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    Medical Technologies Corporation: Priyadharshini.P

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    Arnab Azad
    This document proposes areas of improvement for a medical device company facing pressure from the Affordable Care Act medical device tax. It recommends restructuring the supply chain by directly contracting with hospitals instead of GPOs, working directly with distributors for logistics and sterilization, and reducing transportation time. It also suggests improving inventory management, changing the forecasting method, implementing lean production methods, customizing surgical kits, and collaborating on R&D with hospitals. Resources needed include equipping distributors for sterilization, hiring R&D experts, and lean production experts. The main risk is hospitals preferring to source through GPOs, which can be addressed through customer surveys.

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    Medical Technologies Corporation: Priyadharshini.P

    Uploaded by

    Arnab Azad
    32 views9 pages
    This document proposes areas of improvement for a medical device company facing pressure from the Affordable Care Act medical device tax. It recommends restructuring the supply chain by directly contracting with hospitals instead of GPOs, working directly with distributors for logistics and sterilization, and reducing transportation time. It also suggests improving inventory management, changing the forecasting method, implementing lean production methods, customizing surgical kits, and collaborating on R&D with hospitals. Resources needed include equipping distributors for sterilization, hiring R&D experts, and lean production experts. The main risk is hospitals preferring to source through GPOs, which can be addressed through customer surveys.

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    This document proposes areas of improvement for a medical device company facing pressure from the Affordable Care Act medical device tax. It recommends restructuring the supply chain by directly contracting with hospitals instead of GPOs, working directly with distributors for logistics and sterilization, and reducing transportation time. It also suggests improving inventory management, changing the forecasting method, implementing lean production methods, customizing surgical kits, and collaborating on R&D with hospitals. Resources needed include equipping distributors for sterilization, hiring R&D experts, and lean production experts. The main risk is hospitals preferring to source through GPOs, which can be addressed through customer surveys.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    32 views9 pages

    Medical Technologies Corporation: Priyadharshini.P

    Uploaded by

    Arnab Azad
    This document proposes areas of improvement for a medical device company facing pressure from the Affordable Care Act medical device tax. It recommends restructuring the supply chain by directly contracting with hospitals instead of GPOs, working directly with distributors for logistics and sterilization, and reducing transportation time. It also suggests improving inventory management, changing the forecasting method, implementing lean production methods, customizing surgical kits, and collaborating on R&D with hospitals. Resources needed include equipping distributors for sterilization, hiring R&D experts, and lean production experts. The main risk is hospitals preferring to source through GPOs, which can be addressed through customer surveys.

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    You are on page 1of 9

    Medical Technologies

    Corporation
    Priyadharshini.P
    Agenda
    • Introduction of yourself and the case, but please keep this brief since
    we all know the case.
    • Executive Summary - what you are proposing to do and the intended
    outcome.
    • Areas of improvement - in any order you would like to present.
    • Resources needed for the improvement.
    • Risks to your proposal and contingencies to mitigate that risk
    Introduction
    I’m Priyadharshini.P.
    The case is about a medical device company who is facing pressure due
    to Affordable Care Act (ACA) Medical Device Excise Tax which consumes
    2.3% of revenue hitting hard the profit margin of the company.
    Executive Summary(inc. Areas of
    Improvement)
    • Supply Chain Restructuring:-
    • Rather than moving through GPOs, MTC can directly approach hospitals, this
    would cut the commission for GPOs and we can achieve a higher margin even
    if we provide to the hospital at the same purchasing price.
    • We can work tightly with Distributors themselves instead of 3PL because they
    have the expertise in logistics and also sterilization can be taken care by
    Distributors themselves. This will put back the kits back in the chain sooner
    i.e. less turn around time because of less transportation time in the reverse
    supply chain.
    • Distributors themselves will deliver the regular kits to hospitals which takes
    80% of total kits which need no guidance and for the 20% of special kits
    they’ll be handled by the sales representatives influencing the Doctors.
    Reduced cost will let the hospital administrations accept the direct contract
    than through GPOs.
    Executive Summary(inc. Areas of
    Improvement)
    • Inventory:-
    • The trunk load with sales representatives should be maintained in a central
    strategic location, so it can be accessed by any region around than
    maintaining load individually. This will reduce the inventory & the cost tied
    with it.
    • Forecasting:-
    • The current forecasting method has higher MAPE than using exponential
    smoothing. MTC can change its current forecasting method to improve its
    fulfillment rate.
    • Operations:-
    • Lean methods have to be followed to optimize the production process. So the
    production cost can be reduced.
    Areas of Improvement
    • MTC can support the hospitals by customizing surgical kits as per
    hospital requirements which will let MTC charge a better price for the
    regular kits.
    • MTC can involve in R&D with these hospitals & the specialist care
    providers where they can together innovate solutions for their
    requirements which qualifies MTC as a strategic partner.
    Resources Required
    • Distributors have to be equipped for sterilization process.
    • Human resource for improved R&D processes to provide value
    addition.
    • Experts for lean practices for production.

    Other than the above mentioned, no other recommendation requires


    hefty financial investment or resource. By tweaking the flow of supply
    chain, huge savings can be made to make up to the 2.3% of revenue
    lost in tax.
    Risks & Contingency Plans
    • MTC should conduct surveys hospitals about their opinion on
    sourcing outside of the GPO as sourcing on contract is part of their
    metrics. Based on this survey and their expectations, MTC can design
    its strategy of cutting GPO from the supply chain. This is to avoid the
    risk of losing business by directly losing the help of GPOs.
    THANK YOU!!

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