Shouldice Case Final

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Operations Management Case 1: Shouldice Hospital Limited Submitted to Prof. Janat Shah Indian Institute of Management Bangalore By: Group Number 13 Arun Singh Mohan Lal Mahesh S Rajkamal Narasimhan 0511153 0511171 0411106 0411114 Group 13 Indian Institute of management, Bangalore Page 1 of 12 Situation Analysis Group 13 Indian Institute of management, Bangalore Page 2 of 12 The Shouldice center employs its own technique, called the Shouldice method for repair of hernias. Only externa
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  Operations Management Case 1:Shouldice Hospital Limited Submitted to Prof. Janat ShahIndian Institute of Management BangaloreBy:Group Number 13 Arun Singh 0511153Mohan Lal 0511171Mahesh S 0411106Rajkamal Narasimhan 0411114 Group 13 Indian Institute of management, Bangalore Page 1 of 12  Situation Analysis Group 13 Indian Institute of management, Bangalore Page 2 of 12  The Shouldice center employs its own technique, called the Shouldice method for repair of hernias. Only external types of hernias are treated. Approximately 82% of surgeriesare primaries, requiring 45 minutes. The rest 18% involve recurrence of hernias repairedelsewhere. These are more complex, requiring 90 minutes. Due to the efficacy of theShouldice method, recurrence rate for all operations at Shouldice is 0.8%, compared to10% in the Unites States. Moreover, the Shouldice method allows immediate patientambulation and rapid recovery. Most patients are ready for discharge by the fourthmorning.The Hospital has a capacity of 89 beds. There are 5 operating rooms where 33 to 36operations are performed on an average day. No operations are performed over theweekend.The Hospital employs 12 full-time surgeons, 7 part-time assistant surgeons, and oneanesthetist. The nursing staff consists of 22 full-time and 18 part-time members. Anoperating team consists of a Surgeon, an assistant surgeon, a scrub nurse, and acirculating nurse. A surgeon’s typical day begins at 7:30 A.M. and ends by 4:00 P.M.Each surgeon typically performs 3 to 4 operations each day.Training of a new surgeon in the Shouldice technique is important because the procedurecannot be varied. There is time-based rotation of teams and frequent consultations amongdoctors.A patient at Shouldice requires minimal post-operative care. Patients are encouraged tomove about and carry on their day-to-day activities with minimal physical assistance.This allows Shouldice to operate with a much lower nurse-to-patient ratio than a typicalhospital.Employees at the Shouldice have very competitive pay scales. The remuneration has bothfixed and bonus components. There is no organization chart, and administrative Group 13 Indian Institute of management, Bangalore Page 3 of 12  employees are cross-trained to take over each other’s work if required. Nobody is fired.As a result, turnover is low.The hospital relies entirely on word-of-mouth advertising. The center performs 145-165operations per week. In spite of this, there is a backlog of scheduled operations that is aslarge as 1200 in 1982.Approximately 42% of patients come from the United States. A typical surgery at theShouldice costs approximately $1029. Operating Costs for the hospital and clinic areclose to a total of $4.8 million. Revenues are close to $6.8 million. Thus, operating profits are close to $2 million annually. The Shouldice Hospital is a successful organization and admired by most of the peoplewho had relation with it or who have heard of it. However, due to its unique surgerymethod, although without mass advertisement, the operating capacity is close to %100.Thus, they have a fear of not meeting the demand in the future. Moreover, some of thehospitals and surgeons take benefit of the Shouldice method in their advertisementalthough they hardly perform it perfectly. This leads the hospital to become notorious.To sum up, they have problems in meeting demand and abuse of the method, which isunique to them, and have expending business opportunities while keeping the qualitylevel. Group 13 Indian Institute of management, Bangalore Page 4 of 12
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