Business Studies
Each reply must be a paragraph long of at least 135 words or more not including references which should supported by citing at least 2 peer-reviewed journal articles between 2017-2021 for each reply. The 2 discussions that need reply will be posted below. Your replies must be in current APA format and must include a reference list. Make sure that you are adding new and relevant information with each reply. Reference sample make sure to include DOI-Drollinger, T., Comer, L. B., & Warrington, P. T. (2006). Development and validation of the active empathetic listening scale. Psychology & Marketing, 23(2), 161-180. https://doi.org/10.1002/mar.20105
Reply 1:
Meditech’s problems in both introducing and manufacturing products
Every time Meditech introduced a new product it was met with supply issues (Simchi, 1999). There are many reasons that such issues existed. Meditech’s first issue was with proper forecasting methods. Forecasting data was not being accurately recorded and there was a limited number of records being kept regarding forecasting (Simchi, 1999). Another issue was excessively high inventory. These issues caused a phenomenon known as “panic ordering”. Panic ordering is defined as a dealer/affiliate being unsure if the product will be delivered and because of that unsureity, they double their orders in hope that Meditech will deliver part of their order (Simichi, 1999). This caused a surplus in supplies.
Meditech’s CEO determined that forecasting, demand, inventory, and production rates were a decentralized process because of that there was limited communication between the departments (Simchi, 1999). Panic ordering can be seen in many different circumstances. In the Meditech article, panic ordering occurred because of Meditech’s inability to meet its demand. It occurred between companies. However, it can also occur between consumers and companies. Another example is overbuying in response to situations of mass hysteria. One example of this would be the panic buying that occurred at the inception of the COVID-19 pandemic (Jribi, 2020). When the COVID-19 pandemic began people began buying essentials (water, toilet paper, disinfectants, etc) in bulk/ excess, and this causes a shortage because suppliers were unable to meet the demand (Jribi, 2020). This also occurs during hurricanes and other natural phenomena. This causes the retailers are often having to establish limits on the amount of a product people can buy.
The drive behind the issues both systemically and organizationally
The different departments are not communicating with each other and without that interdepartmental communication, the department would be ignorant of what the others are doing. MediTech’s warehouses are also decentralized, because of this panic ordering ensues. The reason is that the dealer’s knowledge of what is being ordered is limited (Simchi, 1999). To reiterate, Meditech’s forecasting, and data entering has been lacking. That leads to each branch of Meditech being ignorant of the other branches (Simchi, 1999). The beginning of the textbook underlined some issues that supply chains faced and lack of departmental communication was a significant issue.
Causes of the customer service managers perception of company issues
Customers are one of the most important aspects of any company. When customer satisfaction starts to decrease the company’s financials can suffer as a result. Franklin perhaps began to notice a pattern amongst the customers and sales levels and choose to investigate. Since franklin works directly with customers and sales, he could see an issue. The other managers and staff do not directly see the customers and sales, because of this they would not easily see the issues. Word of mouth is one of the biggest forms of advertisements that a company receives. Customers will share their experiences with others and those people will either be drawn to the company or repelled (Primanto, 2019).
Possible Solutions for Meditech
Franklin has introduced some good ideas that would help to remedy Meditech’s issues. The largest problem is the lack of interdepartmental communication. This could be approached from a technical standpoint. Meditech would create a portal for the company that would be accessible to all branches of Meditech. The different managers would be required to consult the website and input their departmental contributions. By instilling such a system, the necessary information would be made available o all concerned parties this program would also include all of the pertinent data that Meditech needs to operate smoothly.
References
Jribi, S., Ben Ismail, H., Doggui, D., & Debbabi, H. (2020). COVID-19 virus outbreak
lockdown: What impacts on household food wastage? Environment,
Development and Sustainability, 22(5), 3939-3955.
https://doi.org/10.1007/s10668-020-00740-y
Primanto, A. B., & Dharmmesta, B. S. (2019). what happens after they laugh: How
humorous advertisements have an effect on consumers’ attitudes, word of mouth
intentions, and purchase intentions, with the need for humor playing a moderating
role. Journal of Indonesian Economy and Business, 34(2), 113-127.
https://doi.org/10.22146/jieb.23036
REPLY 2:
Meditech Surgical
Meditech spun off from their parent company three years ago and quickly captured the majority of the endoscopic surgical instrument market. Growing dissatisfaction from customers over Meditech’s inability to meet demand has caused concern. Over the past few years Meditech has released dozens of new innovative products, but each one has resulted in supply problems and poor service time. Meditech uses multiple systems to forecast demand and estimate needed inventory, which are not tied together. Product launches result in demand that exceeds productions. This in turn results in a ramp-up in production which leads to excess inventory being held when demand decreases and levels out. Accurate forecasting however is not the fix, risk management, and supply chain digitization also need to be incorporated
Problems with Product Introduction and Manufacturing
Forecasting the demand of new products tends to be more challenging than existing products since historical data is not available (van Steenbergen, 2020). With new product offerings there is also uncertainty about customer acceptance and competitive reactions van Steenbergen explains. With a short product life cycle like Meditech’s new product forecasting has even greater importance. Under forecasting results in poor service to customers and lost profit, but over forecasting can result in excess inventory that could ultimately become obsolete. Meditech experiences the same forecasting and production issues with the entire product line which has resulted in carrying 40% more inventory than they should have on hand.
