Creating Value in a Start Up Company

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Though ABC Medical Supply is a reseller of medical equipment, both new and refurbished, it is
generally considered a service organization. The sales department provides phone and in person
consultation to patients at home, who are in need of medical devices. The department also calls on long
term care facilities routinely, to determine in existing patients are in need of further assistance from
medical devices or if new patients may need some type of equipment. In addition, ABC Medical Supply
plans to hire delivery and set up technicians, to ensure that medical equipment is functioning properly
in the home or nursing facility and that patients at home or nursing staff in the facility know how to
use the devices correctly. A focus on individualized customer service and a mission of attaining a high
level of satisfaction also make this organization a service based firm.

In order to provide the best possible service and offer each client what he or she needs, the
organization must first determine which supplies are most often needed or utilized in the home and in
long term care facilities. After research is conducted to determine which types of supplies should be
stocked, from both new manufacturers or suppliers and from medical supply auctions, products are
housed either in the main warehouse, near the corporate offices, or in a satellite location. The location
of the supplier and location of the supply auctions typically determines which location supplies are
housed in. "When stem times begin to get into the three-and-a-half-to four hour-range, drivers are
spending too much time on the road-which means they have too little time available for making actual
deliveries" (Elicker, 1998). Though Elicker's article appeared in a beverage industry publication and
appears to refer to beverage delivery, there are many advantages of using this approach for the medical
supply industry.

ABC Medical Supply plans to branch out within a tri-state region initially, then into nationwide
markets. Even within the tri-state region, drivers could spend up to 8 hours on the road. This is
counterproductive for an organization that considers faster delivery and set up times to be part of
the total customer service package. Patients may already wait for a day or two for their insurance
carriers to approve the cost of the supplies. Better service means getting insurance approval as quickly
as allowable and helping patients, particularly those at home, become more mobile and independent
as soon as possible. Shorter drive times also mean driver/technicians can deliver and set up supplies
for a larger number of patients. Efficiency is beneficial to the organization in terms of revenue, as
well as in establishing the ABC brand.

When customer service agents receive inquiries via phone or email, they respond quickly and
either handle the calls themselves or refer the patients to one of the knowledgeable sales team
members. Each customer service agent and sales team member is able to access available inventory
in each location, to determine what supplies are in stock and at what prices, according the inventory
and pricing ...