Shouldice Hospital Limited Abridged

3/26/2013 ShouldiceHospitalLimited (Abridged) Summaryof graphic symboldiscussion Indicatorsofsuccess Profits Revenue=7600*(320*4+650+300*20%)=$15mil. Costs=$8. 5milforhospital+$3. 5forclinic $ $ Profits=$3mil Word? of? mouthadvertising apprehensiveofadvertisingforfearofgeneratingtoomuchdemand Backlogofdemand Currently2400,growingat100/6mo. Highpercentageofdoctorsaspatients L Lowrecurrence 0. 8%vs. 10%at other(a)hospitals Patientsreunions Lowemployeeturnover 2 1 3/26/2013 Capacityatkeyresources Examination 6waysx3patients/hrx3hrs/ daytime(1? 4pm)x5days/wk=270 patients/wk Operating inhabits 5roomsx7hrs/dayx5days/wkx1patient/(hr. room)=175 patients/wk Surgeons 10surgeonsx1patient/(hr. surgeon)x8hrs/dayx5days/wk= 400patients/wk Rooms Assumepatientsstayfor4nights,andleveldemand effectofpatientsperday(Sun Thur)=89rooms/4=22 Capacity=5days/wkx22/day=one hundred tenpatients/wk Roomsisthebottleneck. Soindeedcapacityexpansion,ifany,shouldstartwiththisresource.Noticethat thisprocessingratedoesnotaddupto7600patientsperyearthatShouldiceis handling. Possiblereasonspatientsstayforfewernights,ortheyadmitmorepatientstoward theendofweek,or at that placeisanoverflowareainthehospital. 3 WhypatientslikeShouldice? Lowprice $1990(excludingtravel)vs. $5240atotherhospitals Lowrecurrencerate Facilities/decor Investmentsmadeinassetssuchascarpeting,commonareas(the Floridaroome. g. ),lowstairs,nicegrounds. Socialization/ambiance Schedulepatientswithsimilarbackgroundsinthesameroom aggroupactivities(e. g. , tea leafandcookies)toalleviateanxietyandbuild p relationships Createpleasant,non? hospital? likeatmosphere spendthriftrecovery Daysvs. weeksatotherhospitals Earlyambulation(confidence,medicalbenefits) 4 2 3/26/2013 WhyemployeeslikeShouldice? Doctors Regularhours,oncallbutrarelycalled g , y skilfulpay Lowrisksurgery,opportunitytobethebestinclass Nurses Minimal physicalassistance Counselingactivities,insteadofchangingbedpans Staff Crosstraining,h elpingeachother Interactions(e. g. ,indiningroom) Strongconcernforemployees,nobodyisfired 5 Thefocusedfactorymodel Anarrowmarketsegment(asimpletypeofherniarepair),ensuredbya carefulexhibitprocess An innovative procedure that emphasizes early ambulation which leads to Aninnovativeprocedurethatemphasizesearlyambulationwhichleadsto quickrecovery similarprocedure,nottobevaried Patientsarebasicallywell,allowingdemandtobeinventoried(andthus easyscheduling) Family? tyle directionallowsahighlyspecializedworkforceto decompress,leadingtohappyemployeeswithlowturnover Lowinvestmentsbysharingresources(e. g. ,anesthetists,nurses) Help patients help themselves (e g tea and cookies to mix pre? operative Helppatientshelpthemselves(e. g. ,teaandcookiestomixpre? operative patientswithpost? operativepatients) AttentiontodetailsnoTVinroomcarpetinglow? risestairsforeasy walkingwalkfromtheoperatingtablegardens frankfood,etc. 3 3/26/2013 Optionsforcapacityexpansion Saturdayoperations Prosnoinv estment Consinterfereswith continualworkschedules Investtobuildmorerooms Proskeepregularworkschedules Consheavy usanceofotherresources otherhospital Prosthereisamarket(1millionherniaoperationsayear ( p y intheU. S. ),savetravelcostsforpatients ConsQualitycontrol? Sourcesofdoctors. Anotherprocedure What? Expertise? Markets? Toomanyquestions.Moststudentschoseeitherthesecondorthethirdoptions. 7 drawlearningpoints Thefocusedfactoryapproachleadstomore added hold dear(andthushighercompetitive added value (and thus higher competitive advantage)itincreasesthecustomers willingness? to? payandlowersthecost,atthe sametime. Thedevilisinthedetailsmanyoperational details,althoughseeminglyroutineandminute, playanimportantrolein regulatestrategic decisions(suchascapacityexpansionhere). 8 4