Webinar Assignment 6

1. What possible gaps in the company's supply chain do you see that you would consider exploiting.
In your answer, please be thorough about all the issues you see with the company's supply chain
strategy as it stands right now.

The supply chain of the company has some clear gaps that can be exploited in order to improve
performance of the supply chain. First, it is outdated. The supply chain does not leverage any digital
technology to cut costs and increase the turn around time. There is ample scope to implement what
is called the “next-generation digital supply chain” given by McKinsey, wherein firm must “place
sensors in everything, create networks everywhere, automate anything, and analyze everything to
improve performance.”

In line with this, MTC can exploit predictive analytics and automated replenishment solutions in
addition to conventional methods like Just In Time systems to minimize the time for distribution to
hospitals. Use of robotics to handle the assembly of kits to increase the current rate of 7,200 per
week can also be introduced. Greater production could be used as a persuasive reason to convince
Hospital Value analysis teams which are key decision makers. It would also reduce input cost as well
as waiting time for surgeons who may not be comfortable with the present arrangement of sales
representatives rushing to the operating rooms at the last minute. Smart kiosks are also an excellent
modification to digitize the supply chain. Using drones to track the consignments would add another
benefit which is crucial for hospitals which need surgical equipment in critical times.

Along with this, direct distribution model through 3PL firms in collaboration with another company
manufacturing complementary items such as medicines, hospital supplies, blood banks, etc. can be
considered to increase bargaining power with hospitals to shift to the direct model. Developing an
in-house sterilization facility would save time, transportation costs and reduce safety risk.

2. Map the outbound product flow (i.e. where the product goes after it’s manufactured). Suggest
changes in the current product flow.

Unused kits returned,

Central Distribution Loaner offices/branch Operating room replenished and
Manufacturer (MTC)
Centre offices (through sales reps) shifted to another
hospital

The following changes can be incorporated in the current product flow:

1. Elimination of sales representatives from the product flow. Sales representatives would
handle the product directly at the last stage where it has been delivered to the surgeon
which would give control of the distribution to MTC.
2. Elimination of branch offices by bringing in Third Party Logistics Firms (3PL firms) would
reduce touch points, reduce lead time and transportation costs. Customer service would
also be better as the product flow is controlled entirely by MTC.
3. Eliminate the off-site sterilization centres from the product flow by developing in house
facility for sterilization.

3. How would you position MTC to be viewed as a strategic supplier for the major hospital groups?
Provide with a general overview of how you believe that key strategic suppliers should act.
The following steps could be taken by MTC to position itself as a strategic supplier for major
hospital groups.

First, create its own division which handles logistics since hospitals prefer distributors. The
control granted to MTC at all stages of the supply chain would bolster confidence in its position
as a strategic supplier which is resilient in the face of a supply chain disruption.

Second, using digital technology, automation and predictive analytics would increase confidence
in the ability of MTC to be efficient with supply, updated with their consignments and manage
their inventory well.

Third, reduced turnaround time could lead to increased production which can be a strong while
negotiating the larger, complex, long-term contracts that have become the norm.

Fourth, MTC could demonstrate loyalty to the partner hospitals that sign up with it by signing
exclusive deals with them. This would assure the hospitals about efficient and timely supply at
fixed prices.