How will General Manager Tony Gascon and his team improve the accuracy of their sales forecasts in order to reduce uncertainty for GE Healthcare’s high ticket magnetic resonance (MR) product line?
Tony Gascon, general manager for magnetic resonance (MR) value stream operations at GE Healthcare, was preparing for the monthly meeting with the supply chain and inventory management teams, during which they would revise their forecasts for the next quarter. After the meeting, aggregate production schedules based on the forecasts would be locked and pushed to the factories. As Gascon was about to head to the conference room, an e-mail with some startling information came from GE’s chief productivity officer. A corporate review revealed that the components of each MR machine traveled more than 260,000 miles before final installation. A full mapping of the supply chain exposed an elaborate logistics structure with myriad technical challenges. Due to this complexity, producing precise forecasts would be more critical than ever, since any uncertainty would be amplified. As the teams met, they explored ways to simplify the structure and reduce the number of miles each machine traveled despite production facilities on three continents, global supply sources, stringent regulatory guidelines, increased competition, and the complexity in the creation and transport of the components.
Based on their discussion, Gascon challenged the teams to improve the accuracy of their forecasts, and to better match supply with demand. What steps could they take to simplify/consolidate the logistics structure to make it more efficient? How could they leverage the emerging additive technology to disrupt the supply chain?
Case ID: 180202
Supplemental Materials: Teaching Note, Excel Spreadsheets, Solutions Spreadsheets ,
This case is used in core curriculum