MEDITECH SURGICAL CASE

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3/5/12

BY: ANUJ JAISWAL AMARLATA KUMARI P MOHAN SURBHI KATOCH

BACKGROUND
o

Makes Endoscopic surgical instrument . Minimally invasive surgery. Parent company: Largo Healthcare Company. Spun off from its parent company 3 years ago. Produced innovative , low cost products. Prime competitor: National Medical Corporation. Meditech concentrated on selling to hospitals material

managers ( focus: cost and livery performance) as well as surgeons (focus : product features).
o Product 3/5/12

line consist of over 200 separate end products.

DISTRIBUTION
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Central warehouse Two primary channelsDomestic dealers: supply to hospitals in their proximity, helps reduce hospital inventory cost reduce material costs. International affiliates: for international sales Subsidiary of Largo Healthcare outside USA

Ships 3/5/12

products throughout entire country

INTERNAL OPERATIONS

Suppliers
1.

Assembling

Packaging

Sterilizing INVENTOR Y ASSEMB LY LINES

SUPPLIE ASSEMBLY: QUALITY R ASSURANC E

Manually intensive. Cycle time for assembly of a batch instrument is 2 weeks 3/5/12

Contd..
2. PACKAGING: Using machine. 3. STERILIZING: uses large Cobalt radiation sterilizer for 1 hour.

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OPERATIONS ORGANISATION

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PRODUCTION PLANNING AND SCHEDULING

Process broken into two parts: Planning, based on monthly forecast of assembly and component parts orders. Daily scheduling of packaging and sterilization based on finished goods inventory levels. Forecast : Determined by marketing and finance organisations Monthly forecast based on number of weeks in the month Adjustments in forecast according to market trends and events.

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Contd..

Planning of assembly : Begins with monthly demand forecasts. Transfer requirement = month forecast finished goods inventory + safety stock Process takes 1-2 weeks. MRP system: Determines assembly schedules and parts orders based on Monthly forecasts. Lead times for internal processes. parts , bulk and finished goods inventory .

1.

2.

3.

Current 3/5/12

Contd..

Packaging and sterilizing : Order point/ order quantity.

ANNUAL FORECAST MONTHLY FORECAST TRANSFER REQ. MONTHLY PLAN

MRP

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HIGH INVENTORY LEVEL OF FINISHED GOODS

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VAR. IN PRODUCTION VS. VAR. IN DEMAND

Variation in production schedules often exceeded variation in demand

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New Product Introduction

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Production reaction to a new product introduction

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DISCUSSION
1.Problem in introducing new products:
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Decentralised warehousing Finished goods inventory levels are high. Forecasting is a problem. Data to measure forecast accuracy had not been previously tracked and no information of previous forecast and demand has been kept. Faulty methodology of forecast. Panic ordering from dealers and affiliates.

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2.
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Decentralised warehousing. Improper forecasting method. No proper data for forecasting available. Panic demand. High levels of inventory.

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3.
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Deals with occasional customer complaints to strategies. Handles issues concerning movement of product . Develops monthly production plans. Works with dealers and affiliates to keep them update on product delivery schedules and problems.

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4.

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