Meditech Surgical Case Analysis
Meditech Surgical Case Analysis Paper
Strategic Supply Chain Management
Meditech is a leader in the endoscopic surgical instrument market. The company manufactures and market low cost endoscopy surgical equipment to hospitals and independent surgeons. The company's distribution operation is arranged and managed from a central storage warehouse that ships its products to domestic and international affiliates. The organization have been experiencing a good customer service experience in the past, however, lately customers have expressed concerns with the time products are being delivered to them. Due to the nature of the industry, the delivery 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, Meditech's customers are waiting over six weeks for products to be delivered to them. This current practice is not acceptable and must be addressed by management immediately if Meditech wants to stay competitive and keep its current market share.
Meditech's main problem is that a bullwhip effect was produced due to organizational and supply chain problems. The method used by Meditech to balance customer demands with planned production is not effectively serving its purpose. The catalog of products been offered by Medltech continues to grow and replacing current items, making obsolete old products that are in their catalog and current customer orders. Poor customer demands forecasting, long assembly lead times, and changing products are the main reason why inventory levels are not enough to satisfy customer's demands. While the assembly lines try to keep with demand and company's resources are getting exhausted trying to launch a new product, the distributors then will increase their product demand, which causes a bottle neck effect as it moves up the supply chain process. As the initial demand slows down there are still backup of high demand of
Strategic Supply Chain Management
Meditech is a leader in the endoscopic surgical instrument market. The company manufactures and market low cost endoscopy surgical equipment to hospitals and independent surgeons. The company's distribution operation is arranged and managed from a central storage warehouse that ships its products to domestic and international affiliates. The organization have been experiencing a good customer service experience in the past, however, lately customers have expressed concerns with the time products are being delivered to them. Due to the nature of the industry, the delivery 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, Meditech's customers are waiting over six weeks for products to be delivered to them. This current practice is not acceptable and must be addressed by management immediately if Meditech wants to stay competitive and keep its current market share.
Meditech's main problem is that a bullwhip effect was produced due to organizational and supply chain problems. The method used by Meditech to balance customer demands with planned production is not effectively serving its purpose. The catalog of products been offered by Medltech continues to grow and replacing current items, making obsolete old products that are in their catalog and current customer orders. Poor customer demands forecasting, long assembly lead times, and changing products are the main reason why inventory levels are not enough to satisfy customer's demands. While the assembly lines try to keep with demand and company's resources are getting exhausted trying to launch a new product, the distributors then will increase their product demand, which causes a bottle neck effect as it moves up the supply chain process. As the initial demand slows down there are still backup of high demand of
References: Designing and Managing the Supply Chain (2nd ed.) David Simchi-Levi, Philip Kaminsky, and Edith Simchi-Levi McGraw-Hill, 2003 New York, NY