Owens & Minor’s Case Essay

What is the value-added by Owens and Minor? Is this value-addition visible? They own and manage the inventory for the manufacture.  They take on the financial risk associated with the function of managing the inventory flow to the hospitals. They care for product returns and carry the risk for that.  They carry the receivables (cash flow issues due to long payment terms of customers; actually a 90 days credit) They carry and manage most of the inventory for the hospitals, which are sometimes even running stockless. They track and verify customer prices for contracted product purchases and monitor agreements between end-users and manufacturers The distribution has changed in a way that hospitals required the distributors to carry more of the inventory and making more deliveries in lower units of measure, while keeping the same originally negotiated prices. This has put a stronger burden on the distributors. Owens & Minor creates a clear value-add for both manufacturers and suppliers. Manufactures usually only want to produce and sell the product before getting it out of the door Hence Owens and Minor takes the full responsibility for all stressful parts of selling a product. On the other hand customers don’t want to buy and own products before they are ready to use it. Thus Owens and Minor also enables them to achieving more efficient structures, while reducing additional costs related to managing efficiently. 2. Evaluate the impact cost-plus pricing has on distributors, customers, and suppliers. Suppliers: Suppliers have no motivation to try to reduce costs and increase efficiencies since profits remain the same. Market demand is not taken into consideration. If a supplier has a markup, which takes the reseller’s price point beyond current market prices, the reseller’s demand will decrease dramatically. Distributors: Services related to inventory management are not included properly, since the percentage they gain is the same for all products. Whether they are cheap and efficiently to handle or rather problematic. Hence costs will skyrocket if customers will ask for additional services (while keeping the same price). They have the drawback of customers engaging in cherry-picking  and only enabling the distributors to manage low-margin, inexpensive products. Customers: Cost-plus pricing lead to a complicated pricing structures, since distributors and customers negotiated separate product prices from manufacturers, introduced incentives, let prices vary from customer to customer, covered some products by contract and some don’t etc. Hence purchasing managers were nearly unable to properly track actual product costs and compare quotes from competing manufacturers and distributors. 3. What effect will ABP have on customer behavior? Provide an example to illustrate. ABP connects O&M‘s fee to the level of the service they provide: Customer is motivated to keep its activities down to a minimum level and only order services that he really needs ­ ABP helps customers to optimize their service-level and hence their costs. Customers who want to extend their service-level can get this because there is a way for O&M to price a higher service-level  ­ They came up with a relatively simple matrix based on two major cost drivers—number of purchase orders per month and number of lines per purchase order. The number of orders was tied to our fixed administrative fees and the number of lines was tied to our variable costs—the number of times a worker had to go to a product rack, etc. It was a very primitive way to identify our fixed and variable costs, but it was effective in showing the customer that they could lower costs. They wanted to show the customer that instead of being locked-in to a traditional cost-plus contract, they could actually affect their service delivery fee depending on the type and amount of service requested, and the frequency and size of each request. In order for the customer to look at ABP as an honest way to do business, we had to share our numbers with them; otherwise they would have viewed it as just another pricing scheme. 4. What are the obstacles to successful implementation of ABP at Ideal? How would you address these obstacles?  ­ Internal systems at hospitals (e.g. budgeting, compensation) were tied to  cost-plus percentages.  ­Product prices with cost-plus percentages were used to determine transfer pricing between hospital departments  ­Technological barriers: Customer has to change to an EDI system (electronical data input) Hospital would have to change its systems and procedures for material handling ­ For a hospital to benefit it would have to be willing to change and shed personnel, equipment and warehousing space.  ­Culture of hospitals (e.g. surgeons have different preferences for many operating room supplies) O&M should address these obstacles with the following:  ­Offering to convert the activity fee to a cost-plus equivalent  ­O&M‘s logistical services should work closely with customers moving to ABP to help them realign processes and institute cost savings.

Termination Essay Example | Topics and Well Written Essays - 750 words

Termination - Essay Example In such instances, it generally becomes necessary for the organization to consider terminating the employee. Termination should be considered as the most severe form of punishment that an organization can possibly impose on an employee and as such, it should be the most carefully considered form of disciplinary action. The experience of going through a job termination is considered to be traumatic for all of an organization’s employees. Of note is that the termination of employees at different levels or positions within the same organization varies considerably; Unlike the employees working in the lower level positions of the organizations, an organization’s executives and CEOs often do not have to worry about the probability of their positions being eventually eliminated. The main worry that individuals at this level often have is that of ensuring that they constantly try and please the organization’s board of directors because it is these boards that are tasked with the responsibility of firing and hiring of these executives. Most of the time, the board of directors only undertakes the rather drastic action of firing an executive or CEO due to a loss of confidence in the executive. This loss of confidence might be brought about by a number of factors that include a general decline in the level of productivity, the emergence of philosophical differences between the executive in question and the board of directors, economic reasons, or if there is a need to reorganize the organization. Of note however is that there are currently no formal termination appeal procedures for employees at this level (Mondy, 2013, p. 367). This group of employees is widely considered to be the most neglected and vulnerable in respect to employment termination. While an organization’s executives generally tend to have a considerable degree of clout that might aid in helping them to successfully

Impact of Internal Factors on Strategic Planning Essay

Impact of Internal Factors on Strategic Planning - Essay Example rt Macauley decided to rescue victims who survived during the crash and he started dealing with the mission of helping the victim, but he had to deal with the financial issues. The mission of starting the organization of providing disaster and other emergency relief took the stage. Therefore, with the help of Pope John Paul and financial aid from other people; the organization started operating in 1982. The mission of the organization is to restore health, save lives and offer relief services through delivering effective medicines during disaster period or any other emergence cases within America and across the globe. One of the key aspects of the AmeriCares in the internal environment is leadership aspects. Leadership is one of the effective aspects that are taken into consideration in the AmeriCares organization. The organization has varied leaders who are assigned different roles in a hierarchy manner. Marquis and Huston (2009) argue that leadership styles employed in an organization can impact organizational performance in case leaders does not take it into consideration. Different leaders employ leadership styles depending on the environment or leadership behaviors; hence, this might impact strategic planning in the organization (Harrison and Association of University Programs in Health Administration, 2010). AmeriCares  association  is  an independent and fair organization; thus, it recruits leaders with effective skills for managing the company. Thus, leadership skills, behaviors and styles employed by each leader may hinder effective decision making process; thus impacting strategic planning process. Another aspect is the organizational structure within the internal environment. The company is structured in a manner that enables leaders to make an effective decision process when handling significant issues. The flow of information is from the top management leaders to the bottom; thus, poor management and effective communication in the hierarchy may