Q1)

Meditechs prob
lem in introducing new products. In manufacturing ALL products.Meditech introduces 1 new
product per month on an average. Most of the new productsare only upgrades of old products.
This considerably reduces the life-cycle of the products.Majority of Meditech customers are
Material Managers whose primary focus is on cost anddelivery schedules but not on innovative
product features.Though no major problems arise from assembly line perspective, signs of
cognitivedissonance may arise in customers. No attempt is made by Meditech to understand the
Demand Dynamics
along the product life-cycle. Qualitative factors that have been identifiedas critical success
drivers for a new product launch are
time-to-market relative tocompetition (Porter 1985, Kailash and Lilien 1986) or product
diffusion (Bass 1969, Krishnan2000)
. But Meditech does not launch new products relative to competition and byconstantly pushing
new innovations into the market it does not allow its products to diffuseeffectively into the
market.Every new product launch requires a lead time of around 5-19 weeks (excluding
designphase lead time) which is very high. With every product launch, pushing the product
intothe market becomes the primary consideration of the sales force thereby neglectingcustomer
service for older products.These constant launches have led to:

Supply side shortages (Fig. 1-10)

Delayed deliveries (6 weeks)

Low customer service

Low customer satisfaction

Inaccurate forecasts

High FG inventory levels (Fig. 1-8 & Fig. 1-10)The product portfolio of Meditech comprises
about 200 separate end-products and thenumber is increasing. These wide ranges of products
make Meditech rely heavily onsuppliers wherein the lead time is 2-16 weeks. So practising JIT,
which would be veryeffective for Meditech, becomes impossible in this case. Meditech
organizational structurehas a long scalar chain. Information dissemination becomes difficult here
if there are toomany products in the portfolio.
Q2) Cause of the problems, systematically and organizationally
ISHIKAWA FISH-BONE DIAGRAM WAS USED TO DISSECT THE CAUSE AND EFFECT
Problemsdiscussedin Q1

ManagementMachinery ManpowerMaterials Methods

Very long scalar chain

Slow information Flow

Weak Strategies

Frequent changesin process flow

High lead time of 2weeks

Focussed on Sales

Weak Service Levels

Too dependent on Suppliers

High lead times of 2-16 weeks

High FG Inventory levels

High Safety Stock levels

No data collection

Incorrect Forecasting

Very long forecasting horizonof 1year

Short Product Life Cycle


Panic Ordering

Ineffective delivery schedules

No Risk pooling

Q3) Why is customer service manager the first person to recognize the major issues?The scalar
chain from Customer Service Manager to the Customer Service Representative isonly of two
steps. The representatives work in direct contact with dealers and affiliates andare often in direct
contact with hospital personnel i.e. their consumers. A general rule of
thumb is
If you want the best feedback, ask your consumers
.
This network would haveproved effective for feedback-information flow.Mr. Dan Franklin
himself held many meetings with hospital material managers. This brought

forth the level of dissatisfaction amongst his customers, Meditechs poor service levels and
improper delivery schedules.Q4) How would you fix these problems?The foremost thing I would
do is implement an ERP System costing around $100,000. Thiswould help in better data storage
& warehousing, analysis and forecasting.I would reduce the frequency of new product launches.
I would prefer a leaner productportfolio with PULL strategy.I would lay emphasis on better
forecasts with a shorter horizon of 1-2 months. I wouldmaintain a safety stock so as to provide a
service level of 95%.I would work to reduce the assembly cycle time from the current level of 2
weeks.I would look for new and better supplier relations to reduce the supplier lead time from
thecurrent level of 2-16 weeks.Q5) Give a similar example of Supply Chain ManagementFLYASH Supply Chain at BMM ISPAT 25MW Captive Power Plant
Fig.1 Fly Ash FlowThe fly ash coming out from the APH flows into the ESP for precipitation
and then into theSilo Tank. Its temperature is around 150 deg. C and un-burnt carbon is around
40%. So inthe present supply chain, this high energy fly ash gets wasted.A consultant was hired
to study this and he suggested a modified supply chain given below.Fig.2 Modified Fly Ash Flow
BOILER Air Pre HeaterElectro StaticPrecipitatorSILOTANKERSCUSTOMERS
COMPRESSOR
BOILER Air Pre HeaterElectro StaticPrecipitatorSILOTANKERSCUSTOMERS
COMPRESSOR

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