Shouldice Hospital Case Solution. Problem Definition To increase the capacity of the hospital to cater to the ever increasing backlog of operations and at the same time maintain the quality of service delivered.

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Operations Management

Case 1:

Shouldice Hospital Limited

Submitted to

Prof. Janat Shah

Indian Institute of Management Bangalore


Group Number 13

Arun Singh                             0511153

Mohan Lal                              0511171

Mahesh S                                0411106

Rajkamal Narasimhan            0411114

Situation Analysis

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 surgeries are primaries, requiring 45 minutes. The rest 18% involve recurrence of hernias repaired elsewhere. These are more complex, requiring 90 minutes. Due to the efficacy of the Shouldice method, recurrence rate for all operations at Shouldice is 0.8%, compared to 10% in the Unites States. Moreover, the Shouldice method allows immediate patient ambulation and rapid recovery. Most patients are ready for discharge by the fourth morning.

The Hospital has a capacity of 89 beds. There are 5 operating rooms where 33 to 36 operations are performed on an average day. No operations are performed over the weekend.

The Hospital employs 12 full-time surgeons, 7 part-time assistant surgeons, and one anesthetist. The nursing staff consists of 22 full-time and 18 part-time members. An operating team consists of a Surgeon, an assistant surgeon, a scrub nurse, and a circulating 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 procedure cannot be varied. There is time-based rotation of teams and frequent consultations among doctors.

A patient at Shouldice requires minimal post-operative care. Patients are encouraged to move 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 typical hospital.

Employees at the Shouldice have very competitive pay scales. The remuneration has both fixed and bonus components. There is no organization chart, and administrative 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 145-165 operations per week. In spite of this, there is a backlog of scheduled operations that is as large as 1200 in 1982.

Approximately 42% of patients come from the United States. A typical surgery at the Shouldice costs approximately $1029. Operating Costs for the hospital and clinic are close 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 people who had relation with it or who have heard of it. However, due to its unique surgery method, 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 the hospitals and surgeons take benefit of the Shouldice method in their advertisement although 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 is unique to them, and have expending business opportunities while keeping the quality level.

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Problem Definition

To increase the capacity of the hospital to cater to the ever increasing backlog of operations and at the same time maintain the quality of service delivered.

Performance Analysis

Shouldice Hospital follows highly structured and standardized process. The benefits of this are reflected in its performance. The total time taken to discharge a patient is 4 days in any case. The initial diagnose and information is taken through a mailed questionnaire and the arrival time of the patient is fixed after that. ...

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