...Shouldice Hospital: Operations Assessment Shouldice Hospital has been devoted to repairing hernias for over half a century. Although the Shouldice system has led to great competitive positioning, the hospital is falling victim to its own success. Demand for Shouldice services is so much higher than its current capacity of 89 beds that it is in a constant state of operations backlog, which grows by 100 patients every 6 months. Thus, Shouldice needs to find a solution to its single most critical question – how to expand the hospital’s capacity while simultaneously maintaining quality control of service delivery. The analysis below is designed to assess the current operations at the hospital, in addition to explaining our recommendation that Shouldice should invest $4MM in a new unit, which will increase bed capacity by 50% and require its surgeons to perform Saturday surgeries. As the financial analysis shows, this change will allow Shouldice to capture unmet demand without compromising its unique system of patient and employee care. Lastly, our recommendation will be also juxtaposed to other options we evaluated as potential solutions, but that neither make financial sense nor solve the current dilemma for the hospital. Hospital Overview Shouldice Hospital is a “focused factory:” a hospital with a specific area of expertise that gives it competitive strength resulting in lower cost, higher quality service for its patients, and better pay for and loyalty...
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...Question 1 Model Shouldice Hospital as a processing operation with products, attributes and resources. Model Shouldice Hospital as a Processing Operations unit can be viewed as having the following Process structure. Input: The patients entering the Clinic after getting the confirmation on the date of the operation. Output: The output in this case is the number of successfully operated patients who underwent the entire process. Flow Unit: This is one patient that go through the process. The Process starts when the patient enters the hospital and ends on the day of the discharge. We can also find that the number of inputs in the process may not be equal to or could be less than the number of output. There are patients who are sent back because of the medical complications such as overweight and if the diagnose proves to be negative. The process can be viewed in a diagram. There are waiting times in between each location. Process view of Shouldice hospital Limited Network of activities and Buffers (Patients at different departments ) (Waiting time for each) * Input Output Patients operated patients Capital and Labour Products Since the case is from a service sector the set of process outputs include tangible and intangible interpretation. The product of the service can be inferred as the number of cured patients but along with that there are some intangible aspects such as the experience of the patients in the Hospital. Service...
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...1. How successful is the Shouldice Hospital? Process: Day 1 Day 2 Day 3 Day 4 Steady state scenario Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 29 29 29 29 Table 1 Shouldice hospital is currently only focussed on hernia operations. Their USP is their focus on early ambulation. They also put more emphasis on post-operative care for 2-3 days offering accommodation. Other hospitals do not focus on early ambulation or accommodation after operation. This gives Shouldice a competitive advantage. The procedure is well defined and structured. As it is mentioned in the case, change in procedure usually requires the chief surgeon to be present to look after the proceedings. This fixed procedure ensured that the primary operations got over in 45 mins, and minimal chances of secondary operations on Shouldice operated cases. The secondary operations also take about 90 mins. The number of operations performed by a typical general surgeon is 25-30 per year whereas the surgeons at Shouldice perform 750 operations per year. They are well paid and looked after with a profit sharing plan, and this applies to even the administrative staff along with nurses and surgeons. Some features: Infrastructure - A 17,000 square foot main building on a 130 acre estate with 89 beds for patients with 7600 operations performed per year as of 2004 Theoretical...
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...Shouldice Hospital: Operations Assessment [pic] Shouldice Hospital has been devoted to repairing hernias for over half a century. Although the Shouldice system has led to great competitive positioning, the hospital is falling victim to its own success. Demand for Shouldice services is so much higher than its current capacity of 89 beds that it is in a constant state of operations backlog, which grows by 100 patients every 6 months. Thus, Shouldice needs to find a solution to its single most critical question – how to expand the hospital’s capacity while simultaneously maintaining quality control of service delivery. The analysis below is designed to assess the current operations at the hospital, in addition to explaining our recommendation that Shouldice should invest $4MM in a new unit, which will increase bed capacity by 50% and require its surgeons to perform Saturday surgeries. As the financial analysis shows, this change will allow Shouldice to capture unmet demand without compromising its unique system of patient and employee care. Lastly, our recommendation will be also juxtaposed to other options we evaluated as potential solutions, but that neither make financial sense nor solve the current dilemma for the hospital. Hospital Overview Shouldice Hospital is a “focused factory:” a hospital with a specific area of expertise that gives it competitive strength resulting in lower cost, higher quality service for its patients, and better pay for and...
