1. CASE STUDY
OF
MEDITECH SURGICAL
JOHN
ASHOK
S AT H I A
NITHI
KRISHNA

2. INTRO: MEDITECH SURGICAL
• LARGO HEALTH CARE COMPANY
• MEDITECH SURGICAL – ENDOSCOPIC
INSTRUMENTS
• STRATEGY FOLLOWED
• AGGRESSIVE COMPETITION (NATIONAL MED
CORP)
• NEW INNOVATIVE INSTRUMENTS
• FIRST CLASS SALES FORCE
• RAPID PRODUCT DEVELOPMENT
• FLAWLESS REPUTATION - VISION
• MORE THAN 200 PRODUCTS

3. V.P. OPS
DIRECTOR DIR PLG,
PM 1 PM 2 SUPPLIER DISTN &
MGMT CS
CENTRAL
BU
PLANNING
CS &
BU DISTRIBUTI
ON
INVENTOR
QUALITY
Y
SUPPORT
LOGISTICS
SERVICES
MATERIAL

4. ENDOSCOPIC SURGICAL
INSTRUMENTS
Permits minimally invasive surgery
Market created in early 80’s, rapidly
growing
Old products continually updated and
replaced with new product
introductions

5. CASE: MEDITECH SURGICAL
Intent – diagnosis of supply
chain
Business overview
Supply chain
Production planning – 6 weeks
LT
What’s wrong?
How to fix it?

6. BUSINESS OVERVIEW
National and Meditech split the market
Compete based on product
innovations, customer service, cost
National sells to physicians; Meditech
sells to material managers
Customer preferences change slowly

7. EXTERNAL SUPPLY CHAIN
Hospitals
Domestic
Dealers
Part Meditech Meditech
suppliers Assembly Warehouse
Hospitals
Int’l
Meditech
Affiliates

8. INTERNAL SUPPLY CHAIN
Parts Inventory Assembly Bulk Inventory Packaging &
Sterilization FG Inventory
2 - 16 2 1
weeks weeks week

9. PRODUCTION PLANNING
Annual
Forecast
Monthly
Revision
Transfer
Requirements
Monthly
Plan
MRP
Parts Weekly
Procurement Assembly
Plan Schedule

10. Monthly PRODUCTION PLANNING
Plan
MRP
Order point;
Material
Order quantity
Plan
Parts Inventory Assembly Bulk Inventory Packaging & FG inventory
Sterilization

11. WHAT IS GOING ON?
Demand is quite predictable
Usage in hospitals is quite stable
Market share moves slowly over time
With each new product, dealer must
build inventory to fill pipeline

12. WHAT’S WRONG?
Poor service for new product
introductions
Poor forecasting?
Panic ordering?
And high FG inventory

13. WHY DID MEDITECH THINK
DEMAND WAS UNPREDICTABLE?
Poor information systems
No one looked at demand
No one had responsibility for forecast errors
Tendency to shift the blame
Built-in delays and monthly buckets in planning
system
Amplifier in planning system

14. WHAT TO DO?
Recognize that demand is stable and
predictable
Establish accountability for forecast
Eliminate planning delays and/or reduce time
bucket
Alternatively, put assembly within pull system
and eliminate bulk inventory

15. CASE DISCUSSION QUESTIONS
1. WHAT ARE
MEDI TECH’ S PROBLE MS
IN I NTRODUCI NG NEW
PRODUCTS ? IN
MANUFACTURI NG ALL
PRODUCTS ?

16. CASE DISCUSSION QUESTIONS
2. WHAT IS DRIVING
THESE PROBLE MS,
BOTH
SYSTEMATICALLY AND
ORGANIZATIO NALLY?

17. CASE DISCUSSION QUESTIONS
3. WHY IS THE
CUSTOME R SERVICE
MANAGE R THE FIRST
PERSON TO
RECOGNISE THE
MAJOR ISSUES?

18. CASE DISCUSSION QUESTIONS
4. HOW WOULD YOU
FIX THESE
PROBLEMS?

19. THANK
YOU