Running head: NEXUS CARDIAC PRODUCTS LTD CASE STUDY 1

Nexus Cardiac Products Ltd Case Study

Name

Institution
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Contents
Executive Summary.....................................................................................................................................3
Identified issues...........................................................................................................................................4
Short Term Issues....................................................................................................................................4
Long term issue.......................................................................................................................................5
Main Issue...............................................................................................................................................7
Root Cause Analysis....................................................................................................................................8
Alternatives and Options.............................................................................................................................9
Partnering with Venture Capital Firm......................................................................................................9
Partnering with Global Health Care Manufacturing Firm......................................................................10
Recommendations.....................................................................................................................................10
Implementation..........................................................................................................................................11
Monitoring and Control measures.............................................................................................................12
Conclusion.................................................................................................................................................13
Reference...................................................................................................................................................15
EXHIBIT and appendix.............................................................................................................................16

Executive Summary

Nexus cardiac product limited started as small branch for the biomedical engineering

research for Wilkinson University. The three professors of the university in the department
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developed a life changing machine for the control of the heartbeats. During the start-up phase of

the company, the university provided initial funding, the operational space and the business

contract. The nexus was committed to research and new inventions, as it won an awards in the

use of nanotechnology and creation of new power source. Due to major focus on the creation of

the product, the nexus was able shoot its revenue collection from $3,000,000 to $9,000,000

within one and half year. Fadi Fakhoury as chief operating office was the one responsible

development of various products at the nexus. Pacemaker was designed to treat the patient with

slow heart rhythm. The pacemaker was surgically implanted and controlled by the external

computer.

The nexus is far below the market supply of the surgical devices worldwide. The

company faced some regulation constraints when entering the market. The complexity of the

product demanded highly specialized personnel to test, use and even to bring the product to

market. The nexus had a total of 26 staff members, hence small in the market. Despite the nexus

making a profit of about 15 percent in a previous fiscal year, they still needed funding for their

expansion. The nexus central sector was the research and development. Out of the 29 staff

members of the company, 10 of them were in charge of the research and development. Company

needed scaling up their manufacturing process, thus opted outsourcing scale manufacture as it

was considered cheap. The sale team was not competent and the information technology was

required for the proper functions of the company purchasing and inventory functions. Huge

capital was needed by the nexus for expansion of its services and production

Identified issues

Short Term Issues

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Nexus Cardiac Products Ltd is a small company that is experiencing many challenges.

The owners of the nexus company need to meet some of the demands to make sure the smooth

running of the company. Despite the nexus company being able to produce the high quality

goods in terms of the technology, it is faced with many hindrances. The product produced by the

company is very complex and new to the market. The pacemaker is the new product on the

market with the distinct features (Bayon565). The feature of the pacemakers can be explained by

the ordinary scientist or the sales people, but it required the specialists who were fully aware of

the workings and components of the pacemaker. This forced professors and senior research staff

and the biomedical professors to work the extra job. They were supposed to work in the

production of the pacemaker but the situation demanded of them to come on the ground and

explain the technicalities involved in the pacemaker for its usage. Due to the incompetent sales

team, the nexus product limited could not perform well in the sales. The sales team was to be

trained on the various aspect of the product for them to be able to explain, efficiently and

effective to the physicians and doctors to buy the product.

The physical distribution of the finished product of the nexus cardiac product was major

handled by the 3PL. The 3PL is a technological system that is able maintains a very tight and

strict documentation of the product and tracking of the protocols. The system makes sure that

there is no late delivery from the supplies. Hence there was smooth production of the nexus

cardiac products, with efficiency in supply to the company. The nexus product limited did not

enjoy full benefits that come along with 3PL system since; there were some few incidents

whereby the supplier delivered the product off the schedule. This prohibited smooth operations

of the company. Through this restrict system; some of the product from suppliers from supplier

went missing, rendering the system ineffective. Some of the products were delivered damaged.
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This system needed a change to it, for the operations of the company. The company has to act

quickly in correct the damages, since the materials were very expensive and total care was to be

demanded and implemented for effective supply system.

