Virginia Mason Medical Center (VM) employed Owens & Minor (O&M) as its alpha vendor for medical/surgical supplies in 2004. By 2005, performing was O&M JIT and for services LUM VM, but they believed the pricing model in the business was obsolete. VM and O&M partnered to create the Total Supply Chain Price (TSCC) pricing program, an activity-based model that assigned all the cost drivers of distribution and inventory handling to VM, but also ensured O&M of a profit.
Since these would impact its fee, the TSCC incented VM to streamline its supply activities. After beta testing the TSCC for one year, the Daniel Borunda and O&M's Michael Stefanic considered that of VM TSCC was a better and more cost-effective pricing model, but could they convince their companies to continue to invest in TSCC?
Supply Chain Partners Virginia Mason and Owens & Minor (A) case study solution
PUBLICATION DATE: April 15, 2009 PRODUCT #: 109076-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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