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American Hospital Supply Corporation case study-Nishant

American Hospital Supply Corporation case study-Nishant

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Categories:Types, Business/Law
Published by: surojitsaha15094 on Feb 27, 2012
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American Hospital Supply Corporation
By: Nishant Mehta(11110)Given Information
Found in 1922, American Hospital Supply Corporation (AHSC) provided hospitals and laboratories withgeneral and specialized patient care for e.g. gloves, surgical drapes and gowns.In 1957 AHSC had begun to automate its order entry and billing procedures by installing IBM machines.In the early 60s AHSC started facing difficulties in serving large hospital customers. At this point theyintroduced a new system called Tel-American.In the early 70s Tel American had lost its sheen and was replaced by a system which consisted of aMainframe computer which was attached to Tek pro. This new system was called Analytic SystemsAutomatic Purchasing (ASAP).Slowly and steadily upgraded and enhanced versions of ASAP were introduced and first of them was theASAP 2 which allowed messages to be transferred among AHSC, the sales representatives and theCustomer. The ASAP 3 allowed the customers to enter orders using the hospitals own internal stocknumber.ASAP 4 was a computer to computer order entry system was released in 1983 and simplifiedpurchasing process by eliminating manual steps except approval. The ASAP 5 was launched as a pilotproject in 1984 and provided the capabilities to edit order files on PC rather than online.The ASAP system provided benefits to AHSC as well as to the customers.
Objectives
The objective of migrating to the Information system was based on the following points:
y
 
Automate the order entry and billing procedures so as to provide the sales reps to have moretime for selling rather than preparing the orders.
y
 
O
n time delivery of the orders.
y
 
Information system such as ASAP helped the hospitals to move towards effective materialmanagement which in turn increased the business for AHSC.
y
 
O
rdering through ASAP was easier.
y
 
ASAP helped the business to retain customers.
y
 
L
ower costs of packing and shipping.
 
 
Assumptions
y
 
ASAP was used by Hospitals and small nursing homes/alternate care sites did not utilize thebenefits provided by ASAP.
y
 
The number of alternate care sites is increasing year by year and a large portion of patients areutilizing their services.
y
 
ASAP as Information system was efficient.
Analysis
Q1
: How much competitive advantage can IT really provide?Here in this case ASAP is the application of IT which provided AHSC with the following advantagesover its competitors:
y
 
ASAP provided ease of ordering and as well as on time delivery which increased thecustomer satisfaction and thus helped AHSC to keep itself ahead of the competition.
y
 
ASAP provided the sales reps more time to focus on selling and distribution rather thandoing paperwork.
Q2:
How can company find opportunity for such uses of IT?
y
 
AHSC used the ASAP system to reduce the materials management costs of hospitals whichwas a large part of their operating expenses and thus AHSC was able to retain customerseven though their prices were 1-2% higher than the competitors.
Q3:
What can we do to make IT related competitive advantage sustainable over period of time?
y
 
We can develop the same with continues evaluation and updating the IT within theorganization
Q4:
What factors which includes Industry, technology and others made ASAP successful?ASAP slowly and steadily evolved and focused on:
y
 
uality of service
y
 
Cost Management
y
 
Materials management
y
 
Ability to reconceptualize business relationship
y
 
ASAP provide the customers with ease and more power for ordering.

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