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Getting top management support for materiel requirements planning (MRP) is not impossible. When senior management supports the effort, the success rate skyrockets and companies experience results that improve their bottom-line performance. This article describes a step-by-step process for gaining top management's commitment to the effort.
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Matrix organization can provide health care organization managers enhanced information processing, faster response times, and more flexibility to cope with greater organization complexity and rapidly changing operating environments. A review of the literature informed by work experience reveals that the use of matrix organization creates hard-to-manage ambiguity and balances of power in addition to providing positive benefits for health care organization managers. Solutions to matrix operating problems generally rely on the use of superior information and decision support systems and extensive staff training to develop attitudes and behavior consistent with the more collegial matrix organization culture. Further improvement in understanding the suitability of matrix organization for managing health care delivery organizations will involve appreciating the impact of partial implementation of matrix organization, temporary versus permanent uses of matrix organization, and the impact of the ambiguity created by dual lines of authority upon the exercise of power and authority.
The purposes of this communication are 1) to call attention to several problematic issues related to the use of transcutaneous electrical nerve stimulation for pain control and 2) to consider strategies for correcting existing problems and averting additional problems in the future. Specific problems within two general areas of difficulty are identified, and proposed solutions to these problems are presented. It is hoped that discussion of these issues will encourage comment and debate, bring about further objective and critical evaluation of the effectiveness and value of TENS for pain control, and lead to a clearer understanding of the responsibilities of manufacturers and users of this therapeutic modality.
Some assumptions of planners are no longer valid, and the tools they use to formulate strategy may need updating. The author investigates those assumptions and suggests a few techniques to supplement a planner's toolbox.
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The fastest and most effective way for a company to realize maximum profit is to get its pricing right. The right price can boost profit faster than increasing volume will; the wrong price can shrink it just as quickly. Yet many otherwise tough-minded managers miss out on significant profits because they shy away from pricing decisions for fear that they will alienate their customers. Worse, if management isn't controlling its pricing policies, there's a good chance that the company's clients are manipulating them to their own advantage. McKinsey & Company's Michael Marn and Robert Rosiello show managers how to gain control of the pricing puzzle and capture untapped profit potential by using two basic concepts: the pocket price waterfall and the pocket price band. The pocket price waterfall reveals how price erodes between a company's invoice figure and the actual amount paid by the customer--the transaction price. It tracks the volume purchase discounts, early payment bonuses, and frequent customer incentives that squeeze a company's profits. The pocket price band plots the range of pocket prices over which any given unit volume of a single product sells. Wide price bands are commonplace: some manufacturers' transaction prices for a given product range 60%; one fastener supplier's price band ranged up to 500%. Managers who study their pocket price waterfalls and bands can identify unnecessary discounting at the transaction level, low-performance accounts, and misplaced marketing efforts. The problems, once identified, are typically easy and inexpensive to remedy.
Changes too often leave us shaken, unsteady and unable to perform, yet hospital reengineering usually means major, lingering change. Systematic reengineering, properly implemented, can reduce the strain.
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This study illustrates one hospital's response to fiscal restraint. An Edmonton facility was able to reduce its budget while changing its strategic direction. During a planning process the hospital identified clinical needs that were not being met and, subsequently, reduced less utilized programs while allowing funding of new programs. This article identifies notable features of the budget reduction, provides information required to duplicate the process, and concludes with an analysis of the merits and shortcomings of such an approach.
How many top executives have ever visited with managers who move materials from the factory to the store? How many still reduce the costs of logistics to the rent of warehouses and the fees charged by common carriers? To judge by hours of senior management attention, logistics problems do not rank high. But logistics have the potential to become the next governing element of strategy. Whether they know it or not, senior managers of every retail store and diversified manufacturing company compete in logistically distinct businesses. Customer needs vary, and companies can tailor their logistics systems to serve their customers better and more profitably. Companies do not create value for customers and sustainable advantage for themselves merely by offering varieties of goods. Rather, they offer goods in distinct ways. A particular can of Coca-Cola, for example, might be a can of Coca-Cola going to a vending machine, or a can of Coca-Cola that comes with billing services. There is a fortune buried in this distinction. The goal of logistics strategy is building distinct approaches to distinct groups of customers. The first step is organizing a cross-functional team to proceed through the following steps: segmenting customers according to purchase criteria, establishing different standards of service for different customer segments, tailoring logistics pipelines to support each segment, and creating economics of scale to determine which assets can be shared among various pipelines. The goal of establishing logistically distinct businesses is familiar: improved knowledge of customers and improved means of satisfying them.
Conestoga Wood Specialties, a leader in the woodworking industry, is constantly striving for continuous improvement in manufacturing and service. Recently, the company embarked on a major MRP II education effort that served as a framework for team building. This team building concept has carried over into other aspects related to the business, such as the formalization of the sales and operations planning meeting. At Conestoga Wood, it is recognized that successful team building is necessary to achieve and maintain world-class performance.
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As health care services in general and pharmacy services specifically become more important, health care administrators may wish to consider focus strategies that include service differentiation in specific or narrow target markets. The type of strategy, whether cost, differentiation, or focus, will provide the mission and establish the organizational goals for health care providers.
This case study describes how one company involved multiple levels of all functions to develop a comprehensive strategic plan that drives the continuous improvement initiative. The process involves clearly defining a mission, assessing the current situation, developing goals designed to achieve a preferred future status, and establishing the specific tactics to move toward that preferred future. The plan then drives integrated efforts throughout the organization to help manage the business of providing the highest quality products and services to meet current and anticipated customer requirements.