Case Analysis Meditech Surgical
SUPPLY CHAIN MANAGEMENT
Final Examination
QUESTION 1: Case Analysis: MEDITECH SURGICAL.
1. What are Meditech’s problems in introducing new products? In manufacturing ALL products?
When Meditech introduces new products, the company’s output is exceeded by a higher demand, consequence of a great amount of initial orders from customers. As a result of this situation, the company faces shortage at the beginning of introduction, product cannot be delivered at the agreed time, back orders accumulate and lead times increases.
This company is not matching supply and demand adequately. Next figures (1 and 2) extracted from Simchi, L. & Kaminsky, P. (2008). Designing and Managing the Supply Chain show this situation in a clear way.
Figure 1. Production reaction to a new product introduction.
In the introduction month (month 0), demand increases overpassing the planned production and creating the matching problem.
Figure 2. Production reaction to unexpectedly high demand (not a new product introduction)
Meditech’s reaction to abrupt changes in demand for other products is also slow. The company is not matching demand with production in a consistent way. The main problem in production is the assembly process which is constraining the overall productivity of the system.
As a consequence of these supply problems regarding the “matching” issue, service level is slow and customer’s dissatisfaction is increasing. In the health care industry, poor delivery service is a serious issue. To avoid internal supply problems, some customers are incurring in “panic ordering”, thus creating an increase in the inventory level and back orders of Meditech.
The most serious issue of this case is that Meditech’s reputation is being affected by the stated problems.
2. What is driving these problems, both systemically and organizationally?
In both categories, System and organization, there are driving problems that will be described and analyzed below.
Final Examination
QUESTION 1: Case Analysis: MEDITECH SURGICAL.
1. What are Meditech’s problems in introducing new products? In manufacturing ALL products?
When Meditech introduces new products, the company’s output is exceeded by a higher demand, consequence of a great amount of initial orders from customers. As a result of this situation, the company faces shortage at the beginning of introduction, product cannot be delivered at the agreed time, back orders accumulate and lead times increases.
This company is not matching supply and demand adequately. Next figures (1 and 2) extracted from Simchi, L. & Kaminsky, P. (2008). Designing and Managing the Supply Chain show this situation in a clear way.
Figure 1. Production reaction to a new product introduction.
In the introduction month (month 0), demand increases overpassing the planned production and creating the matching problem.
Figure 2. Production reaction to unexpectedly high demand (not a new product introduction)
Meditech’s reaction to abrupt changes in demand for other products is also slow. The company is not matching demand with production in a consistent way. The main problem in production is the assembly process which is constraining the overall productivity of the system.
As a consequence of these supply problems regarding the “matching” issue, service level is slow and customer’s dissatisfaction is increasing. In the health care industry, poor delivery service is a serious issue. To avoid internal supply problems, some customers are incurring in “panic ordering”, thus creating an increase in the inventory level and back orders of Meditech.
The most serious issue of this case is that Meditech’s reputation is being affected by the stated problems.
2. What is driving these problems, both systemically and organizationally?
In both categories, System and organization, there are driving problems that will be described and analyzed below.
References: Strategic Management (9th ed.). J. Pearce and R. Robinson McGraw Hill, 2005 Boston, MA Simchi-Levi, D., Kaminski, P., & Simchi-Levi, E. (2008). Designing and managing the supply chain: Concepts, strategies, and case studies (3rd ed.). Boston: McGraw-Hill/Irwin.