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We’ve Got Rhythm! Medtronic Corporation

Medtronic Corporation

Medtronic was founded in 1957 in Minneapolis.

Cardiac Pacemaker – major invention Pacemakers for 2 disorders:

Bradycardia- For not enough pulses Tachycardia- For too many pulses

WHY they LOST RHYTHM ??

Key Issues Faced by Medtronic

Lack of coordination within functional unitsEvery idea generated was put into action

even before completing the previous project.

No project got focus and attention needed to get it done right

Marketing and Production were out of sync.Competitors introduced new improvementsLengthy product development cycle

Key Issues Faced by Medtronic

2 major product recalls related to quality problems

Employee attrition – they develop pacemaker product ideas in new start ups .

Market share dropped from 70% in 1970 to 29% in 1986

Breakthrough for Medtronic

“Rate responsive” pacemaker – Activitrax

How it become success??

Single chamber design was easy to be implanted Good response from the users Serious product recall by a competitor

How they GOT BACK RHYTHM??

Processes Introduced by Stevens

SpeedPlatform StrategyProject DocumentationPhase DefinitionRhythmMarket Inputs

Speed

Formulated well-defined strategy

Assessment of environment and technology

To define the business objectives To estimate the financial and competitive

contributions of the new product

Platform Strategy

Ideas from disparate parts being funded independently

Not enhancing any product with derivative – lack of effective product line

For overcoming this product planning team

First Element

1) Initial product – Top end model

Derivatives – models with lesser features

Second Element

Perfected the design and implementation in single chamber platform The features were enhanced for dual chamber platform Clearly defined the product line and target market

Simple devices for the low end of the market and high performance fully featured models at the high end. Leadership role in higher end of market via

functionality and features Strengthened the position in lower end with low priced

products

Third Element

Changed the way platform has been designedPhysical architecture Hybrid circuit

Latest tech could be incorporated in hybrid circuits MicroRel Outsource only those parts that are standardized

Decision making by project managers instead of functional heads.

Project Documentation

Lack of synchronization between marketing and production dept

How the problem was solved. ??

Two Documents need to be prepared

1. Product Description Marketing 2. Product Specification Engineering

Product Description Customer Requirements Product Definition Performance Expectations of the product To be signed off by engineering

Product Specification Technical and Cost specifications To be signed off by marketing

Phase Definition

Business Analysis Phase Product description is written and financial benefits is

estimatedDemonstration Phase

Technological feasibility of the project is estimated Rapid prot0typing is emphasized

Commitment Review Review of technological potential, competitive activity,

profits and ROICommitment/Development Phase

Rhythm

Scheduled a date each month for phase review

Prepared a schedule on new product launches Structured the way new ideas were being handled

Market Inputs

For getting inputs from customers

Physician review board. Physician Inputs on performance of

existing models Suggestions on new features Review boards will meet twice every year

PROCESS OUTCOME

RESULTS

Market share increased from 29% in 1986 to 51% in 1996.

Time required to develop new platform products was reduced by 75 %

Become Market leaders in every segment of the market.

FUTURE CHALLENGES

Challenges in Future

How to satisfy the already satisfied customer? Figure out how to add values in different

waysNeed to define the product generationsPrice of the pacemaker need to be reduced

significantlyReaching less developed regions

Require advanced technology and enormous efforts from physician

Increasing the reach of dual chamber platforms from 50% to 70%

Work closely with customers :- patients, surgeons, hospital management and buying groups

Learning’s

How a new management team at Medtronic's Cardiac Pacemaker business reversed a steep decline in market share .

By 1) Clarifying current strategy2) By proper project planning 3) Better Customer understanding