Meditech now is the main company that captured a majority of the endoscopic surgical instrument market. It manufactures the low cost and good price endoscopy surgical equipment for their customers. The strategy of Meditech’s rapid product development is to introduce flawlessly to protect Meditech’s reputation and sales of other products. Actually, it consistently failed to keep up with demand during the flood of initial orders. Right now, the distribution operation of Meditech is sending products from central storage warehouse to domestic and international dealers or affiliates. It wants to offer good customer service and make customer satisfy; but the delivery time of surgical equipment is always delay, the process of manufacturing the equipment needs must long time, most of time is over six weeks; both of these make customers unsatisfied. The main problems of Meditech right now exist on its current supply chain system, especially on the new product introduction and overall products production line. On average, Meditech launches one new product once per month; majority of the new products are directly upgraded based on the previous products. This might shorten the life-cycle of products, however; Meditech did not recognize that the demand dynamics impact along the product life-cycle. Due to Meditech did not take advantage on facing the problem; there has been a huge supply problem launching at every new. Due to the consistent shortage with each introduction, it turns out the sign of complaints and lowers the customer satisfaction level even there are no major problems in the internal operation. Apparently, the main problem in new products introduction is lack of communications between marketing and supply chain departments. The production line is influenced as new products are being introduced. The process backups the release of existing orders so that old and current customers’ orders are all delayed. General speaking, every time a product launches, Meditech pushes the product into the market that becomes the primary consideration of the sales force without maintaining customer service for older products. In terms of manufacturing overall products, the main problem is that a bullwhip effect was occurred because of the organizational and supply chain issues. The method used by Meditech to balance customer demands with planned production is not effectively serving its purpose. The products portfolio which been offered by Meditech continues to grow and replace current items makes obsolete old products that are in their own catalog and current customers’ orders. The following are the main reasons why Meditech are not able to satisfy customers’ demands even with its high inventory level: -Poor and inappropriate forecast method was applied on forecasting customer demands -Redundant lead times on products assembly
-Inconsistently changing product
There is a big issue on forecasting problems when Meditech tries to introduce new products. The organization realizes that they are unable to effectively control over demand for new products that results in large demand fluctuations and backorders. This brings the significant issues for them to manage their inventory. As we discuss before, there are many problems existed when the new product are introduced. There are two main sides driving these problems, systematically and organizationally are various. System: demand is uncertain, the panic order from distributors is caused by lack of communications and bullwhip effect which is led by lack of communication. Meditech current distribution system is inefficient and obviously causing a fluctuated demand of products. There is not enough information being shared among distributors and Meditech operation department. Each distributors receives orders from different regional warehouse where makes it difficult to foresee the bullwhip effect. This results in longer lead time through the supply chain system. 1. There is heavy bullwhip...
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