O&M Case Analysis Essays
1.1) What are the services rendered by the distributor to manufacturers and hospitals?
Owens and Minor Inc. is a dominant distribution company that distributes medical and surgical supplies to hospitals, integrated health care systems and group purchasing organizations. It takes on the financial risk of owning and managing inventory for customers. It tracks and verifies their customer’s prices. In addition, O&M supplies customer usage and sales numbers, market trends, buying patterns and product penetration to manufacturers.
1.2) How has the nature of distribution changed over time?
In the mid1980s hospitals joined together to gain more control of supply costs. They began carrying less …show more content…
3) What effect will ABP have on customer behavior?
O&M hoped that by tying their distribution fees to activity levels customers would be more motivated to become more efficient and save O&M’s money in processing, delivery, and product handling. This would then weed out O&M’s unprofitable customers by aligning the fees with their services. However, most of the customers presently using costplus would have to change their internal systems to use ABP. The associated high cost might offset the distribution fees customers save from the ABP system.