Supply Chain Partners: Virginia Mason and Owens & Minor (A) Case Solution & Answer

Supply Chain Partners: Virginia Mason and Owens & Minor (A)


There are different types of risks associated with the inventory, these risks include;

  • Inaccurate Forecasting– It is very important to forecast the accuracy of the products and measurements required by the customers. This can be done through proper and effective searching and inventory control software.
  • Temperamental Providers– Another risk associated with inventory includes the supplier and management relationships. It is very important for the company to establish good supplier relationship in order to minimize the risk.
  • Product-Shelf Life– Product shelf life also plays an important role in inventory system. The shorter the product shelf life, the higher the risk. In order to minimize the risk, it is important for the stock observing and turn assists with clearing more seasoned stock before it terminates and should spot checks frequently.
  • Damage– Damage in products can lead the products to waste thereby increasing the business costs, this is another major issue generated by the inventory measurement.
  • Product Life-Cycle-It includes the different market phases of product such as arrival, growth, decline etc. Retailers should stay informed concerning market patterns to guarantee they are not over-requesting stock in its decay or withdrawal stage.

Mitigation of Inventory Risks

In order to mitigate the inventory risks, it is very important to keeping up with the stock by using different cloud software’s and inventory tools. This will help to ensure the real-time monitoring information of the inventory and helps to forecast the accurate results in order to manage stock.


The extension of VM into VMPS, the profound social roots, great instruments and upgrades in inventory network, the improvement in process methodology, consumer loyalty, headway innovation and execution upgrade the worth of the VM. Moreover, the hard work of the employees and efficient management techniques can thereby increase the value of VM and their financial metrics in the most significant way.


The “Group purchasing Organization” and “Healthcare Network Entity” is important factor in the distribution network. It is quite impractical for the organization to purchase the good directly from the manufacturers because of their extreme work load burden of their own and market reputation. The organizations have the other responsibilities to look after due to this reason, Emergency clinic particularly in the US are contracted with the GPO which charged the participation expense and convey things at a decent cost or for a cent age (typically somewhere in the range of 5% and 7%) of the unit cost (known as “cost-in addition to”). GPO have the extreme knowledge to negotiate and are liable to provide the quality products to the organizations, thereby connected to the manufacturers directly.


Group Purchasing Organization

A “Group Purchasing Organization” (GPO) is a substance that is utilized to help the medical services suppliers by accumulating the buying volumes and serves to limits with wholesalers and different merchants. Moreover, GPO can help haggling with the costs of items and administrations, for example, clinical gadgets, drugs and different items for the sake of the medical services firms. It declines suppliers’ absolute buying costs; and, specifically, decline the all-out buying cost for little suppliers.


By analyzing the different models, it has been concluded that the” cost plus model” doesn’t consider different factors however the TSCC model does. For example, the expense in addition to display doesn’t make into an account the move by different players in the business and it doesn’t flourish for the ID and expulsion of imperfections. While, the TSCC model remembers the contenders’ activities and helps the organization for deciding and settling the expense failures. Definitively. The TSCC strategy seems, by all accounts, to be a superior estimating model as it decreases the waste and cost levels of the organization. But the main problem that arises is the complexity of the TSCC model that force the VM to switch into an alpha program.


The difference of opinion and mindsets techniques regarding the supply chain has caused the huge gap between the VM and O&M. Both of the parties have different directories regarding the supply chain model which created a kind of gap between them. In order to avoid such situation, it is suggested for them to come into the final common verdict by analyzing the factors and the significance of the both of the models and continue sustaining the growth of the organization.


TSCC Model

The TSCC model is outright a movement-based model which allocates the stock dealing with by expanding the benefit of O&M’s. To persuade the VM to execute TSCC model, it is critical to feature every one of the huge benefits that TSCC gives, for example, the organization’s senior administration accepts that the TSCC is a more financially savvy model, which would smooth out the organization’s circulation exercises, straightforwardly affecting the expense. The management believes that the model helps the company to identify all the problematic areas that sheds the company’s value. It also helps the company to sustain efficiency and organizational benefits.

Challenges of TSCC Model

The challenges that lead to VM in applying the TSCC model includes;

  • Firstly, the TSCC model is quite complicated which requires the proper training requirements and usage techniques.
  • The model leads to higher level of chances as compared to the other one.
  • It involves a cost estimation through drivers which increases the probability of errors…..

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