Systematic and Organizational Problems
Meditech’s lack of a centralized and digitized system in the organization makes data gathering and compiling difficult, tedious, and inaccurate. There is no simple way to view historical data on demand patterns, forecasting patterns, and production patterns that could help Meditech. Zhou (2021) references a 2020 study that shows a supply chain with a digitization strategy provides a more sustainable model compared to a non-digitized model. The study reveals that a centralized system allows companies to become more data-driven and adopt big data analytics that allow organizations to make informed decisions. Meditech still must comb through hard copies of supply chain data in order to combine that information with multiple MRP systems that are not linked. Research shows that the utilization of digital technologies in supply chain operations is necessary for building a sustainable supply chain (Zhou, 2021).
Customer Service
Meditech has a strategy of bringing new products to market as quickly as possible. They utilize an aggressive sales force that pushes these new offering with little to no knowledge of inventory or lead times. The customer service team at Meditech is responsible to speaking directly to the customers and knowing when products are moved out of finished good inventory. The sales process of selling directly to hospitals makes for no buffer between customer service and the direct customers.
Recommendations
Digitization should be the number one priority for Meditech. This would allow for more historical data, accurate compilation of data, and a clearer view of the supply chain process. Meditech should also consider decreasing their new product offerings. With an average of twelve new products per year the development chain doesn’t have time to complete a product development cycle before a new one begins. Reducing the amount of new product offerings will allow for more accurate forecasting of production times, labor requirements, lead times, and inventory needed.
References
van Steenbergen, R. (2020). Forecasting demand profiles of new products. Decision Support Systems, 139, 113401. https://doi.org/10.1016/j.dss.2020.113401
Zhou, Q. (2021). Study on the Relations of Supply Chain Digitization, Flexibility and Sustainable Development—A Moderated Multiple Mediation Model. Sustainability, 13(18), 10043. https://doi.org/10.3390/su131810043
ANSWER
Post Replies
Reply 1
I agree with the post that the main issue with Meditech is poor forecasting methods. Poor forecasting methods limited the number of orders being kept. The other issue was high inventory which was caused by panic orders. Panic ordering impacts the supply chain due to high demands despite having excess stock. Nemtajela and Mbohwa (2017) argue that there is a relationship between uncertain consumer demands and inventory management. The decentralized supply chain structure influenced demand, forecasting, inventory, and production rates since the departments had limited communication. The post has a significant point that shows how panic buying occurred during the COVID-19 pandemic. People began buying essentials which led to suppliers’ inability to meet the demand. One of the company’s challenges is that the departments are not communicating with each other, and without the cross-communication in the departments, employees will be ignorant of what others are doing. The customer service manager recognized the issues since the customers shared their experiences. Putri et al., (2019) stated that companies need to revolutionize their supply chain in the globalization era if they want to continue increasing customer satisfaction. Creating a portal that is accessible to all branches of Meditech will allow contributions from different departments, thus improving cross-communication.
Reply 2
I concur with the post that the main concern is the inability of Meditech to meet demand. The company has released dozes of innovative products, but their supply chain and poor service time are the main problemsproblems. The company has experienced a trend in customer satisfaction due to unmet demands. An accurate forecasting method is lacking, leading to excess productions that lead to a high inventory when the demand lowers. Copacino (2019) states that there is a need for managers and executives to understand inventory control, purchasing, distribution, and customer service. I agree with the argument that Meditech has a short product lifecycle which leads to the need for appropriate product forecasting. Meditech lacks a centralized and digitized system, which makes gathering data, analysis, and compiling inaccurate and tedious. Considerably, a decentralized system affects the flow of information within an organization. A digitization strategy for the supply chain will play an essential role in improving forecasting (Zhou, 2021). This will allow the company to adopt data-driven and big data analytics. The customer service team has direct contact with the customers, thus getting first-hand issues about the product and supply chain. Digitization will allow Meditech to manage its supply chain through accurate compilation of data and accurate forecasting.
References
Copacino, W. C. (2019). Supply chain management: The basics and beyond. Routledge. https://doi.org/10.4324/9780203737859
Nemtajela, N., & Mbohwa, C. (2017). Relationship between inventory management and uncertain demand for fast-moving consumer goods organizations. Procedia Manufacturing, 8, 699-706. https://doi.org/10.1016/j.promfg.2017.02.090
Putri, Y. D., Huda, L. N., & Sinulingga, S. (2019). The concept of supply chain management performance measurement with the supply chain operation reference model (Journal review). In IOP Conference Series: Materials Science and Engineering (Vol. 505, Issue 1, p. 012011). IOP Publishing. https://doi.org/10.1088/1757-899x/505/1/012011
Zhou, Q. (2021). Study on the Relations of Supply Chain Digitization, Flexibility and Sustainable Development—A Moderated Multiple Mediation Model. Sustainability, 13(18), 10043. https://doi.org/10.3390/su131810043