Long term issue

Since the nexus cardiac product limited was in business of production of the medical

equipment, it faced a long term problem. The regulation in various countries demanded the

testing of every medical tool before it was declared safe for use. The more the product was

complicated the more it required the highly specialist for the testing, production and usage of the

same. The nexus cardiac product limited, they produced the complicated products to the market.

The pacemaker was surgically implanted in the patient and then programmed. The external

computer program was able to detect the whereabouts of the patient’s heart. The slow irregular

heartbeat was treated by the pacemaker while the first irregular heartbeat was treated by the

defibrillator (Monczka 39). The subcutaneous diagnostic monitoring system was developed for

the purpose of diagnosing and monitoring the heartbeats. All the products produced by the nexus

cardiac product limited, required qualified and competent specialist to operate.

The long bureaucratic procedures were imposed on the medical products. In Canada and

in North America, there was high amount of regulations on the nexus cardiac product, since the

products were rendered to be of high risk to the human being. The products were subjected to

some testing before being released to the market. This prolonged the production time of the

product. In turn the overall production scale had to be lowered down, causing the ineffective in

the running of the company. The company needed smooth and quick production of the cardiac

product and sale of the same, for its survival. This was a long term issues that the nexus cardiac

product limited had to face now and then whenever there was invention of the new product.
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Since also the nexus products were rendered risky, they had to be tested now and then before

being allowed for sale. The stringent testing and high amount of regulations on the nexus

products, affected the company negatively in venturing to new products and sales of the product.

The nexus cardiac company was majorly a product focused. Many regulations were put in

place in various countries like Canada and US, to reinforce the systems that were for health and

wellness improvement. This reinforcement was not product based, but instead they were more

concerned on how the quality of care to the patients improves. These regulations affected the

nexus cardiac limited negatively, in that they had to change all of their system to something else

that they were not able to manage. The whole of the nexus limited was like being forced out of

the market, for not changing the system of the health services and product they researched on

and produced.

The market was cost-conscious; the health manager they started to put more

consideration on the inventory management issues. The nexus had to put all of its things in

order, in ensuring the well ran and managed company resources. The manager of the nexus

cardiac company (Fakhoury), reached out to the other company for production of inner parts of

the pacemaker, but there was none that was capable of producing the pacemaker at required

affordable price. The small company that was able to produce the required standard of

pacemaker was not able to meet the timeline outlined by the nexus cardiac company. The delays

had to be countered immediately, which demanded the expansion of the clean room and more

engineers for the work. High amount of cash had to be invested in for this expansion to take

place.
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Main Issue

For every company to survive on the market had to have heavy fiscal investments. Any

company with less financial muscle was not able to survive on the market, because of the

competition that is always on the market. Many regulations are involved in when it come to the

manufacturing of the medical equipment’s, and hence more funds need to be invested in, as

suggested by Hugos. the health sector is always evolving from season to season, the research

programs of company required high investments for its running. The nexus cardiac company was

mainly faced with the financial issues. The nexus cardiac company produced the complicated

products that required, competent and qualified expertise to handle the selling and production the

same products. This demanded hiring of the engineers of higher caliber and technicians that were

able to comprehend the usage of the product and manufacturing. This required the company to

have a lot of finance to be able to manage its affair effectively.

For the nexus to meet its cost demands effectively, they needed to manufacture their

products on a large scale production. Large scale production of the pacemaker, defibrillators and

subcutaneous diagnostic monitoring system, by the nexus cardiac limited, required a significant

capital investment to the company. The nexus was not able to meet the financial demand for the

large production of it is products, hence remain small. The big company with huge financial

investments were able, to take over the market in term of research and other aspects of the

running a company. Due to financial constraints, the nexus cardiac limited was not able to

implement the necessary information technology for their operation. The implementation of the

scalable enterprise resource planning system (ERP) was rendered impossible. This was because

the company was not financial stable and ready to cater for the expenses that come along with

implementation of the system.

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The required staffs for the implementation of various technologies at nexus limited were

not present. The information and technology staffs for the implementation of enterprise resource

planning system were, not hired the reason being that the cash flow of the nexus cardiac

company, was not allowing. Due to the high cost in the health sector, there was significant

pressure on the manger of various health departments, to find less invasive techniques in

production of the health products. The company had to create products that enjoyed the economy

of scale and the products devises that were more reliable. The nexus encountered the challenges,

as all of it is products did not enjoy the economy of scale, hence they were spending more on

production, thus they could not compete effectively on market stock.

