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Management
Shouldice Hospital
Group 12
1511041 Priya Jain
1511043 Ranjot Singh
1511060 Syed Ahmer Rizvi
1511062 Tanay Gupta
1511064 Utkarsh
surgeries
performed
6
(3 hrs/room)*(60/20) = 9
5
270
7600
Operating rooms
Patients per room per day
(Morning + afternoon)
Days per week operations are done
Total patients operated per week
5
4+3 = 7
5
175
This improves to 210 in option 1 and becomes 200 in option 2 since in option 1 we
operate for 6 days instead of 5 and in option 2 we schedule operations more heavily
(8 instead of 7).
Surgeons capacity
Total surgeons
Average operations per day
Total operating days
Total patients operated per week
10
3.5
5
175
This improves to 210 in option 1 and becomes 200 in option 2 since in option 1 we
operate for 6 days instead of 5 and in option 2 we schedule operations/surgeons
more heavily (4 instead of 3.5).
Hospital bed capacity
Total beds
Average occupancy of each bed in a
week
Total patients operated per week
89
7/(4 days per patient) = 1.75
157.5
This increases to 236.25 patients /week for option 2 as number of beds increase to
133, whereas remains the same for option 1.
Units
Patients
Capacity of
Surgeons
Capacity of
operating
rooms
Capacity of
Examinations
Capacity of
Current
Process
No change
Option 1
Option 2
175 /week
Saturday
Surgeries
210/week
Get Additional
Beds
175/week
175/week
210/week
175/week
270/week
270/week
270/week
157.5/week
157.5/week
236.25/week
beds
Bed Capacity
utilization
71.43%
85.71%
71.43%
Cost($)
Revenue($)
Profit($)
Patients(throug
hput)
Throughput
(per week)
Cost($)/patient
Revenue($)/pat
ient
Profit($)/patien
t
Current
Process
No Change
(Option1)
Option 2
12,000,000
15,522,000
3522000
7600
Saturday
Surgeries
12,288,000
18626400
6338400
9360
Get Additional
Beds
16,720,000
23283000
6563000
11700
146.2
180
225
1538.46
1990
1312.82
1990
1429.06
1990
451.54
677.18
560.94
For option 3, since we do not have quantifiable data we have to work with
assumptions.
Franchise additional, off-site locations to expand operational capacity. Shouldice
should evaluate the potential to open a new facility in US as 1,000,000 hernia
operations were performed in US alone.
Since we are assuming the new facilities will be properly planned, no initial
bottlenecks will exist. However over a period of time, this might/will change.
Potential Benefits
1.
Help in rapidly expanding business at both the national and international level. Adds
to the revenue stream
2. Remove management and operational burden at main facility as patients will be
redirected to other branches.
3. Will help in neutralizing the threat to competitors trying to use the Shouldice brand
name.
Potential Problems
1. Quality of service/brand is jeopardized due to outsourcing as standardization of
procedures and techniques become difficult.
2. Current bottleneck in operations at main facility is not resolved.
Conclusion
As Dr. Shouldice, out of the 3 options we would go for option 2 as it directly
increases the capacity of the bottleneck and solves the current problem at hand.
Although option 1 increases the profits/patient more than option 2, for option 1, we
might face dissent from the doctors and the staff regarding addition of 1 extra
working day. As mentioned in the case, the doctors want to see their children
grow and will definitely object to this change. Also option 1 does not improve the
capacity of the bottleneck. Since for option 2 we do not plan to hire new doctors as
the existing doctors are expected to accommodate the additional patients, there will
be no protest from
surgeons.
Option 3 is open to debate, since the case does not provide data for analysis
regarding this particular option.
The following points need to be considered before thinking about the
implementation plan.
Finding a successor for Dr. Degani should be a priority for the Board. Dr Degani is
fast approaching retirement age and has resisted positive changes that may have
improved efficiency of operations.
Shouldice Hospital should not diversify into other specialties at this stage because
there will be higher chances of quality erosion.
Even after increasing the capacity, it is not advisable for Shouldice Hospital to
advertise. It should rely on word of mouth advertising. Providing high quality
experience to the doctors that are operated will be sufficient to get their referrals.
Appendix 1
Process Flow
Patients
Arrival at
Shouldice
(1-3 pm)
Wait +
Check +
Admin
(upto 4
Orientatio
n+
Dinner
(4:30 9
Tea and
cookies
(9 pm)
Exercise/R
ecreation
+ Dinner
(after op)
Surgery
(7:30
8:15 am)
Pre-op
Demerol
(6:45 am)
Pre-op
sedation
(5:30 am)
Recuperat
ion
Check out
Day
Clinical
Room
Day
1
Day
2
Day
4
Doctors
Scrubbing
(7:30 am)
Surgery 1
(7:30 am 8:15
am)
Surgery 2
(8:30 am 9:15
am)
Surgery 3
(9:30 am
10:15am)
Consult
(1 pm 4
pm)
Lunch
(12:30 pm 1
pm)
Surgery 4
(11 am 12:30
pm)
Coffee Break
(10:30 am
11am)
New
incoming
patients
Patients
being
operated
Patients resting
post op
Total beds used
Mon
30
Tue
30
Wed
30
Thurs
30
Fri
0
Sat
0
Sun
30
30
30
30
30
30
30
30
30
30
30
60
90
90
90
60
30
30
Mon
Tue
Wed
Thurs
Fri
Sat
Sun
30
30
30
30
30
30
30
30
30
30
30
30
Patients
resting
post op
Total beds used
30
30
30
30
30
30
60
90
90
90
90
60
60
Mon
45
Tue
45
Wed
45
Thurs
45
Fri
0
Sat
0
Sun
45
45
45
45
45
45
45
45
45
45
45
90
135
135
135
90
45
45