MTC Org Re-

Engineering – The
Supply Change
Management Strategy
Planning Team & Executive Board
Members – 5th Oct 2020
 Table of Contents

1. Introductions
2. The Case
3. Goals & Objectives
4. Key Challenges Today
5. Project Charter, Objectives & Project Champions
6. How to get there
5. The Solution Footprint
6. The Plan
7. Recommendations
8. Resources
9. Risks & How to Mitigate Risks
10. Areas of Improvement & Support Required
11. Change Management Strategy & Support Required
12. Conclusions
 Introduction

• I am a Consulting Engineer and entrepreneur with a IT Consulting and Services

background.
• Student of Coursera Supply Chain Management Specialization. Will pursue a
Master Track Certification in Supply Chain Management as my next goal.
• I joined this course to acquire business and planning knowledge to bolster my
career in Supply Chain Operations and Planning.
• I have studied the MTC case study in some detail and I hope to present my
business strategy approach in a informative and interactive set of slides.
• This is a synopsis of all my earlier assignments which was phased and was a
journey on the solution footprint for MTC as a Case Study.
 The Case
• Medical Technologies Corporation is medical devices manufacturer head quartered in Collegeville,
Pennsylvania.

• The 50,000 Sq. Mtr facility includes is a state of art manufacturing and assembly unit, a device and parts
warehouse, a storage and inventory warehouse, transport bays and the H.O for Sales and Operations.

• TQM and ISO 9000 Certified processes organization wide.

• State of art continuous process improvement and KPI driven.

• SAP Hana roll out planned for the following year.

• Adoption of Kaizen Method

• Reinforce Total Quality Management principles

• Kick off Lean Six Sigma – DMAIC Process Improvement as a Project.

• Adoption of Quality Assurance and Quality Control Processes

• Change Management Strategy sign off

• Behavioral Change Management signoff.

 Goal & Objectives

• Achieve 2.3% in savings from bottom line revenue to offset ACA Excise Tax
applicable at the Financial Year end
• Bring in best practices in Supply Chain Management
• Streamline Inventory, WH Management and Quality processes
• Drive Customer Value Creation and Create Supplier Management Strategy
• Innovate, Co-Create, Technology and Innovation in Surgical and Post Operative
care product lines
• Engage FDA for product approval, safety and quality processes for sales &
distribution in US.
 Key Challenges Today
• Lack of coordination and technology oversight to the process of tracking and traceability of a
product.
• Gaps in the execution of the process, strategy and methodology in Supply Chain Management.
• Device distributors in of control client and relationships, product inventory, forecast and
supply process.
• MTC exposed to markets changes, technology, quality and innovation.
• Client feedback, product enhancements and end-user feedback through Device Distributor.
• Inventory, Replenishment and Demand Time remains a challenge.
• Sterilization Process with 3rd party.
• Make Vs Buy is a ongoing dilemma.
• Sales Process and Incentivization a big operational expense causing mis-communications.
• Operations and Manufacturing process not in alignment
• Transport and WH Management not in alignment
 Project Objective & Champions for the Cause
• Project resources the key to the organization, its associates, project
budget (capital) and material goods required for the successful execution
and completion of a project for MTC
• Chris Evert will be the Deployment Leader, the Leader and Champion
of this project for MTC.
• Her team will follow the project charter, its objectives of the company’s
most business critical project under the executive sponsorship of the
Managing Committee under her leadership and direction.
 The Solution Footprint

Operations &
Manufacturing Strategy

Logistics & WH Management

Strategy

Sales & Marketing

Strategy

Strategic Supplier
Relationship Strategy
Product Engineering, Quality
Assurance and Product Innovation

Customer Relationship
Management Strategy
How to get there?

MTC needs to migrate

from Non-Critical Routine
Supplier to a Strategic
Supplier position with its
clients.
 The Plan

Logistics & WH Sales & Marketing Strategic Supplier Product Engineering, Customer Relationship
Operations & Mganaement Strategy Relationship Strategy Quality Assurance Strategy Strategy
Manufacturing Strategy Strategy
•Product innovation with
• Establish earning vs. • Build Win-Win equation patient/surgeon input • The company has to look
• Use 3PL service providers returns for sales • Draw long term contracts •Client participation in
representatives out for increase in
• Utilize existing GPO/MSO to cover volume, term, product release, capacity and variety
supplier WHs to keep • Rationalize sales
product engineering, marketing through mergers &
minimum required stock incentives (incentives patient services, safety, •Patient Care Extension acquisitions of other
inventory as per contract. limited to new product
development)
quality and price models. •Quality QMS/TQM companies
• RFID tagging system for • Enhanced end-user • Leverage upon additional
• Provide incentives for Initiative
pallet tracking and location relationship to varied •Safety and Handling volumes & variety to
shopfloor
identification. special cases facets of medical provide robust suppliers,
• TQM and QMS to tie into • Remaining all products technology forecast for production
leveraged to move through direct • Collaborate with and entire demand cycle.
and supplier SOPS to be channels to hospitals in R&D
• Sourcing of raw material Hospitals/Clients • Conduct trials and
process
• In-house sterilization develop innovative
Management. product in collaboration
into Inventory with hospital users
production demand to tie
• Demand Forecast and
time order receipt
• Manufacture to just-in-