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...Introduction Shouldice is a private hospital located in Toronto, and was founded by Dr. Earle Shouldice in July 1945. The hospital started out as a six-room nursing home in downtown Toronto. As demand increased for hernia operations, Dr. Shouldice expanded the facilities to a capacity of 36-beds, which turned into an 89-bed facility after the addition of a large wing. Dr. Shouldice is a famous doctor known for his private method of hernia surgery. Unlike normal methods, his way allowed the patient to be up and about right after surgery, and move freely about by the end of the day. When patient numbers increased, Dr. Shouldice decided to exploit this by opening up his own hospital. His hospital, Shouldice Hospital, specialized in external hernia cases and proved to be a big success. Dr. Shouldice died in 1965, but his hospital continued to grow, and by the end of 1982, his hospital had 6,850 operations per year. Issue Statement The Shouldice Hospital is a successful and admired organization. However, due to its unique surgery method, and without the assistance of mass advertisement, they are operating close to 100% capacity. Thus, Shouldice fears not being able to meet future demand. Moreover, “competing” hospitals and surgeons utilize and perform the Shouldice method (and advertise as such), although they often perform the method incorrectly, ultimately giving the Shouldice Hospital a bad reputation. Shouldice’s critical concerns are meeting future demand, dealing...
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...1. How successful is Shouldice? Shouldice is successful in a technical sense with its combination of low recurrence rate, low cost and short recovery time. According to www.webmd.com an inguinal hernia repair, which is the primary procedure Shouldice Hospital performs, has an average recurrence rate of 1% to 10%. The recurrence rate for hernia repairs performed at Shouldice is less than 0.5%. The average recovery time for this procedure is 1to 2 weeks for light activity and up to 4 weeks for full recovery. Shouldice patients often walk to the wheelchair from the operating table, are participating in light exercise the same day, and are back to work within 8 to 10 days. Costs for this procedure at other facilities range from $2,000 to $4,000 while Shouldice is able to perform it for under $1,000. Shouldice is also successful in providing a positive experience with nearly 80% of patients being swayed by a positive review from friends and family. 2. How does Shouldice maximize perceived customer value? Shouldice maximizes perceived customer value by providing services of quality higher than the market at a cost lower than the market in an environment that has the feel of a country club rather than a hospital. They have succeeded in instilling such camaraderie in their former patients that tickets to an annual alumni convention sell out every year. Shouldice has succeeded in wrapping their medical care within a social experience usually restricted to vacations. ...
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...Case 1: Shouldice Hospital Limited Q1: How does shouldice compete? In other words why do patients come to shouldice hospital? Two main reasons drive customers into choosing Shouldice over other competitors/hospitals. The first is quality, and the other is cost. talking about quality of the Shouldice “product” includes both, quality of the operation, and quality of post operation activities and overall services offered by Shouldice. The Shouldice method is a focused, specified operation that deals with Hernias, with a reputation that has been built throughout the years and is still growing; the hospital doesn’t even use advertisement to attract patients, the “word of mouth” way of advertisement has been doing very well for them so far. The superior quality offered by the Shouldice method, gives the patients a motive to operate at Shouldice for what it gives regarding peace of mind, low risk and low recurrence rates. Away from the in-operation excellence in quality, the services that Shouldice hospital offers are more tempting than other hospitals. Patients do not feel that they are in a hospital; they consider it more like a recovery vacation with an excused absence from work without feeling any guilt in that. Moreover, it gives patients the independence and sense of control and preserves patients’ dignity when it comes to the fast recovery after the operation, and when it comes to the fast ambulation process after the operation, where a patient rises up and walks by himself...
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...The Shouldice Method Abstract Dr. Earle Shouldice and his method of hernia operations and recovery methods are discussed. The discussion includes techniques pioneered by Dr. Shouldice, and the founding and operation of a facility bearing his name and utilizing his methods. Keywords: Earle Shouldice, Shouldice Hospital, Shouldice Method, hernia The Shouldice Method The Shouldice Hospital Limited case consists of the story of an Ontario farm boy who grew up to significantly impact the lives of thousands of hernia patients. Dr. Earle Shouldice grew up to become a prominent lecturer at the University of Toronto, ran a private medical and surgical practice, and was a successful researcher (Heskett, 2003, p. 1). He performed an appendectomy in 1932 on a seven year old girl who remained active post surgery. This led to his interest in early ambulation. Years later, Dr. Shouldice began taking a deeper look at the actions of post operative patients. Remembering the case of the seven year old girl, the doctor allowed wash room privileges to four men immediately following their surgeries (Heskett, 2003, p. 1). Ultimately, this led to Dr. Shouldice opening his own hospital facility which eventually consisted of an 89 bed capacity where he performed hernia correcting surgery using local anesthetic, encouraging comfortable movement and a specially designed post operative regimen (Heskett, 2003, p. 2). Shouldice Hospital treated only external hernias which were generally repairable...
