How can we explain the unexpected 20% decline in order volume for McKesson's medical-surgical supplies among long-term care facilities in the last 60 days?

Introduction

The unexpected 20% decline in order volume for McKesson's medical-surgical supplies among long-term care facilities in the last 60 days is a significant issue that requires immediate attention. To address this problem, I'll employ a systematic approach to identify, validate, and address the root cause while considering both short-term and long-term implications.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be seasonal factors at play. Has this decline been observed in previous years during the same period?

Why it matters: Seasonal patterns could explain the decline and inform our solution approach. Expected answer: No, this decline is unusual for this time of year. Impact on approach: If seasonal, we'd focus on adapting to cyclical demand; if not, we'd investigate other factors.

• Considering the specificity of the decline, I'm wondering about changes in our customer base. Have we seen any significant shifts in our long-term care facility client roster recently?

Why it matters: Changes in our client base could directly impact order volumes. Expected answer: No major changes in our client roster have been reported. Impact on approach: If client base is stable, we'd focus on existing customer behavior and needs.

• Given the magnitude of the decline, I'm curious about our competitors' performance. Do we have any intelligence on whether this decline is unique to McKesson or industry-wide?

Why it matters: Understanding if this is a McKesson-specific issue or an industry trend will guide our strategy. Expected answer: Preliminary data suggests this might be specific to McKesson. Impact on approach: If McKesson-specific, we'd focus on internal factors and competitive positioning.

• Considering potential system issues, I'm wondering about our order processing capabilities. Have there been any recent changes or issues with our order management system?

Why it matters: Technical issues could be causing a false decline or preventing orders from being processed. Expected answer: No significant changes or issues have been reported in our systems. Impact on approach: If systems are stable, we'd focus on other factors affecting order volume.