Meditech’s problems in introducing new products are because of lack of communication between the marketing department and supply chain. New products are being introduced, which makes an impact on the production line. This process backs up the release of existing orders. Old and current customer orders get delayed. Meditech experiences poor service levels for new products, and inventory levels higher than necessary for all products.
Driving these problems both systematically and organizationally are lack of communication, bullwhip effect and customer order time. Demand is not studied in detail, information systems that record and monitor demand and inventory are poorly designed, forecasting errors are not tracked, there is a tendency to shift the blame to the customers, for example, panic ordering, there are built-in delays and monthly buckets in the planning system, the planning systems amplifies small variations in demand, poor communication with customers (doesn’t see end-customer demand).
Meditech’s problems in stable products lines have a lot to do with high levels of inventory and poor service levels. Finished goods inventory levels appeared to be remarkably high. Additionally, the actual service levels were very... [continues]
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