Shouldice Case Solution

SOLUTION 1

Operational Characteristics of Shouldice Hospital:

1. Capacity:

• A 17,000 square foot main building on a 130 acre estate, indicating an option of expansion if needed.

• Number of operations performed per year = 7722

• Number of Hernia operations performed by a doctor per year = 772 (typically 30 to 36 operations per day); industry average = 25-50 per year

• Total backlog of 2400 patients, increasing by 100 patients every 6 months.

2. Types of Operations:

Shouldice Method of Surgery: abdominal muscles arranged and repaired in three layers; this method is applicable only to External hernias. First time repairs take 45 minutes, and recurring surgeries take 90 minutes

3. Process Flow:

The hospital follows a standardization of processes, with a sequence of steps with respect to check-in of patients, right through surgery, rest and discharge.

Workforce of Shouldice Hospital:

- Doctors: 10 full-time and 8 part-time surgeons, with 2 anaesthetists. Doctors work 5 days a week till 4 PM and 1 doctor stays on call once every 10 days. The annual salary of doctors is $144,000 plus bonuses, which is 15% more than average.

- Nurses: 34 full-time nurses, out of which only 6 stay during the non-operating hours. As a result, Shouldice’s nurse-patient ratio is only 1:25, much lower than the average of 1:4.

Chief Differences between a Service and a Manufacturing organization:

Manufacturing Organisation

Service Organisation

Tangible product

Intangible service provided

Output can be stored as stock or inventory

Output is consumed immediately

Customer interaction may be low

Customer interaction is high

International markets

Local markets or international(depends)

Capital intensive facilities/machines required

Smaller facilities

Quality can be measured

Quality cannot be measured

Strictly defined roles for workers

Roles are not rigid/interchangeable

Process and Output can be standardised