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...Executive Summary Shouldice Hospital is the world’s leading centre of excellence in abdominal wall hernia repair . Shouldice’s reputation has been built on an exterior quality service and a high rate of successful hernia repair operation. A 99% success rate in hernia surgery has long been the benchmark for medical professionals internationally. Shouldice has averaged 7,000 operations annually, while last year it performed 7,500 operations. The patient number increased a lot in recent years. The hospital’s current capacity cannot meet extensive increased patient demand. The senior manager of the hospital needs to find the best option to expand the capacity to service unsatisfied demand while maintaining control over the high quality service delivered. Shouldice Hospital has a unique operation system to ensure its success. The notable features contributed to its service delivery system are innovative hernia repair technique; specialized program of care and recovery; and sociable atmosphere in the hospital. However, the utilization of overall capacity is not high. Current operation system does not run very efficiently. Shouldice needs to take steps to redesign its operation system to increase the capacity utilization. External analysis shows that Shouldice can use currently available high technology to further improve its operation quality. There are certain medical and health related laws to regulate hospital’s operation. In addition, Shouldice needs to commit to social responsibility...
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...Shouldice Hospital Case Assumptions 50 weeks Christmas Eve closed Resources Examination Room - 6 = 6.5*5 +4 = 36.5 Nurse Station- 2 Laboratory – 1 Maximum Bed Capacity-90 (No of days in a week=7 Available bed days =90*7 = 630) Lounge- 1 Common Dining Room -1 operating rooms -5 Recovery room-1 Surgeons (FT) – 12 =12 *35 =420 150/420 =35.7% (PT) -7 =7*17.5 =122.5 operations/surgeon =150/12 =12.5 (12 operations by 1 surgeon approx) operations/operating room = 150/5 =30 7000/50 =140/5 (days a week) = 28 | BEDS REQUIRED | CHECK-IN-DAY | MONDAY | TUESDAY | WEDNESDAY | THURSDAY | FRIDAY | SATURDAY | SUNDAY | Monday | 30 | 30 | 30 | | | | | Tuesday | | 30 | 30 | 30 | | | | Wednesday | | | 30 | 30 | 30 | | | Thursday | | | | 30 | 30 | 30 | | Friday | | | | | | | | Saturday | | | | | | | | Sunday | 30 | 30 | | | | | 30 | Total | 60 | 90 | 90 | 90 | 60 | 30 | 30 | Total =450 and 630 bed days therefore = 450/630 = 71.4 % 69.4% < 71% have to do something to the bottleneck option 1: Add one more day option 2: Increase no. of beds to 135 Option 1:...
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...Considering all the available alternatives we have, performing surgeries on Saturdays without making any other changes in the facility is the best alternative available due to the following reasons: • no fresh capital investment is required • no new construction required • revenue outweighs extra costs • quality of the service will be maintained By drilling down to numbers, there are 89 beds in total which are used for 5 days, therefore, sum of daily capacity = 89*5 = 445 and if we look at the best operating level, it is capacity maximum*7= 623 Current utilization rate is around 445/623 = 71.4% And we start performing surgeries on Saturdays too, daily capacity = 89*6 = 534 Therefore, the utilization rate will be around 534/623 = 85.7% As you can notice, there is an increase in the utilization of the current facility by almost (534-445)*100/445 = 20% at no extra costs. This increase in utilization rate does not come at the cost of some new construction but utilizing the same already available resources thereby, not adding to extra costs. As there is no fresh capital investment involved, current costs for surgeries can be maintained, hence, there is less risk of decrease in the number of the incoming patients which could have been an issue if the current costs for surgeries were increased while expanding to a new facility or in addition to a new floor. However, this increase in the utilization rate also comes at a trade off as in order to perform some surgeries...