Root Cause Analysis

The main cause of the nexus stagnant growth was lack of adequate capital investment.

From the production of the pacemaker, huge investment was needed. The nexus cardiac

company required expansion, for it to be able to cater effectively for its operations. They needed

to research more so that they can come up with the new diversified products that were

competitive on market. The capital had to be invested heavily on expansion of the clean room for

large scale production of the cardiac products. Since the health sector was on the evolving path,

nexus cardiac limited required the investment in the information technology. The investments in

technology would have enabled the smooth running of the company affairs. The supply control

system was not implemented due to the lack of fund, hence resulting to the company, receiving

the delayed goods and to some extent the company received the damaged goods.

The major route cause for the stagnation of the nexus cardiac limited was lack of

competent staff. Despite the nexus cardiac company producing fascinating products to the
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market, they lacked competent sale team (Mangan 128). The products produced by the company

were complex, and in that they demanded the qualified specialist to explain all the technicalities

involved with their products to the physicians. This forced the professors and engineers that were

responsible of the production of the product to multi-task in promoting the product. This

rendered the company growth stagnant. The management also lack sales skills, hence they were

more focused on the production of the product than the sale of the product. The ineffective

management hindered growth and expansion of the company.

The many regulations imposed by government, caused low production rate of the nexus

products. The stringent and regulation testing procedure of the medical equipment’s, prolonged

the production time. This was ineffective in that the company had to invest a lot of cash in their

product, but would wait for long time for them to realize the profits or loss for their products.

Prolonged revenue from the sale of the product, hindered further ventures of the company and

thus stagnant.

Alternatives and Options

For the nexus cardiac limited to grow successfully, they needed a significant change in its

operations. They required the increase in competent staff for their operations, they needed a lot

of finance for their production, and they also needed improved information technology for the

smooth running of the business. The nexus cardiac company had two alternatives: either to

partner with venture capital firm or to partner with global health care manufacturing firm.

Partnering with Venture Capital Firm

When the nexus cardiac limited partners with the venture capital firm, they will be sure of

the huge capital investment for their production. The huge capital will enable the company to
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higher more qualified sale staff (Sodeyf 148). This promotes the sales of the company hence

expand. The huge capital will also enable the nexus cardiac company to venture more in

research, with an aim of improving and coming –up with new technological medical equipment.

The information technology system plus the information technology system personnel will be

boosted. Hence the supply and other operation of the company will be handled smoothly. The

production will be continuous despite the prolonged regulation and strict rules by the Canadian

government and the other country on the medical equipment’s. The company can be able to

diversify its productions, sales and other operation and hence growth. The only problem that

nexus may experience is that they may enjoy small profit on the product produced, since the

venture capital will claim its investment benefits.

Partnering with Global Health Care Manufacturing Firm

The nexus cardiac product limited is a competitor to the global health manufacturing

firm. When they partner, the production of high quality product of the nexus may be promoted.

There will be sharing of the resources an materials needed for the production of the various

product, and hence smooth running. The only problem that maybe encountered by the nexus is,

that there competitor may decide to scrap off their product thus killing the company.

Recommendations

It is highly recommend that the nexus cardiac product limited should accept the offer

from the venture capital firm. Since the venture capital firm has huge amount of finance, and

they are willing to invest in the nexus cardiac product company, it will be more profitable to both

companies. The nexus cardiac product company needs expansion in its entire business sector.

The hiring of the qualified staff in the sales department will be made easy because the financial
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resources will be present. The implementation of the scalable enterprise resource planning

system (ERP) for the smooth running of the business will be possible with the financial aid from

the venture capital firm.

Nexus cardiac product ltd Worldwide market

market for all cardiovascular $240 billion per year

surgical devices
cardiovascular rhythm

management devices
Annual revenue $ 9,000,000 $21 billion per year

The comparison of the $21 billion/$9,000,000 =2333.33

revenue with world market.

The nexus cardiac product company is 2333.3 times below the market order, when it

chooses to produce its cardiovascular rhythm management devise with all of its revenues. This is

a clear indication that the company needs financial back-up for survival.

