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Case studies

When a healthcare provider was wrongly accused of breaching boundaries

Deloitte Analytics uncovered the truth inside their data

The client, a Fortune 500 company is one of the largest providers of health care products and services. Recognized for its quality of customer service and competitive prices, the company’s business groups serve more than 700,000 customers worldwide. The company operates through a centralized and automated distribution network, providing customers in more than 200 countries with a comprehensive selection of stock.

In 2009, the client was accused by one of their main manufacturers/vendors of supplying goods into mainland China, when they did not hold the rights to distribute these goods within China. The vendor presented our client with an ultimatum – find out how and where these products were entering the Chinese market, or we will cancel all trades with you. Overnight, a team of experts was assembled to get some answers.

The team, including data analytic experts, got to work analyzing and interpreting information from various sources throughout the company in an attempt to find out how these products were distributed into the Chinese market.

Abstract

While products into mainland China needed correct certification or licences, it was discovered that the products found within China had no supporting documents.

Distribution chains into and out of Hong Kong, were analyzed to find out who was selling what, and in which areas products were being sold, to try and distinguish how the products were getting into mainland China.

The challenge

There were 12 particular products to focus on which had already been found within the mainland. It was also important to establish if there were other products not yet discovered.

To begin with, all financial, account, sales, and distribution data from the company was collected in order to understand the level of sales and the distribution pipeline into various countries. The primary focus was on the Hong Kong and China markets; looking at who sells to who, what sales were made by each sales person, and who the customers were outside Hong Kong. This information pinpointed any mainland customers, and from that a process map was developed of what that type of sale looked like.

The analysis gave insight into the types of products being distributed in this area, tracing the distribution and sale of products and testing various hypotheses regarding the movement of goods into mainland China.

How analytics helped

Through the analysis, it was discovered that there were some customers who were traveling to Hong Kong, purchasing the product and bringing it back to into mainland China. These products were small and therefore easily bought and transported privately.

The analysis proved that through no overt action of the client, their product was being sold in mainland China. Although the product was infiltrating that market, the client was not the distributor. The vendor accepted this and continued to use the client as the main provider of their products through a number of countries.

The solution

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