•Reduced capital
blockage
•Make-to-order scenario
•Reduction in demand
lead times
•Inventory in control
•Storage capacity
managed
•Reduced inventory in
the entire chain
•Enhanced tracking
•Quicker revenue
realization
•Focus on care business
•Transport and logistics
efficiency.
•Revise sales
commissions •Build strategic supplier •Sales to lead, sales
•Sales manage client client partnership •Safety and FDA
cycle and revenue
relationships, forecast •Product innovation approvals for Devices
model
and demand time •Co-creation of value • QA
•Client/End-user to
•Establish strategic •Win-win solutions •TQM
provide client
sales channels •Build better pricing, •DMAIC
satisfaction survey to
•Customer focus to demand period and •KAIZEN
measure performance
cover quota and sales supply model.
revenue.
 Recommendations

• Six Sigma problem solving methodology helps enhance business and organization
operations.
Quality defect of 3.4 defects per million opportunities
A rate of improvement of 70 percent or better
A data driven problem-solving methodology of Define-Measure-Analyze-Improve-Control
This initiative is taken by MTC to create bottom-line breakthrough change in the organization.
• Don’t deploy without a leader – without a designated, empowered deployment leader it like a
ship without a captain. Crew members may know, but project will have no direction and
overall progress.
• Don’t take too big a bite – Focus on how little improvement on any part of the product.
Concentrating of minimizing the variation in a single product allows you to dig deep enough
to discover the real source of improvement
• Don’t think, “but we’re different” - Six Sigma is a general methodology proven itself in every
area.
• Don’t overtrain – amount of information has ratcheted up as consultants and trainer and have
competed in each other. Fact that you can learn it, doesn’t mean you need to.
 Risks
What is Risk?

A Risk is a chance of something negative happening. With Six Sigma, risks are things that can delay,
halt, or harm your project.

The types of risks can be:

• External: Occurrences outside MTC that you have little to no control over. e.g. natural disasters,
social changes, government policy modifications.
• Consequential: When things change inside the org. e.g. a new product receives a negative reaction
and end-user/client opinion declines.
• Personal: Resources or staffing issues, management problems e.g. a SME (subject matter expert or
a key project sponsor) resigns, leaving you without a key source of knowledge.
• Technical: Problems with technology and automation. E.g. MTC might find that their current
automated production machinery can’t be configured to use a new algorithm that would decrease
production time. Putting the project on hold.
• Supply: Every project requires resources. E.g. you might need material and allocation of resources
for producing a new part/product design/engineering

Risk is what’s left over when you think you’ve thought of everything.
 How to Mitigate Risk

• Brainstorming: Sit down with team members and subject matter experts to throw around ideas for risks in the
major risk categories. (Identify)

• Learned lessons: What did you learn from previous projects? Are any of the negatives from these applicable to
the new project? (Analyze)

• Keystones: What are the important supports on which the project relies? These could be people, regulatory
requirements, a piece of technology, an environmental situation. For example, say you’re designing a new piece of
hardware for the building industry. Your keystones might be a supply of cheap steel from overseas and a
continued boom in the commercial building industry.

• Assumptions: With the project team identify assumptions that the deployment manager/sponsors about the
project.

• Assumptions: With the project team identify assumptions that the deployment manager/sponsors about the
project.

You can use Fault tree analysis to chart a process and its potential failure points.
 Areas of Improvement
External - Client (GPO/MSO)
• Engineering and Innovation
• Product Quality and Instructions
• Incremental Product Range
• Patient and Surgeon Involved

Internal – Sales, Supply Chain, Transport & Operations

• Smooth Inventory turnover to reduce capital blockage. Make Vs Buy Frequency
• Kaizan (Waste Elimination), Kanban, Lean Six Sigma - DMAIC Process adherence
• Client focused restructured commission structure
• Long term and large deal focus. Contract Terms to follow Win-Win Strategy.
• Customer Relationship Management becomes critical part of sales and marketing playbook.
• Sales & Contracts Team collaboration, a process for operational excellence
 Resources

Continuous Process Control

Change Management Strategy
 Support Required
• The greatest contributors to MTC change management success are the following factors:

1.Active and visible executive sponsorship

2.Frequent and open communication about the change
3.a structured change management approach
4.dedicated change management resources and funding
5.employee engagement and participation
6.engagement with and support from middle management.

• The value of investing in the “people side” of lean/Six Sigma initiatives is widely appreciated, critical for success of
the project.
• Lean and Six Sigma projects include some investment in tools and processes for managing the people side of that
change.
• MTC to invest in people not just the tools or activities identified in the process charter.
• Change management is the discipline of applying proven, structured tools and processes to overcome the natural
resistance to change. By mitigating or even eliminating resistance, projects increase adoption, utilization, and
proficiency of the new processes and tools.
• This support from the executive sponsorship[ will drive faster achievement of the desired business results for MTC.
 Conclusions
MTC will implement activities, systems, and structure that reinforce the org behavior change.

There must be specific reinforcement plans that reward desired behavior with recognition, money, or
promotions.

Sponsors and managers should set clear objectives, publish good information, and provide immediate
feedback will sustain the changes.

If the leaders do not reinforce, the employees will not follow the process.
Survey employees to identify adoption and implementation issues
• finalize ongoing training program.
• Effective change management can make or break a lean/Six Sigma project.
• 79% more likely to meet or exceed their objectives
• 55% more likely to be on schedule
• 31% more likely to be on or under budget.

• MTC is at the crossroads of efficient and process driven organizational change and behavior with this
project, to offset the 2.3% ACA tax be applied. It is empirical in nature and theoretically based.

• Apply the proven activities and deliverables to get the employees aboard for the lean/Six Sigma journey,
and MTC will be more likely to meet its business objectives.