Supply chain management Meditech Surgical Discussion

Please take the following answers to the 4 questions below and rewrite the answers in your own words and add 1 peer reviewed article in APA format with DOI. All peer reviewed articles must be from (2017-2022)

Supply Chain Management.Case Study 1: Meditech Surgical.

1. What are Meditech’s problems in introducing new products? In manufacturing ALL products?
Seems like the main business strategy of Meditech is to introduce new products into the market to satisfy the customers’needs and be up-to-date in the market. And this might be one of the reasons, which made the company successful among their competitors. For the company, introducing and selling the new product wasn’t an issue, since their products, mostly, updated based on existing products. However, whenever, Meditech introducing new products, the customer service level were getting low or to be specific, customers were unsatisfied with order deliver. The company were facing huge drawback in supply chain to keep up with customer demand, their initial demand. On the other hand, the inventory of finished products was extremely high that they could decrease inventory level at least 40%. But they couldn’t meet the customers demand on time delivery and yet, couldn’t decrease the inventory! One of the reasons is their forecasting wasn’t accurateenough.I would say forecasting was terrible since “there was no routine way to see incoming demand, inventory, or production demand for particular instrument”. It was hard to do forecasting since they didn’t have any data on that, or it’swasn’t in a same format. Another problem was panic ordering from dealers and buyers. It causedunrealistic increase in demand of a productand hard to controlsince the company can’t control buyers action. This panic ordering also, made hard to come up with accurate forecasting.

2. What is driving these problems, both systemically and organizationally?
I think company’s strategy of persistent introduction of the new productwas one the leading reason of creating problems. Not analyzing their customers’ demand, which causes the wrong forecasting,and Meditech’s supply, which causes them shortagewith each product introduction, drive the company’s to the big problem. In the production, the policy of one week’s notice for responding to scheduling changesgives the production levelacts one week behind the forecasted schedule.Moreover, the information to have accurate forecast had not been tracked or kept in
the system, which makes forecasting more hard to obtain and time consuming. Another thing is that Meditech management ignorance on setting the fixed inventory level. Even though, they knew thatinventory level was 40% higher than required, theydidn’t do anything due to their fear of shortage. And lastly, the company’s decentralized organization, the dealers the dealers had no control over the demand from each warehouse, so warehouses could make a“panic order” creating delusional shortage. Plus, the format of data storage on different systems was not standardized,which leads to the problem to generate reports.

3. Why is the customer service manager the first person to recognize the major issues?
First of all, the customer service manager is the one who directly contacts and in charge of the customer satisfaction. Therefore, he is the one, who receives positive or negative feedback from the customers. And sinceforecast hadn’tbeen compared with the actual demand in the past to track its accuracy, the company could see the problem and low service level only through customerscomplain. Moreover, he could directly see what themain problem issince customer will tell him what isn’t satisfying them.

4. How would you fix these problems?
First of all, I would work on improving the forecast system. In order to have a accurate forecasting, the company need to keep a track and standardize data storage to compare the actual demand and forecast for the last few years.An easy statistical method (linear regression and etc.) based on past forecasting data will help them to do accurate analysis. It seems like, the demand for new product in high only first week and afterward more likely became stable. Second thing, which I will do, is improve the company’s IT system. The company should have centralized organizational system; therefore, they could have quick access to the required data (not going through the papers and hard copies). And having a standardize format for all forecasting and demand to utilize the report. Thirdly, since the Meditech reputation has being ruined due to on-time delivery mistake, the company needs to gain dealers and buyers trust again. They need to work closely with buyer to determine their real demand, which also, could help to decrease “panic order”. And lastly, it would have
being really nice to have latest or innovative IT system, so they could have more convenient ways for order (online order), supply and delivery the product.

ANSWER

Supply Chain Management-Case Study 1: Meditech Surgical

What Are Meditech’s Problems in Introducing New Products? In Manufacturing ALL Products?

Meditech has successfully gained competitive advantages in the surgical instrument market. However, when introducing new products, the company faces a significant drawback in the supply chain. There has been a constant supply shortage when introducing a new product, poor delivery systems, and delays linked to poor forecasting analysis. They have been unable to keep up with the customer demand during the introduction of new products. Customers are waiting for more than six weeks to have their orders supplied due to poor scheduling and forecasting.

The inventory of finished products has decreased by about 40% and could still not meet the customer demands on-time delivery. Their customer service is getting low since they have inaccurate forecasting. They do not have any data that would be used in forecasting to see the incoming demand. For instance, an unrealistic increase in demand due to panic ordering from the buyers and dealers is hard for the company to control. Considerably, inaccurate forecasting means poor sales prediction or customer demand which results from oversupplying or undersupplying of inventory (Putri, Huda, and Sinulingga, 2019). Poor forecasts can result in stock-outs in case of increased demand, which directly affects the profitability of the company and decreases customer satisfaction.

What is Driving These Problems, both Systemically and Organizationally?

One of the major issues causing the problem at Meditech is the lack of communication. Systematic problems result from a lack of communication in the supply chain. Poor communication can result in issues in the supply chain operations, such as late deliveries, delays, and stocks out. The poor supply chain has led to underestimation, which has led to high costs and bloated inventory (Nemtajela and Mbohwa, 2017). Without proper controls, the organization will encounter poor supply chain management. The poor supply chain management causes wrong forecasting and shortage with each product introduction.

Management ignorance has been another major problem in the management of inventory. The management has failed to set a standard inventory level that may help them manage their inventory and forecast high demand. Meditech is a decentralized company since the dealers control the warehouse demands. Different dealers have the purchasing power to order supplies at their discretion and make panic orders, creating a delusional shortage.

Why is The Customer Service Manager the First Person to Recognize the Major Issues?

The customer service manager is the first to identify the key problems since they handle all product delivery issues, complaints, and schedule problems. The customer service manager has direct contacts with the customers, pays attention to customer satisfaction and order fulfillment (Copacino, 2019). Therefore, they receive negative and positive reviews from the customers concerning the introduced product. The customer service manager can forecast customer demand based on the inventory and order management data metrics.

How Would You Fix These Problems?

The first thing is to improve on the forecast system. A forecasting system is essential since it offers the ability to make informed decisions and build data-driven approaches in the management of demands (Pantev, 2019). The forecast system will predict future changes and trends that will make the company proactive rather than reactive. The company should have a standardized track and data storage to compare the forecast and demand. A data management system will effectively minimize errors in forecasting since standardized data will be used when responding to customer demands and market changes.

References

Copacino, W. C. (2019). Supply chain management: The basics and beyond. Routledge.

Nemtajela, N., & Mbohwa, C. (2017). Relationship between inventory management and uncertain demand for fast-moving consumer goods organizations. Procedia Manufacturing, 8, 699-706.

Pantev, P. (2019). The Role of Forecasting. Processes Of International Negotiations, 219.

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