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Problems Faced
Growing customer dissatisfaction
Strained production capacity
Meditech consistently failed to keep up with demand during
the flood of initial orders.
Poor service Delivery - customers had to wait over six week
to have their orders delivered.
Distribution
Distribution through a Central Warehouse
Primary Channels
Domestic Dealers
Primarily for domestic sales
Order and receive products from multiple
manufacturers
Independent and autonomous entities
International Affiliates
Wholly owned subsidiaries of Largo
Healthcare
Product shipping throughout the country
International affiliates submit orders to
Meditech and Meditech fills them with
available product.
Internal Operations
Assembly
Manually Intensive
Components parts placed in Inventory after Quality
Assurance
Run by a team of cross-trained production workers
Typical cycle time 2weeks
Lead time 2-16 weeks
Packaging
Using several large packaging machines
Enough capacity, has not restricted output
Sterilization
Using a large cobalt radiation sterilizer
Can sterilize as much product as will fit inside its four
walls.
Capacity limitations not a problem
Operations Organization
Meditech does not have separate forecast for new products. It goes from
the yearly forecast schedule
Every time a new product was introduced it resulted in serious supply
problems[2-16 weeks] which in turn resulted in the dissatisfaction of
customer due to poor service resulting from each product introduction.
Backorder cancellationsdue to high waiting time
Meditech gives the impression that they were using a cost-effective
supply chain, instead of a responsiveness supply chain that they should
have been using considering highly innovative products.
They should plan a new introduction cycle two months before the sales
force starts marketing the product