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...de Estudio #4 Shouldice Hospital Integrantes: Ronald Batista 07-40635 Isabel Blanch 07-40657 Jocelyn Machado 08-10659 Eduardo Rocco 08-10947 Stephanie Ziritt 08-11220 Profesor: Manuel Martín Sartenejas, Febrero de 2013 1. CONTEXTO El hospital Shouldice (nombrado luego de su fundador, Earle Shouldice) es un centro clínico donde se operan únicamente hernias abdominales externas. El 82% de los procedimientos quirúrgicos que realiza el hospital son operaciones primarias (operaciones realizadas por primera vez que requieren intervenciones de 45 minutos de duración) y el 18% restante se compone de pacientes con hernias recidivantes, reparadas anteriormente en otra clínica. Earle Shouldice desarrolló una técnica quirúrgica para la operación de hernias que supera a otras técnicas en cuanto a procedimiento, anestesia necesaria, tiempo y recuperación del paciente. Esta técnica es utilizada por todos los médicos cirujanos que trabajan en la clínica, sin embargo, el método Shouldice no es un método público conocido por otros médicos fuera del hospital. El hospital se compone de 5 quirófanos, un laboratorio, sala de reanimación y un área de aprovisionamiento central donde se limpian y esterilizan los instrumentos quirúrgicos. Cuenta con oficinas de recepción y contabilidad, una gran sala de espera (con una capacidad para 50 personas), 6 salas de exploración, 3 oficinas administrativas y 89 camas para los pacientes. Actualmente, el Dr. Shouldice desea encontrar...
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...1. Problem statement With the increasing demand on Shouldice Hospital, the hospital management is looking to increase the capacity of the hospital to meet the demand without sacrificing the quality of service the hospital offers and has built up over 30 years. 2. Situation analysis Shouldice hospital is a well-known hospital for its specialization in hernia operations. Last year, Shouldice performed operations on 7500 patients. The greatly developed technique that the hospital uses and the excellent customer service that all staff members and doctors work hard to provide give the hospital a great reputation. Thisincreases demand on the hospital as its exceptional reputation increases patients’ desire to have their hernia operations performed at Shouldice hospital. As per the customer service, the patient should arrive one day before the operation and stay one day after for a total of 3 days. The first day gives the patient the opportunity to understand his or her situation by meeting with other patients and sharing their personal experiences. Inaddition, the patient pairs with another who has similar interests and hopes. As a result, the patient forgets their fear and enjoys their time. The journey does not end by leaving the hospital; Shouldice has a yearly event where all patients are invited to mingle, socialize, and see the doctors and staff. Currently the hospital has 90 beds, 12 full time surgeons, 7 part-time assistances, 5 operating rooms, a patient recovery room...
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...Case 5: Shouldice Hospital Limited (Abridged): Phần Uyên History of Shouldice Hospital: Dr. Earle Shouldice was interest in early ambulation stemmed, his medical license permitted him to operate anywhere, even on a kitchen table. As more and more patients requested operations, Dr Shouldice created new facilities by buying a rambling 130-acre estate with a 17.000-square foot main house in the Toronto suburb of Thornhill. After some years of planning, a large wing was added to provide a total capacity of 89 beds. In 1965, before Dr. Shouldices died, Shouldice Hospital Limited was formed to operate both the hospital and clinical facilities under the surgical direction of Dr. Nicolas Obney By 2004, 7.600 operations were performed per year The Shouldice Method: Only external (vs. internal) abdominal hernias were repaired at Shouldice Hospital. The most first-time repairs required 45 minutes. The recurrences and very difficult repairs required 90 minutes. The end result of Shloudice method reinforced the muscular wall of the abdomen with six rows of sutures under the skin cover They used sleeping pills, pain killer plus a local anesthetic, a injection of Novocain in the region of incision, this allowed immediate post-operative patients ambulation and facilitated rapid recovery The Patients Experiences: Approximately 10% of Shouldice patients came from outside the province of Ontario, most of these from the United States. Out-of-town patients were often diagnosed by mail...
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...© 2007-2008 Richard E Murphy Even Swaps - Shouldice Hospital 18 November 2007 1. How Successful is Shouldice Hospital? Shouldice Hospital is a highly successful business that maintains a focused service delivery system due to the success rate of its surgeries, its low employee turnover, its ability to maintain high quality standards, its ability to keep costs low and to remain profitable, and most especially the positive evaluations of its patients. Its strengths can be attributed to stringent policies of staff training in the Shouldice surgical method; the preservation of a communal atmosphere amongst both the staff and with the patients; the implementation of efficient and cost-effective facility operations; and high demand for operations. Its less successful aspects include: an inability to serve a considerable unsatisfied demand, as it is operating at near-full-capacity in its present facility; limited marketing; and an inability to prevent proliferation of its surgical techniques. 2. What Accounts for Shouldice’s Performance? a. Unique Operating Techniques Shouldice has vertically integrated nearly all operational functions in an effort to tightly control its distinctive techniques for performing hernia operations, as well as for pre- and post-operative patient care. The hospital has been remarkably successful in its ability to provide its patients with a quick, quality, low cost surgery in a comfortable environment, and has enjoyed an...
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