Product details

Owens & Minor (O&M) performed lean inventory services for Virginia Mason (VM) as its Alpha Vendor, but the outdated industry pricing model created perverse incentives and could not capture OM's costs. Together, O&M and VM created an activity-based pricing model: Total Supply Chain Costs (TSCC), which incented both companies to be more efficient and to streamline their distribution activities. After beta testing the TSCC for one year, VM's Daniel Borunda and O&M's Michael Stefanic believed that TSCC was a better and more cost-effective pricing model, but could they convince their companies to continue to invest in TSCC?