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Endoscopic surgical instrument maker
Parents company: Largo Healthcare Company
Spunned off 3 years ago
Primary competitor: National Medical
Same Development Strategies but different Sales
Continuous development of old products continually & increase new product introductions
National sells to surgeons
Meditech sells to material managers, hospital & surgeons
Compete based on product innovations, customer service, cost
Q1: What are the problems?
Shortage of new products introduction cause unbalanced supply and demand
The accumulation of back order increase
Increasing of lead time
Cause poor delivery service
Thus, creates customer dissatisfaction
Demand Pattern of New Product
Q2: What cause the problem?
Have poor information system management.
The data collection is not aligned within different areas of organization. Lack of efficiency in the method used for data tracking of previously forecasted months. So they cannot check the possibility of “panic ordering” No system developed to track incoming demand, inventory & production rates
Incorrect method in manufacturing strategies
Forecasting problems on the demand of old and new products
No specific person in charged on demand and forecast error
Their current policy of 3 weeks demand safety stock is not relevant with old products due to continuously new product introductions
Prioritizing their sales strategies in developing new products while neglecting customer satisfaction (not their priority)
Q3: Why Customer Service Manager is the first one to address the issues?
Service deals with EVERYTHING from customer complains to establishing strategies to improve delivery service.
Works with dealers/ affiliates to keep them updated on delivery schedule and problems.
As the person in charged, Dan Franklin will also be contacted directly by customers when there are questions regarding order and problems like delays in product delivery.
Q4: How to fix the problems?
Renewal of information database system
Synchronize information system in all areas of organizations so that the data can be track easily.
Improve the production plan of the products to synchronize with the customer orders.
Keep a systematic product inventory to handle existing and new orders
Increase forecast accuracy of old and new products
Develop relevant new policy regarding their safety stock