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American Hospital Supply Corporation- ASAP

Case study analysis

Surojit Saha_11121 1/22/2012

The Company Founded in 1922,.Company begun its business by manufacturing & selling medical supplies i.e. patient care system. Its product line included general and specialized care, including IV solutions, surgical drapes and gowns, gloves, syringes, chemical reagents and other medical items.

ASAP system The American Hospital Supply Corporation developed and used the Analytic Systems Automatic Purchasing (ASAP) technology. A leading distributor of hospital supplies to 7500 short term general hospital 13% increase in sales from 1978 to 1983 //Develops ASAP systems through 1984. //ASAP 1, (1967),uses telephone for I/O and punch cards for AHSC mainframe. It is a Transaction Processing System. The TPS handles batch orders//ASAP 2, (1970), uses teletype I/O device and prints receipts//ASAP 3, (1981), allows customers to use local stock numbers, and customized formats//ASAP 4, (1983), uses hospital computer to AHSC computer links. The customer system recommends orders. Approved orders sent to AHSC mainframe. Online editing of orders. 30 Million USD spent on development so far. Objectives: 1) 2) 3) 4) 5) 6) 7) 8) improve upon delivery cycle and time gain control over inventory system Understand the competitors well Better touch points of the customers provide customer with the ease of order placement Carefully understand the customer needs Retain customers improve on delivery period

Assumptions 1. Health organizations would continue to proliferate 2. Hospitals would enter into diversified markets, AHSC s corporate buying program was expected to play an increasingly important role 3. More attention to supplies contributing to most of the hospital cost 4. Aggregate demand for care would likely increase 5. Consumers would exert more choice Implementation 1. Acquired other distributor and manufacturers 2. Corporate agreement with large and multinational chains 3. Company expanded into the sale of prepared intravenous solutions and products and other patient care items 4. AHSC promoted its nationwide coverage, broad product line, high service level and local presence

Recommendation Q-How much competitive advantage can IT really provide? Ans: As the IT world has shown its presence in almost every field of the each Industry and this is because of its ability to improve efficiency of work & ability to reduce time and cost. Hence of course it has all capability to give a competitive advantage to a company. The subject of IT and its potential role for strategic advantage has been largely dominated by conceptual frameworks. Flawless IT services could render miracles by processing data in minimum time with more efficiency and reliability which ultimately results in the customer s satisfaction. Q-: How can company find opportunity for such uses of IT? Ans: Company can perform the internal data analysis with the data collected over the period of time. The same data could be used to predict the trend and seasonal effects in the data so that finally the conclusion could be reached. Various tools are available in IT for the analysis purpose, same could be deployed to get out the concrete results. Company can play around with IT tools if it has data in place. It can run along with the detailed feedback which would comprise of close ended questions and would provide recommendations at end of the feedback. With the right kind of question to customers for feedback purpose, with the use of the detailed data available the solutions would be written off. Lastly companies could give a thought and look at the competitors with the various strategies they are trying to implement. Same could be studied over and used by the companies in their own model. Q- What can we do to make IT related competitive advantage sustainable over period of time? Ans: Sustainable competitive advantage is unique position that organization develops in relation to the competitor that allows it to outperform them consistently. This is possible with related to IT related advantage sustainable over period of time by possessing the value creating process and position that can be easily duplicated or imitated. Sustainable competitive advantage is different from Competitive advantage as it provides long term advantage and is not easily replicable. We can develop the same with continues evaluation and updating the IT within the organization i.e by using the main frame and designing the process and flow of data more user friendly. Implementing CMS model could serve the purpose as it includes content creation; content management and content publication by implementing following in the model: User-friendly Interface Content Migration Tools Immediate Previews Workflow ; User Permission Management; Version Control & Archiving; Document Expiry Management Page Templates Publish Accessible Content Q- What factors which include Industry, technology and others made ASAP successful? Ans: ASAP was the new order system, with the main frame computer support, developed by American hospital Supply Corporation. This system was evolved with continues research over the customers need of placing the order for the medicines with a view of minimizing the labor

