Shouldice Hospital Limited Abridged

3/26/2013 ShouldiceHospital check (Abridged) Summaryofcasediscussion Indicatorsofsuccess Profits Revenue=7600*(320*4+650+300*20%)=$15mil. Costs=$8. 5milforinfirmary+$3. 5forclinic $ $ Profits=$3mil Word? of? mouth publicise Afraidofadvertisingforfearofgeneratingtoomuch expect reserveof aim Currently2400,growingat100/6mo. toweringpercentageofdoctorsaspatients L bustedrecurrence 0. 8%vs. 10%atotherhospitals Patientsreunions Lowemployeeturnover 2 1 3/26/2013 qualificationatkeyresources Examination 6 livex3patients/hrx3hrs/day(1? 4pm)x5 eld/wk=270 patients/wk Operatingrooms 5roomsx7hrs/dayx5days/wkx1patient/(hr. room)=175 patients/wk Surgeons 10surgeonsx1patient/(hr. surgeon)x8hrs/dayx5days/wk= 400patients/wk Rooms Assumepatientsstayfor4nights,andleveldemand Numberofpatientsperday(Sun Thur)=89rooms/4=22 Capacity=5days/wkx22/day=110patients/wk Roomsisthebottleneck. So then capacityexpansion,ifany,shouldstartwiththisresource.Noticethatthisprocessingratedoesnotaddu pto7600patientsperyearthatShouldiceis handling. Possiblereasonspatientsstayforfewernights,ortheyadmit more(prenominal)patientstoward theendofweek,orthereisanoverflowareainthehospital. 3 WhypatientslikeShouldice? Lowprice $1990(excludingtravel)vs. $5240atotherhospitals Lowrecurrencerate Facilities/decor devotementsmadeinassetssuchas rug,commonareas(the Floridaroome. g. ),lowstairs,nicegrounds. Socialization/ambiance munimentpatientswithsimilarbackgroundsinthe equivalentroom Groupactivities(e. g. ,teaandcookies)to salveanxietyandbuild p relationships Createpleasant,non? hospital? like automated teller machine Fast recuperation Daysvs. weeksatotherhospitals Earlyambulation(confidence, checkupbenefits) 4 2 3/26/2013 WhyemployeeslikeShouldice? Doctors stiffhours,oncallbutrarelycalled g , y commoditypay Lowrisksurgery,opportunitytobethebestinclass Nurses Minimalphysicalassistance Counselingactivities,insteadof changingbedpans Staff Crosstraining,helpingeachother In teractions(e. g. ,indineroom) Strongconcernforemployees,nobodyisfired 5 Thefocused pulverisationmodel Anarrow marketsegment(asimple graphic symbolofherniarepair),ensuredbya carefulscreeningprocess An ripe procedure that emphasizes early ambulation which leads to Aninnovativeprocedurethatemphasizesearlyambulationwhichleadsto quickrecovery Standardizedprocedure,nottobevaried Patientsarebasicallywell,allowingdemandtobeinventoried(and consequently easyscheduling) Family? tylemanagementallowsahighly specialiseworkforceto decompress,leadingtohappyemployeeswithlowturnover Lowinvestmentsbysharingresources(e. g. ,anesthetists,nurses) Help patients help themselves (e g tea and cookies to mix pre? artist Helppatientshelpthemselves(e. g. ,teaandcookiestomixpre? intelligence officer patientswithpost? operativepatients) AttentiontodetailsnoTVinroomcarpetinglow? risestairsforeasy walkingwalkfromthe runtablegardensgoodfood,etc. 3 3/26/2013 Optionsforcapacityexpansion Saturdayoperations Prosnoinvestment Consinterfereswithregularworkschedules Investtobuildmorerooms Proskeepregularworkschedules Cons dangerousutilizationofotherresources otherhospital Prosthereisamarket(1millionherniaoperationsayear ( p y intheU. S. ),savetravelcostsforpatients ConsQualitycontrol? Sourcesofdoctors. Anotherprocedure What? Expertise? Markets? Toomanyquestions.Moststudentschoseeitherthesecondorthethirdoptions. 7 Keylearningpoints Thefocusedfactory come nearleadstomore addedvalue(andthushighercompetitive added value (and thus higher competitive advantage)itincreasesthecustomers willingness? to? payandlowersthecost,atthe sametime. Thedevilisinthedetailsmanyoperational details,althoughseemingly fleckandminute, playanimportantroleinshapingstrategic decisions(suchascapacityexpansionhere). 8 4