...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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...© 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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...The Shouldice Hospital was created by Dr. Edward Earle Shouldice who is the inventor of the Shouldice method which is a hernia surgery designed to reduce recovery time and improve surgical results. The method was in response to men who couldn’t enlist in the military due to complications and it would quickly restore their physical fitness for military training. Due to high demand and scarce hospital space, Dr. Shouldice decided to open up his own hospital specializing in his unique hernia repair method. At the Shouldice hospital, only external types of hernias were performed creating a facility that offers expertise and specialization in their service. There are numerous characteristics of the Shouldice hospital that differ from most other hospitals. The most significant difference is the performance of a single operation and nothing else. This helps provide customers were assurance that they are being taken care of by knowledgeable professionals who have performed hundreds of similar operations. Not only were they getting a quality service, but a speedy recovery time helped to add value to their experience. In addition to the surgery received, the entire experience of a quick check in, a comfortable atmosphere, an opportunity to create relationships, well prepared meals, and the freedom to move around are all services which help to differentiate themselves from your typical hospital. This helps to relieve stress and anxiety many people have when getting a surgical procedure...
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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 Attributes...
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...Module 9 1. What is the market for this service? How successful is Shouldice Hospital? What makes Shouldice Hospital’s market unique is its limited to external (versus internal) abdominal hernias. Shouldice also focuses on quick recovery usually first-time repairs “primaries” are straightforward requiring 45 minutes to 90 minutes if the doctors experience a difficult hernia and within 4-days patients can resume normal activities. In addition, a high portion of their operations was on males, estimating over 1,000,000 operations in total. Although, Shouldice owes its success to word-of-mouth referrals which have increased throughout the years. Not to mention, their reasonable rates which general hospitals cannot compare. As Alan O’Dell states,...
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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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...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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...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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...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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...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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...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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...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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...Executive summary or Conclusion Shouldice Hospital was founded in 1945 by Dr. Earle Shouldice. It is a well known hospital in Ontario, Canada for its extraordinary service and care of hernia repair. The hospital is famous for lots of notable features in its service delivery system - superior surgery technique, effective recovery methods and comfortable and friendly environment with gregarious staff and service. Shouldice Hospital is a small 90-bed hospital with averaged 7,000 operations annually. However, the demand on the hernia operation is much grater than the Hospital’s current capacity. The management of Shoudice is thinking to expand the hospital’s capacity to service unmet demand. There are two expansion options to consider, one is to add Saturday to the existing five day operation’s schedule to increase capacity by 20%; another is to increase the number of beds by 50% by adding another floor of rooms to the hospital. But another opinion within the hospital is that further expansion of capacity might make it hard to maintain current high quality of service delivered. By analyzing, calculating and comparing current situation and the proposed options, the recommendations are made as below: Add Saturday operation to existing five days schedule to increase 20% capacity in the short term. This method is simple to follow and will solve the need of increasing demand with very minimal impact on current quality of service. Within in the next five years, add additional...
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...Shouldice Hospital merupakan rumah sakit yang dikhususkan untuk melayani penyakit hernia selama lebih dari setengah abad. Rumah sakit ini terletak di Toronto, Canada. Kasus tentang Shouldice Hospital sangat menarik karena sistem mereka sangat unik tidak seperti rumah sakit pada umumnya. Pekerja di rumah sakit ini, seperti perawat, dokter, housekeeping sangat terbatas jumlahnya. Hal tersebut memang sengaja dilakukan agar pasien yang setelah operasi dapat ikut terlibat dalam kegiatan di rumah sakit tersebut. Shouldice Hospital memiliki konsep sebuah rumah sakit dengan keahlian spesifik yang kompetitif sehingga biaya lebih rendah, kualitas pelayanan yang lebih tinggi bagi pasien serta gaji yang lebih baik untuk loyalitas dari karyawannya. Spesialisasi dalam hernia perut bagian eksternal, dokter Shouldice menjalankan Shouldice technique yang dikembangkan oleh pendirinya yaitu dr. Edward Earle Shouldice. Teknik yang tepat ini telah menghasilkan ambulasi dini dan tingkat keberhasilan yang lebih tinggi (lebih dari 99 %) untuk pasien Shouldice Hospital selama lebih dari 55 tahun. Namun, apa yang membuat Shouldice Hospital begitu sukses adalah karena Shouldice Hospital didirikan berdasarkan pengalaman dokter Shouldice selama menjadi dokter. Untuk menyenangkan pasien, Shouldice Hospital memiliki konsep lebih seperti country club dari pada rumah sakit: suasana yang hangat dan santai dibandingkan dengan suasana rumah sakit pada umumnya, yaitu steril, dingin, dan menakutkan. Pengalaman...
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...Introduction Capital budgeting is very important in decision making for the financial manager of any firm. Most new projects take time in developing because of the research analysis required in opening a new addition to the company. The cash flow is a huge factor in making the decision of a project. For instance, capital expenditures require firms to outlay large sums of funds to initialize the project. Second, firms will need to formulate ways of generating and repaying these funds once they are initiate. Third, there must be a good since of timing and critical finance decision to make it all happen. The importance of Capital Budgeting, Cash Flows & New Project Capital budgeting requires that any new projects become infused to save money. This can happen by retaining inventory that would lead to outflow of goods and services. Generally, when a project terminates, the working capital is recovered and there is an inflow of working capital. However, the sunk cost cash flow has already occurred which cannot be undone. Managers need to be aware of the importance of cash flow if a new project is lining up with their business. There is critical analyzing of research information to insure that the cash flow is not affected by the new project. For example, if the project is rejected would the cash flow continue to balance out? Or would the cash flow continue to balance if the project is accepted? These are some of the things that managers would have to critically decide...
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