Case Introduction

Case Introduction: The case focuses on the healthcare service segment of Canada. • Initially the health care services in Canada funded and delivered through a variety of organizations such as RHAs, hospital and health clinics. The provinces held the primary responsibility for delivery of health care services, federal government maintained. • Existing model faced a major challenge in 2003 due to significant financial strain as a result of a number of factors, populations, government fiscal constraints etc. • To control the crisis and reduce the fiscal pressure faced by the government , steps were undertaken like, the closure of hospital beds. sites and consolidation of hospital operations. • Other major actions undertaken included the formation of larger group purchasing organizations and the consolidation of warehouse operations. The main objective was to reduce the cost by reworking on the contracts directly with manufacturers , bypassing distributors .

3M Canada Company • Headquartered in St. Paul, Minnesota. 3M has more than 40 business units organized into seven big businesses. • 3M healthcare division served the medical,dental, pharmaceticula , veterinarian and personal care markets. The product lines included a spectrum of items such as surgical drapes, bandages, sterlization equipment, wound care materials, castings etc. • Like all 3M businesses , the health care division drew its logical support from the company’s shared services organization. • 3M sales to hospital were cghanneled through speacialised distributors called value added resellers(VARs). • The out of hospital market comprising of 5000 organisations were served thorugh both value added resellers and professional health care dealers(PHCs) • A third party logistics company(3PL) operates 3M’S canadian distribution center in Toronto ,Ontario