Business

MEDITECH CASE STUDY

Meditech is a leader in manufacture and marketing of quality and innovative low-cost endoscopic surgery instruments. The company has been experiencing good customer response to their new products that they have been introducing into the market. However, as meditech leads the pack in introduction of new products, customer dissatisfaction has been growing especially due to late delivery. Due to the nature of the industry delivery time is critical to marketing of endoscopic surgery equipments. The growing importance of Material Managers in hospitals who were the main target for Meditech’s sales team, were concerned more on cost and delivery performance of which Meditech could not fulfill the latter.

Meditech's main problem is that a bullwhip effect was produced due to organizational and supply chain problems. The method used by Meditech to balance customer demands with planned production is not effectively serving its purpose. The catalogue of products been offered by Meditech continued to grow replacing current items, making obsolete old products that are in their catalog and current customer orders. Poor customer demand forecasting, long assembly lead times and changing products are the main reason why inventory levels are not enough to satisfy customer's demands. However their inventories may have been composed of the items that they were obsoleting. In an effort to improve the customer service level, they maintained higher than necessary finished goods inventory.

Problem in manufacturing all products

The catalogue of products being offered by Meditech continues to grow and replacing current items, making obsolete old products that are in their catalog and current customer orders.

What is driving these problems?

• Poor information systems

Data on demand and forecasts was not kept making forecasting itself and its extent difficult to make. There was no standard way of measuring the accuracy of demand forecast and neither was the...