Implementation

The expansion of the nexus cardiac company does not end at the recommendation stage,

but it needs the implementation process that is viable and authentic for surety of the success.

After the nexus have negotiated effectively with the venture capital firm, it is a good idea for the

management to come-up with the possible area to strengthen or the areas that need a boost.

Hiring of the competent sale personnel will form the first phase of implementation. The sale

team has to be able to explain all the technicalities involved in using new pacemaker, which is
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responsible for the irregular heartbeat. The sales team has to be trained and fully equipped by the

cardiac products. This helps the company to generate increased cash flow, hence growth of the

company. The next step will be embracing the information technology. The information

technology system is needed for the coordination of supply and demand of the cardiac products. .

Implementation of supply chain management system has to be implemented together with hiring

of more information technology staff. This ensures that the company does not receive delayed

supply or the damaged goods.

The third face is implementation of expansion on research. With the expansion of the

company premises, a larger clean room will be created and hence larger scale production of the

cardiac products for the company. With increased production and improvement in technology,

the nexus cardiac product limited is able to compete on worldwide market. The china which is

experiencing the advancement in technology is witnessing the development and thus with the

implementation of the expansion of production, the nexus will be place on a global market for

the production and sale of the medical equipment’s. The engineers for creation of the cardiac

products, will be conveniently be hired for the meeting the large production of the products.

Monitoring and Control measures

Goals Metrics Measures

Sales team Increased sales The amount of cash Sale team to equipped fully with

performance of the flow received. nexus cardiac product

pacemaker, information

defibrillator and

Subcutaneous
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diagnostic

monitoring

systems

The impact of supply chain The efficiency of Management of the inventory.

implementation management supply process

information module, to

technology improve

purchasing and

inventory control

functions

Focus on New cardiac The rate at which Incorporation of the new

research and equipment we diversify our technology in helping discover

development production and come up with new design of

the products.

Conclusion
The nexus cardiac product company, produces the fascinating products that are well

marching to the needs of the market. The North Americans people who experience the problem

with the hearth require the invention like use of pacemaker, to help them solving the hearth

rhythmic malfunctions. The worldwide market is in order of $240 billion surgical devises

produced. The company with improved technology, they are advancing the production of the

medical equipment. There is a lot of competition in the market for the companies that produces
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medical equipment’s. It is very hard for the companies to enter the market, because there are

many regulation and strict condition that have to be followed. The long procedures prolong the

production of the product to the market, hence causing inconvenience for some companies. The

nexus despite making improvement in their product, it cannot compete on the worldwide market.

The financial hindrances that are experienced by the nexus cardiac product limited, as the

major contributing factor for its stagnant growth. The company needs funding for its

advancement in research and development. The sale of the pacemaker, requires qualified

specialized in explain the technicalities involved to the potential buyer, because of its

complexity. Due to lack of finance, the nexus cannot implement the supply chain module. Hence

the company is inconvenienced when it comes to the dealing with purchasing and inventory

functions. Nexus Company partnering with financial aid organization, it will improve and

expand on the market place.

Reference

Bayon, Yves, et al. "Turning regenerative medicine breakthrough ideas and innovations into

commercial products." Tissue Engineering Part B: Reviews 21.6 (2015): 560-571.

Hugos, Michael H. Essentials of supply chain management. John Wiley & Sons, 2018.

Mangan, John, Chandra Lalwani, and Chandra L. Lalwani. Global logistics and supply chain

management. John Wiley & Sons, 2016.

NEXUS CARDIAC PRODUCTS LTD CASE STUDY 15

Monczka, Robert M., et al. Purchasing and supply chain management. Cengage Learning, 2015.

Sodeyfi, Setareh. "Review of literature on the nexus of financial leverage, product quality, &

business conditions." International Journal of Economic Perspectives 10.2 (2016): 146-

150.

EXHIBIT and appendix

Implementation timeline for 12 month

1 2 3 4 5 6 7 8 9 10 11 12

MONTHS
Hiring of the new qualified

sales personnel
Implementation of supply
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chain management

system
Research and development

Nexus Staffing

Title Number

Management & Administration 3

Manufacturing, Packaging and Shipping 6

Research & Development 10

Human Resources 1

Accounting and Finance 2

Information Technology 2

Supply Chain Management 2