efforts and time to place and receive the order from AHSC. ASAP model was more user friendly with more customer involvement in placing the order. Model was full proof and technically sound that it hadn t crashed once over the life time of the same. This model was based on continues evolvement of the technical specification with ASPA1/2/3/4 being developed with taking main frame support more VIP services which included sms sender etc. This model had peculiar facility of tracking the inventory levels and automatically placing the orders which saved the man hours of hospital and even the paper work which was a big problem at big hospitals. ASAP model was very unique which was helping in the reduction of time and cost investment in placing the order and delivery of the consignment. In health care sector reliability plays a vital role and this model was meeting requirements in terms of the data transfer and the order receipt with maximum efficiency. With implementation of ASAP there was less intervention in the SCM and more focus was on the sales part. With this product there was a facility and access was given to the customer for tracking of the treatment. Q- As a competitor of American Hospital supplier in mid 1995 how would you respond to ASAP? Ans: ASAP model brought revolution in the health care industry sector. With peculiar features like maintaining inventory level, focus on customer satisfaction, with time value for money and maximum reliability, this was becoming more favorite in the industry. To beat ASAP and as a competitor I would have focused on following points related to ASAP and industry: a. More competent feedback model and appropriate analysis of the results. To concentrate on the recommendations of the customers, which would make added advantage b. Gather details of ASAP model till lower level to get a jest of how ASAP is leader in developing and maintain customers by providing more benefits to them. c. Develop and design a new model which is competent enough to stand before ASAP and which would be available to customers at cheaper rates. d. To concentrate on 4points model Cost Quality Service Speed Q- What should American Hospital do next to achieve competitive advantage through I.T? Ans: They should implement the strategies with considering the Porter s -5point model: Buyers power; Supplier power; Competitors threat; Substitutes or product; Traditional Rivals; Govt rule With the development, continues evolvement and rolling out of ASAP in hospital industry brought a new revolution in this industry whose sole purpose was customer satisfaction. Apart from the features of ASAP, American hospital could do the following to achieve the competitive advantage through 1-Reducing the cost to customer with more and additional support Developing a competent feedback model for customer and analyzing the result 2-Receiving recommendations from customers to improve on the current model. 3-It could move into preserving stock and designing competent inventory maintaining model. 4-Investing in full fledge R&D department on new technology and role out new models and implement the same on current customers. Q- As IOS evolved and develop, ASAP is an example of IOS. How do they impact different organizations they link?

Ans: ASAP is IOS providing company to company linkage between ASHC and its customers. IOS is an Internal Organization System and is different from the traditional distributed data processing technology. IOA is a system in which there is information system which works between two or more than two organization and is able to connect through the data of all the organization. Through IOA there is a single source access and control along with the central management. IOA has brought revolution in terms of distance data. Distance data results --copies of the database at different geographic location --- results into multiple data sources ---limits the in and out of the data also possess the chance of data lost or might lead to misleading data. IOA is linked to different organization like Vendors / Hospitals / Distribution Centers Different players are involved in data handling and processing of the same. DBMS at all the positions and locations are maintained at same pace on real time basis. This gets a more transparency and reliability. With use of BI analysis of can be done easily as compared and which could be helpful in understanding the current scenario and projections could be established on strong grounds. This would serve as an input for strong decision making. Q- How are AHSC and customers impacted by ASAP? Ans: ASHC is impacted with ASAP as: 1. Customers database is increased with new customers and there is strong retention of original customers 2. Database of various hospitals is maintained independently and with higher accuracy 3. Paper work flow and maintenance has been reduced and SCM being streamlined more focus was developed on sales part. 4. It gets consistent business from hospitals i.e. there is stream line flow of business coming out from different hospitals on continues basis. 5. This results into a better inventory management an optimize the supply chain management Customers Impact 1. There is ease in placing order and improved delivery measures has resulted in cutting the inventory levels 2. Tracking of orders and treatment was easy as compared 3. Accuracy and transparency in the ordering and delivery has increased the trust over AHSC 4. Reliability has improved 5. Duplication of the items and paper work is avoided which results in reduction of man hours 6. ASAP is a providing competitor to compute a linkage b/w ASHC and customers. How does it differ from traditional data processing technologies? 7. Ans: 8. It differs from traditional data processing technologies as traditional processing can not meet the challenges like volume explosion & required procedure to compete with the similar times competitors in same domain. But it was really become a different solution for the ASAP system providing competitor to compute a linkage between ASHC & customers as ASAP s technology up gradation had taken a different position.

9. ASAP system provided the key technologies for 10. Interpolation between application systems 11. Publish/Subscribe to data services 12. Locate & move data & services 13. Coordinately use many distributed resources including data, computing instruments 14. High performance processing for proper security. Q-Sales force impact? A- After implementing ASAP, the sales force of AHSC could spend more time selling the product, explaining customer product and less time in paperwork. Performance of sales force improved substantially between 1975 and 1984. Sales Processes such as off loading of order entry, order status checking and customer queries handling were optimized which led to cost & time saving. Conclusion AHSC anticipated the need of Information system for making value addition to its supply chain. It also realized that helping customer s (Hospital) to improve its business would give strategic advantage to itself. Accordingly it leveraged ASAP system which led to inventory, material optimization and automation of ordering, purchasing processes of customer.