Tom week3 mt07

Tom week3 mt07

• 1.
  Technology and Operations Management Week 3 Michaelmas term 2007
• 2.
  Course Outline  Week 1: Lessons from Mars  Week 2: Managing Quality  Week 3: Managing Front Office Operations  Week 4: Managing Back Office Operations  Week 5: Managing the Supply Chain  Week 6: Managing Innovation  Week 7: ‘Discovery’ Exercise  Week 8: Managing Projects and Programmes
• 3.
  Service in Shouldice What is the service concept of Shouldice Hospital?  What would a patient typically say about it after the experience?
• 4.
  A Stitch inTime: Shouldice Hospital
• 5.
  Evidence of successat Shouldice (1) Evidence of service success: i.e. achieving satisfaction  The reunion  The recommendation to others  The extended orderbook  The position of potential expansion  The profitability of the hospital  The value to patients  The motivation of the employees
• 6.
  Evidence of successat Shouldice (2) Evidence of profitability  For the Hospital: Revenues: 4 days x $111 x 6850 patients = $3,040,000 Costs (p.10) = $2,800,000 Profit = $ 240,000  For the Clinic: Revenues: $510 x 6850 + 20% anaesthetic ($75 x 6850) = $3,596,000 Cost (p.10) = $2,000,000 Profit = $1,596,000
• 7.
  Evidence of successat Shouldice (3) Cost to patients Shouldice Other hospitals Operating cost (p.13) $95 $2000 – 4000 Transportation 200 – 600 Time lost from work at Hospital (p.7) 5 days 10 days Time lost from work recovering 5 days 10 days Value @ 50 to 500 / day $1,600 - $6050 $2,250 - $11,500 Recurrence 0.8% 10% Weighted cost $15 – 20 $275 – $1,150 Total all costs $1,615 - $6,100 $3,025 - $12,650
• 8.
  Evidence of successat Shouldice (4) Fulfilling the service concept  What is the service concept of the hospital?  To the patient:  Peace of mind  A holiday experience  New friends – a fraternity  You are special but treatment is standard  To the employee:  A direct professional contribution  A team and a place in the team
• 9.
  Methods used atShouldice (1) Standardisation: screening of patients Participation: patients do much of the work Work environment: staff freed from usual disagreeable work Economics: sharing of expensive services Best practice: interaction of surgeons Motivation: all employees interface with the customer
• 10.
  Methods used atShouldice (2) Facilities for patients:  Avoidance of hospital atmosphere  Use of TVs, ‘phones  The Schedule and Programme (keep moving!)  Stairways  Operating rooms in semi-circle
• 11.
  Future expansion options(1)  Capacity at present: 6850 operations/50 weeks = 137 patients/week Examination Room 270 patients / week Admitting Procedure 240 patients / week Nurses’ Station 240 patients / week Operating Room 188 patients / week Doctors 178 patients / week Rooms 89 = 134 patients / week 103 = 148 patients / week  Bottleneck: number of rooms
• 12.
  Future expansion options(2)  Add a floor (45 more beds)  29% increase, $930,000/year, i.e. 45% return on investment  Add a Saturday shift  148 to 177 patients/week = $627,000 /year  Develop another facility  Replicate Shouldice on new specialty  BUT: when will service system break down?  for patients  for individual employees  for team and concept
• 13.
  Explaining success ofShouldice  Every employee has a role  Every employee interfaces with ‘customer’  Control of customer input  Necessary flexibility to keep to schedule  Small enough to work; big enough to be known
• 14.
  Summary Shouldice is aneffective integrated system Represented by the problems it does not have!! Financial Operations  Profitability  Breakdowns & absenteeism  Budget failure  Yield on resource activities  No future orderbook  Failure on customer expectation  Unexplained  Delays & unexplained bottlenecks overhead costs Marketing People  Undefined product/service  Lack of commitment  Unforecastable demand  Lack of cooperation & flexibility  Unspecified requirements  Exclusivity of customers  Interfaces between functions
• 15.
  Creating an effectiveand manageable service system  Consider the operations as a customer processing system, rather than a product processing system  Recognise the total design of the service system as the basis for inspection – not customer questionnaires (as proof of the service concept)  Separate the profitability for the customer and profitability for the provider  Value employees in terms of consistency, standards and individuality  Protect the customer from queues inside the organisation  Create an image, and experience, of the facilities as an expression of marketing statements