Casestudy paper

Case Study: Operations Management at Shouldice Hospital Introduction Shouldice Hernia Centre is located in Ontario, Canada. Thehospital is well known for hernia operations. Shouldice hospital applies the natural tissue, tension free, method developed by Dr. Edward Shouldice (Robert & Richard, 2011). The centre is the property of Shouldice Hospital Limited. The center was illustrated as an example of business excellence, in the 1983 case study developed by Professor James Heskett, of the Harvard Business School (Bendavid, 2005). In the case study, the management of Shouldice Hospital is faced by two major capacity options: increasing the operating days of the hospital by one more day, and adding second floor so as to improve by 50% the bed capacity.
SWOT Analysis of Shouldice Hospital
The strengths, weaknesses, opportunities and strengths of Shouldice Hospital must be taken into account when considering expanding operations. The strengths of the hospital entails: effective capacity utilization, efficient process, customer satisfaction, and specialized care. The hospital has a very effective and efficient service process. This entails four processes; pre surgery, surgery, recovery and follow ups (Hauch, 2002). These processes are overseen by highly trained and competent medical personnel. The hospital also faces some weaknesses; for instance, narrow product line, number of locations, and age of certain key personnel. The hospital only offers one major medical service; this is herania operations. The hospital should make attempts at broadening the medical services offered; for instance performing other different operations and transplants. Majority of medical specialist at the center are elderly; therefore, the management must start recruiting young medical practitioners, who will receive mentorship from the older staffs (Bendavid, 2005).
There exists tremendous opportunities for expanding hospital operations. For instance, entering new locations, and ability of increasing medical service demand (Atul, 2002). The hospital should open additional branches in the entire North American region. There is a huge demand for hernia operation services in the United States and Mexico. Therefore, the hospital should plan on offering medical services in United States and Mexico.
The threats experienced by the hospital during operations are; government involvement, staff changes and inadequate capacity. The government keeps on introducing new legislations governing the health sector. Therefore, the hospital should be up to date on legislation changes. Implementing these new changes may be expensive, due to resources involved (John, 2012).
Adding Second Floor to Improve Bed Capacity
The most appropriate strategy of enhancing the capacity of the hospital; adding a second floor. This will improve the bed capacity of hospital by 50%. This approach is sustainable and cheaper in the long run. The hospital currently has an inadequate room capacity of 89. Building a second floor will assist in solving the room and bed capacity problem. This ensures that more medical operations are performed daily. After completing the second floor, the hospital will have a room and bed capacity of 133; this represents 50% increase in capacity.
The approximated budgetary value for the second floor project is $2 million. The current profit for every operation is $500. This year, the projected number of operations is 1,530. This illustrates an annual profit of $765,000 (1530*500). Increasing bed capacity increases the number of operations per year to 2,200. This represents a projected yearly profit of $1,100,000 (2200*500). The payback period of the second floor investment will be: 1.8 years (2,000,000/1,100,000). The percentage increase in profits due to this project is estimated as: 43% (335,000/765,000).
Conclusion
Because of the qualitative and quantitative data analysis illustrated in this paper, I recommend that Shouldice Hospital should invest in building the second floor at $2,000,000 million, so as to improve the capacity of room and bed space by 50%. This will ensure adequate satisfaction of medical surgery demand, and profit increase by $335,000 or 43%.
References
Atul, G. (2002). Complications: A Surgeons Notes on an Imperfect Science. New York: Picador.
Bendavid, R. (2005). Activity following herniorrhaphy. Inguinal Hernia Repair. Wantz GE. Basel, Karger.
Bendavid, R. (2005). Shouldice: A Biography. Problems in General Surgery. Philadelphia: Lippincott-Raven.
Hauch, V. (2012). “Shouldice hernia centre likely to move in four years”. The Toronto Star.
John, E. (2012). Command Performance. Boston: Harvard Business School Press.
Robert, J. and Richard, B. (2011). Operations and Supply Chain Management. Irwin: McGraw-HillI.