Shouldice Case

1Model Shouldice Hospital as a processing operation with products, attributes and resources. 2What are its competitive priorities? 3What kind of market has it chosen to focus on? Shouldice Hospital follows the business model of focus on a single standardized service for a narrow target of consumers, rather than to provide customized solution (as in a general clinic or hospital).

It focuses on providing quick, convenient, and reliable cure for external types of abdominal hernias. The Hospital uses its own technique, called the Shouldice Method and claims to provide relatively short post-operative recovery period.

Shouldice Hospital focus on hernia repair surgery which is mostly performed on males. Shouldice operation strategy involves early ambulation following hernia repair surgery that was superior to others. Only external kind of abdominal hernias were repaired at Shouldice Hospital.

Internal types, such as hiatus (or diaphragmatic) hernias were not treated. First time repairs (primaries) of hernias involved straightforward operating procedures that required about 45 minutes. Such cases represent 82% of all operations and remaining were patients suffering recurrences of hernias previously repaired elsewhere.

The market was targeted by providing following services 1)The hospital promised early ambulation following hernia surgery. The hospital facility was designed to encourage movement without unnecessarily causing discomfort. Postoperative regimen designed and communicated by the medical team to patients 2)The Hospital provides free services to the clergy and parents of hospitalized children. Hospital provides annual checkups free of charge to its alumni mostly occurred at the time of the annual reunion. 3)The patients were attracted to the hospital by its reasonable rates compared with the total costs of operations performed elsewhere.

4How does its operations strategy support its business strategy? Shouldice Hospital had an excellent well-developed, focused service delivery system. The business strategy was to not only provide its patients with a quick, quality and low cost surgery but also providing an unforgettable experience and comfortable environment in the facility. Operations Keys for successful business strategy: Warm and friendly environment 1)Hospital is carpeted to get rid of the feel and helps in reduce disinfecting smell. The objective is to have friendly environment that will help patient recuperate faster.

2)Patients are given rooms that they share with a roommate generally from a similar professional background or shares similar hobbies. This encourages building of partnerships and sharing of medical notes. 3)Patients are encouraged to enjoy their meals in the common cafeteria, so that they get a chance to interact not only with other patients but also with other doctors. Appropriate market segment to keep cost low. 1)Healthy people who are perceived to heal and recover faster are admitted to hospital to keep the duration of the patient stays down. New patients are admitted with a higher frequency rate.

2)Hospital is a non-profit organization; cutting down on patient stays reduces costs substantially. 3)If patient is healthy enough to walk around the place, his linen need not be washed regularly (after he leaves) and he does not need bed pans ? reduces cost. Close staff and management interaction 1)Open door policy was in place for the staff. They could come in and discuss their problems ranging right from their personal problems to their official problems. This kind of close staff and management interaction helped in keeping the staff happy and feeling involved.

2)The hospital had no union and pay scale was higher than the union scale for comparable jobs in the area. There was profit sharing plan that kept all employees motivated 3)Another policy prevalent was that of job rotation in keeping the staff prepared to face crisis situations Marketing techniques 1)The hospital has build a unique selling proposition by giving good quality at a low price 2)No active advertising but only interactive marketing through word of mouth. 3)The Hospital provided free services to the clergy and parents of hospitalized children.

Hospital provided annual checkups free of charge to its alumni mostly occurred at the time of annual reunion. Expansion and competition No expansion was planned due to the fear of compromise in offered services. 5We use Shouldice as an application of the process view. Discuss its strategic fit. In the case of Shouldice Hospital, the product here is the actual surgery while the service offered is the expertise of the doctors, the dedication of the staff and the overall feel of the place that makes the patient comfortable and assists in the speedy recovery.

Process Structure

1)The input to this process flow is patient with hernia 2)The output / product from the process is the patient that undergoes actual hernia surgery with repaired hernia 3)Flow Unit : 30-36 operations are performed in the hospital with each surgeon performing 3-4 operations per day 4)Resources : 22 full-time and 18 part-time nurses; 12 full-time surgeons and 7 part-time assistant surgeon, and one anesthetist; Two basic facilities in one building ? the hospital and the clinic; 3 staff in kitchen; three housekeeping staff 5)Capital: 130-acre estate with total capacity of 89 beds.

Process Attributes 1)Cost: Operating costs estimated in 1983 budget for the hospital was $2. 8 million. Total cost of an operation to a patient with 4 days stay – $1029. 2)Flow Time: 4 days hospital stay for hernia repair surgery 3)Quality: The operation success rate was high. Process Architecture The Hospital used Job-shop process that used resources to perform many different activities. The resources were grouped (Surgeon, Nurses, administration etc. ) by their processing activities and as many as 36 operations were done by different surgeon in a day.

There was a buffer/wait time in between the different activities in the surgery. The entire process (operation) was highly structured and operation with recovery usually takes 4 days. Product (output) Attributes 1)The product is the actual surgery while the service offered is the expertise of the doctors, the dedication of the staff members and the overall feel of the place that makes the patient comfortable and assists in speedy recovery. 2)The cost of the operation to the patient was $1000 and it took 4 days for the recovery from the hernia surgery.

Product and Process Layout 1)Arrival at the clinic between 1:00 PM ? 3:00 PM the day before surgery 2)Wait time of 20 minutes prior to the patient been examined by surgeon for 15-20 minutes. 3)After examination, patient wait for another 5-15 minutes so see one of two admitting personnel. 4)Health insurance coverage checked and various details are discussed for 10 minutes. 5)Patient sent to nurse’s station for blood and urine test (5-10 minutes) with little wait. 6)At 5:00 PM, nurse orientation provided to patients.

7)Dinner server from 5:00-6:30 PM. 8)Recreation and then cookies served at 9:00 PM and tucked in bed between 9:30-10:00 PM. 9)Patient to be operated on early in the day were awakened at 5:30 AM. 10)Patients taken to pre-operating room 45 minutes prior surgery 11)A few minutes prior to first operation at 7:30 AM, the surgeon assigned to patient administer local anesthesia. 12)Arrange for the administration of Demerol to the patient scheduled next on the operating table.

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