BUSI740 Liberty University Meditech Surgica Case Discussion

Please write a response with 3 resources to this students original discussion board port. This student was answering questions at the end of a case study. I have attached the original case study as reference. Here is what the student posted:

Introduction

Meditech is a company that manufactures endoscopic surgical instruments at a low cost mostly to hospitals and independent surgeons. The distribution and management are accomplished from a central storage warehouse that ships these products to domestic and international partners. The organization, however, has been experiencing concerns that have stemmed from the duration taken to deliver the products. As the nature of the surgeries requires time management, the equipment must be delivered on time to perform these surgeries making this the main problem the firm is battling. The approximate waiting time for Meditech customers is over six weeks. This discussion will address some ways that can be used to resolve this issue.

  1. What are Meditech’s problems in introducing new products? In manufacturing ALL products?

On average, the company produces one new product every month, which are upgrades of the old products reducing the life cycle of the product. Each time a new product is launched, the problems experienced with the old ones are not addressed (Simchi-Levi, Kaminsky, & Simchi-Levi, 2008). There has to be a lead time that Meditech gives to allow these products to be diffused into the market. Constantly launching a new product has led to problems such as supply shortages, low customer satisfaction, inaccurate forecasting, delay in deliveries high Finished Goods (FG) inventory levels. Meditech has over 200 end – products in their portfolio and working using a scalar chain it makes information dissemination difficult and communication breakdown is often experienced (Simchi-Levi, et al., 2008). Meditech also depend on suppliers for the wide range of product supply and with a waiting period of two – six weeks, it makes it increasingly difficult to constantly supply end products needed on time. Lack of communication between the departments is another factor that is causing delivery issues. All departments are supposed to be clear on what products have been ordered and the number that needs to be supplied to consumers. Communication breakdown is an issue that must be avoided at all costs as it causes double or triple orders for Meditech (Armbruster, Göttlich, & Herty, 2011).

  1. What is driving these problems, both systemically and organizationally?

There are several systematic and organizational issues that are driving the problems that Meditech is facing. The first problem is panic orders also referred to as bullwhip. This is caused by inadequate demand forecasting, long assembly lead time and also the constant introduction and launching of new products, making the inventory level insufficient to supply to consumers (Wang, & Disney, 2016). As the organization works to keep up with the demand, the resources are becoming increasingly exhausted every time a new product is launched. Another factor driving these problems is duplicate orders and redundant orders. Some of the products that are not very popular or necessary are produced in high numbers leaving products that are actually needed will little to no time in production. Forecasting of the demand is a factor that leads to poor demand or overproduction, the organization needs to pay attention to the products that are ordered and the duration it takes to have the end product delivered (Wang, & Disney, 2016). Looking at data for forecasting can be an asset if used correctly, as seen in this case, even when the initial demand decreases, there is still a backlog of high demand inventory that still needs to be produced and this effect is made worse by the launch of each new product, creating poor customer service.

  1. Why is the customer service manager the first person to recognize the major issues?

Meditech is an organization that uses a scalar chain of management which uses a chain of command that hinders the flow of information, more often than not especially if there is communication breakdown between departments. Through this chain, the customer a representative will make the customer service manager know about the complaints, who will, in turn, take the complaints higher up the chain, this could have been very useful to the company as the representatives work directly with the consumers and hear about the issues first hand. (Armbruster et al., 2011). Mr. Dan Franklin held many meetings with the hospital managers and thus arose the issue of customer dissatisfaction, poor service and delay in delivery.

  1. How would you fix the problems?

Some of the suggestion in resolving Meditech’s problems is investing in a data storage system that can be accessed by all employees. This will reduce the stress of wondering what products were ordered and how many need to be delivered (Tenhunen, & Harjuniemi, 2013). It is important to keep track of the products and the data system will also indicate the products that are moving slowly and ones that do not need to be reproduced. Another solution would be to create a method of communication that will be adhered to especially on complaints and have a department that handles these issues (Chopra, & Sodhi, 2004). This will enable the organization to sort out the issues that are pressing and investigate to see if there is a pattern emerging to resolve the problem with the customer dissatisfaction. Forecasting is a third solution to the problems that Meditech are facing, when there is a good system of data collection and implementation in place, the timeline can be seen easily and the duration of production and delivery reduced from the current six weeks to possibly two or three weeks at the most (Simchi-Levi, et al., 2008).

Forecasting and data collection will also enable the organization to have products in stock that will be used as a buffer for consumers that have either large or small orders because when consumers receive a product, they can continue with their business as they wait to the remaining products. Finally, looking for a supplier that can handle the demand that the company has will reduce the current lead time of 2 – 6 weeks by possibly half, as the demand increases, the supplier should increase in the production as well, reducing the break in the supply chain (Chopra, & Sodhi, 2004). However, if this does not resolve the problems, then reducing the number of items launched each month should be a good place to start. If the company must produce an item, give the market the opportunity to work with the previous one and listen to suggestions by consumers on what the new product should contain.

References

Armbruster, D., Göttlich, S., & Herty, M. (2011). A scalar conservation law with discontinuous

flux for supply chains with finite buffers. SIAM Journal on Applied Mathematics, 71(4), 1070-18.

Chopra, S., & Sodhi, M. S. (2004). Managing risk to avoid supply-chain breakdown. MIT Sloan

Management Review, 46(1), 53.

Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and managing the supply

chain: Concepts, strategies and case studies (3rd ed.). New York, NY: Richard D. Irwin, Inc.

Tenhunen, V., & Harjuniemi, M. (2013). Data storage architecture to support various research

needs and data lifecycle management. EUNIS 2013 Congress Proceedings: 2013: ICT Role for Next Generation Universities, 1(1)

Wang, X., & Disney, S. M. (2016). The bullwhip effect: Progress, trends, and directions.

European Journal of Operational Research, 250(3), 691-701.

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