Hospital Equipment Corporation

GROUP 56
Vineet Pandey, Kalpana Kaushal, Manas Ranjan Padhi , Rajeshwari Shaw
 Hospital Equipment Corporation
1. Supply chain for the case

Hospital,
HEC Nursing
homes

Workflow in HEC

Field
Executive evaluation
Prototype review
Modelling
Design
Product
Product concept
idea
2. What was growth rate for HEC in last 10 years (hint: calculation) and how
did HEC achieve it (minimum 3 points)?

Growth rate for HEC between 1980 and 1990

(170-50)/(50*10) =0.24 i.e. the sales of HEC grew by 24% CAGR in last 10 years.
HEC’s growth was a result of : -
Strategy: HECs strategy to reduce its commitment to nursing home bed market and
focus on selling specialized beds for acute care hospitals was a major step. In doing so
HEC became the market leader with a market share of 90%.
Market Research: HEC’s market research team worked closely with nurses to
understand how they cared for patients. This provided HEC with ideas of improving
offerings and aligning them more to the needs of hospitals. HEC offered to serve as a
partner to hospitals by offering them with options to improve and manage existing
health-care capabilities.
New Product Development: HEC employed two rounds of prototype testing by
hospitals, wherein the feedback from the first round would be incorporated into the
designs before round two. Through this process, the firm managed to pre-emptively
resolve the minor issues that might have been overlooked by the company’s design
department.

3. How collecting and organizing information evolved over a time in HEC?

When the company exit from nursing home bed business and expanded its position in
the hospital segment HEC contacted every acute care hospital in the U.S. which had
more than 200 beds and got the knowledge of their existing bed inventory, age and
condition, and anticipated replacement plans.
Research was formed into a separate function and research’s role was to know the
customers need better than themselves.
 Information was also collected by identifying customer needs at 3 levels- first line of
customer contact was the sales force, second line of customer was provided by HEC’s
customer service group and third was marketing product managers.
Also market research found how hospitals made money and understood that more
deeply than hospitals themselves.
In addition market research collected and organized all the information about HEC’s
product and customers’ needs that flowed to the company.
After failure of memo system product management teams were made to collect inputs
from people in functional organization and this worked well.
Product development also helped to give insights such as that the nurses did work that
had little to do with medical needs and that patients tilted the head of their beds up and
the bed moved away from the wall.
New product ideas also came from engineering groups such as over bed table.
The product design engineering group was responsible for the design of all the new
products and engineering changes to the existing products.

4. How was new product decision-making facilitated in HEC?

The new product decision making is as depicted above in the flow chart. Market
research was reported to Tricia Wudel, the VC of marketing who in turn approached
Eliot, VC engineering, with product idea and together they come up with product
concept. Anderson gave responsibility to Eric who managed product design engineering.
Field evaluation is arranged by Wudel and he was involved heavily in the field testing
efforts. Under the direction of manufacturing VC, Richardson, the engineering gave
inputs on manufacturing issues starting with first prototyping cycle. Thus these 3
people, Wudel, Anderson and Richardson were involved completely in the new product
development task force along with Matt steele, VC Planning and Business development.
 Market Product
Product idea Product design
opportunity concept

Field Executive
Prototype Mock products
evalutaion review

Product
Revised
Feedback Broader trial improvement
prototype
on trials

Finalized
product