MTC SUPPLY CHAIN STRATEGY IN A RESTAURANT

Supply chain strategy to increase revenue

1. MTC SUPPLY CHAIN STRATEGY 2020

2. Introduction:
Name : Monika Lomash
Current Occupation : Restaurant Manager
Academic History : Bachelors in Electronics physics
Experience : 16 years
Scenario Overview: Developing efficient SCM strategy to
increase revenue by 2.3% to
compensate for the new excise duty on medical device products.

3. Objective:
1. To overcome the loss in revenue due
to implementation of new ACA medical
device excise tax
of 2.3% on the total revenue.
2. Increase the revenue to compensate
for 10% reduction in profits due to
introduction of this
tax.
3. Develop new alternatives to existing
model which will have fewer touch
points and risk

4. 1. Setting the Target:
As the 2.3% of sales taxes have been imposed and that has been translated into over
10% reduction in MTC’s profits, here is a savings of around 66 $ million. 6100 dollars
would be the target revenue so that even after tax increment they can keep the net
earnings in 800-900 dollar range. Tasks for that:
-Negotiate with the long term suppliers in a more effective way so that the
additional tax does not hamper the net profit.
-Plan and forecast well.
-Cut the cost in logistics, transportation by doing a cost-effective plan.

5. Strategy:
2. Improvement tasks in Logistics:
The first thing is the separate sterilization unit. This consumers a lot of time and
therefore, transportation from and to these unit costs, a lot of money since itis96 hours
in total. Therefore, this needs to be eliminated and sterilization must be done just after
being received at the hospital. This would significantly reduce costs and would take
much less time. Instead of having a separate distributor, they can have a sterilization
unit downstream of the supply chain and use a 3PL firm so that warehousing is possible
and products can reach as quickly as possible.
I want to change the dynamics of supply chain management by
1. Changing the sterilization mechanism.
2. Eliminating the role of 3PL from distribution and limit to transportation only.
3. I would rather make a central software in which inventory of all contracted hospitals
are synchronized and once the re-order point reaches, keeping lead-time and fill rate
order is dispatched with programmed logistics through 3 PL.

6. Strategy:
3. Improvement in Operations:
They must prefer the better service with some extra cost to saving cost with service of
Less quality. They should adopt Trunk Stock system more effectively.
There are a lot of pros and cons:
Pros:
-provide better customer service by supplying their demand more fast
-take advantage of bulk savings
-Manage how much stock you'll need
-stay on top of deliveries
Cons:
-more investment required to buy bulk inventory
-space required for products and more space equals to more cost
-inventory could become outdated

7. Planning:
Their forecasting is not updated with time-series data as my forecast. They are
forecasting their production and shipping on a constant basis through a
rough
assumption, which cannot be always true and applicable. There are two
patterns visible
in the production and shipping data and there must be two different methods
for
analyzingthem.

8. Goals of Sourcing:
Strategic relations and parameters of profit and risk can be combined with more factors
for making supply chain more dynamic. MTC can solve their sourcing problems buy
making themselves strategic suppliers for hospitals. This can be done by building a
relationship with hospitals, providing hospitals what they want. They must go to make
hospital industry as their strategic partners and must know their core competencies.
They must negotiate efficiently and must go for a win-win situation keeping the 2.3% tax
increment in mind.

9. Improvements in Sourcing:
-If MTC is to be viewed as a strategic supplier, first it must focus on offering a competitive price. It must prioritize
the most sought out products as their major
production focus and take special care of that product. -The purchasing of components could be improved.
Instead of keeping a sales representative to know the needs of surgeons, MTC should offer a platform for
procurement. They have a separate procurement department so they can specifically look into the matter of
purchasing and procurement. They can also negotiate with customers effectively.
-Create economies of scale because of volume commitments. They should also take necessary steps to ensure
the right supply at the right time.

10. Sterilization in-house and outsource:
Sterilization off-site:
1. Company can utilize the time instead that would be needed to sterilize the items.
2. They would not require any worker to perform that action.
3. By outsourcing, it can afford the action with moderate cost.
Sterilization in-house:
1. They can perform and monitor sterilization on their own.
2. Instead of leaving the work on a third party, they can handle it completely by
themselves and they can control the quality.
3. They can manage the process within a lower cost.

11. Thank You