created a shortsighted customer service.Another problem of Meditech is communication. There is not enough communication between main operations departments in the company this is causing education to become distorted as it makes its way through and through the supply chain line. The lack of communication and information increases the firms lead to demand variation as orders or demand is being process through the supply chain systems and departments. In consequence, distributors are savor the effect by long waiting periods of time, thus this as well causes them to focalize larger orders in an effort to help them compensate the waiting time. brat guild by distributors is caused by lack of communication and in spin leads into the problem of the bullwhip effect.Meditechs current distribution system is inefficient and plainly is causing an inflated demand of products. There is not enough information being shared among distributors and Meditechs operations. Each distributor receives orders from different regional warehouse, which makes it hard to see the bullwhip effect. The organizations forecasting system is also confronting serious problems. The current organizations forecast system is heady by marketing and finance departments on an annual basis. The annual forecast is then broken down into monthly and weekly forecasts and is frequently change by Central Planners according to market trends. Meditech has realized that leads to forecasting problems when they try to introduce newproducts. The organization realizes that they are unable to effectively venture demand for new products, which causes large demand fluctuations and backorders.Decision Criteria & Alternative solutions + Recommended Solution, execution of instrument and JustificationMeditech can try few alternatives process to get down demand variation and the possibility of panic ordering. The company should improve how customer ordering is processed, they should more effectively share demand information, and increase lead times on new products. The forecast methods needs to be upgraded to reflect current needs, the company should also introduce vendor managed inventory and an e-commerce web lay to share information with its customers. All of these functions should be centralized and shared among wholly of the supply chain channels that are involved. With improvements in forecasting it would be much cheaper and more efficient with the introduction of new products to expect washed-up goods inventory based on projected forecasts. By pushingis anticipating the fluctuations in demands that may be caused with the introduction of a new product. Meditech will enjoinly have products available exactly when the customer needs them, and will no longer be forced into back orde r. A push strategy will also allow Meditech to be more confident in their inventory policies and should allow them to lower their current inventory policy to a level that is more economical and feasible.Q1) Meditechs 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 life-cycle 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 products intfrom assembly line perspective, signs of cognitive dissonance may arise in customers. No attempt is made by Meditech to translate the Demand Dynamics along the product lifecycle.Qualitative factors that have been place as critical success drivers for a new product launch are time-to-market relative to competition or product diffusion. 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. both new product launch requires a lead time of some 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 tack side shortagesDelayed deliveries (6 weeks)Low customer serviceLow customer satisfactionInaccurate forecastsHigh FG inventory levelsThe product portfolio of Meditech comprises about two hundred 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 impracticable in this case. Meditech organizati onal structure has a long scalar chain. cultivation dissemination becomes difficult here if there are too more products in the portfolio.Q2) Cause of the problems, systematically and organizationally ISHIKAWA FISH-BONE DIAGRAM WAS USED TO give out THE CAUSE AND EFFECTQ3) Why is customer service manager the graduation exercise person to recognize the major issues? The scalar chain from Customer advantage Manager to the Customer Service Representative is only of two steps. The representatives carry in direct contact with dealers and affiliates and are often in direct contact with hospital personnel i.e. their consumers. A general rule of cockle is If you want the best feedback, ask your consumers. This network would have proved effective for feedback-information flow.Mr. Dan Franklin himself held manymeetings with hospital material managers. This brought forth the level of dissatisfaction amongst his customers, Meditechs poor service levels and improper delivery schedules.Q4) H ow would you fix these problems?The foremost thing we would do is implement an ERP System costing around $100,000. This would help in bust data storage & warehousing, analysis and forecasting. We would reduce the frequency of new product launches. We would prefer a leaner product portfolio. We would lay emphasis on better forecasts with a shorter horizon of 1-2 months. We would maintain a safety stock so as to provide a service level of 95%. We would work to reduce the assembly cycle time from the current level of 2 weeks. We would look for new and better supplier relations to reduce the supplier lead time from the current level of 2-16 weeks.References1. (Bass 1969, Krishnan 2000)2. (Porter 1985, Kailash and Lilien 1986)