Shouldice Hospital

LIBIRAN. MINDANAO. TORMO.

Background
Founder: Dr. Edward Earle Shouldice graduated from the
University of Toronto in 1916.
Corporate Name: Shouldice Hospital Limited
Established: 1945
Location: The hospital was located in Toronto in the southern part
of Canada.

Specialty: Abdominal Wall Hernia Repairs

Background
Small facility (89 beds)
Built on a 130-acre estate

Hospital specializes in hernia repair surgery

Currently facilitates 7,000 surgeries per year
Effective operations with quick turn-around
Patients subject to early ambulation, which promotes healing
Friendly, social, homely and relaxing environment

Hospital only accepts patients with uncomplicated external hernias and in good health

Statement of the Problem

How does Shouldice accommodate the increasing demand of hernias (rupture) operation to
outperform the competition?

Objectives
To identify possible options on how Shouldice can utilize their service in order to increase
hospital productivity.

Target Market and Segment

Focus on a narrow segment of potential patients who have hernia
Predominantly male, older in age, essentially in good health

Target market potential: 1,000,000 operations in U.S. in 2000

Areas of Consideration/Major
Assumptions
We take the POV of Allan ODell (Hospital Managing Director) in determining the most optimal
way to increase the hospital capacity without sacrificing the quality of service they offer.

SWOT: Strengths
Good reputation of the hospital
Recommended by Shouldice previous patients

Specialize in Hernias operation

Preferred employer of nurses
Low turnover rate of doctors and employees
Specialize procedure in treating hernias
One of a kind hospital facilities
Good compensation plan to the employees
Cheaper rate compare to other hospitals

SWOT: Weaknesses
Operate only Hernias
Retirement of senior doctors specifically to Dr. Degani

Inaccessible location to the most of their patients

Emulating of competitors to the Shouldice Method

SWOT: Opportunities
Increasing demand of Hernias operation
Medical innovation in treating illnesses

SWOT: Threats
Medical innovation in treating illnesses
Government regulations to investing

Theoretical Framework
Monitoring

Change
Initiation

Optimizing

Analysis

Modeling

Theoretical Framework
MONITORING and ANALYSIS
Analyze demand patterns
Cyclical variations (employment schedules, occurrence of holidays, school hours and vacations)
Random variations (day-to-day changes in weather, accidents, natural disasters)
Market segment variations

MODELING and OPTIMIZING

Predicting the behavior of services under a given volume and variety of work

Theoretical Framework
CHANGE INITIATION
Managing capacity
Streching or shrinking capacity (using facilities for longer periods, reducing slack time)
Adjusting capacity to match demand (cross-training employees, asking customers to share, renting
extra facilities and equipments)

Managing demand (can be reshaped using marketing strategies 4Ps)

Take no action
Reduce demand
Increase demand
Inventory demand by reservation system
Inventory demand by formalized queuing

Alternative Courses of Action

1: Add Saturday operations, charge more during peak periods
Advantages

Disadvantages

No investment necessary

23 to 25 operations on Saturday

Maintain quality

6 surgeons and 1 supervising surgeon

have to work on a Saturday
Add additional personnel
Short term fix; staff are more likely to
have concerns about having regular
Saturday operations

Alternative Courses of Action

2: Add a new floor (45 more hospital beds)
Total no. of rooms: 89 + 45 = 134
Advantages

Disadvantages

Easy to control and maintain quality

Require to schedule doctors to the full

capacity of 5 days per week

Retain the culture and environment

Increase work load on admissions,

kitchen, laundry, housekeeping, and
accounting
Overwhelming meal hours for patients
(100 seat dining room)
Disturbance during construction

Alternative Courses of Action

3: Establish a new facility for hernia
Advantages

Disadvantages

New location close to the customers

Requires investment

Improve its competitive position and

increase profits

Control of quality

Operate in a less restrictive

environment

Difficult to maintain the same culture

and atmosphere

New opportunities for existing

personnel

Cannibalism, competition with the

existing facility

Transfer knowledge and expertise to

the new facilities

May potentially diminish the brand

image

Recommendation
Alternative Course of Actions 1 and 3
Start operations of Saturday, charge more during peak periods
No investment required
Can maintain quality
New surgeons not required
short term solution
Offer the service to customers at a new location
long term solution
increase profits
making the Shouldice method available to a wider audience
operating in a less restrictive environment

ACA 1. Start operations of Saturday, charge more during peak periods

Action
Plan

1st quarter
of 2015
Change initiation
Conduct a meeting with the board of
directors proposing the advantages of
additional operating day.

Discuss the changes to the employees.

Monitoring and analysis

Create a system that will determine the
employment schedules routinely.
Monitor and analyse the hospital
quality of service.
Monitor and analyse the hospital profit.

Modelling and optimizing

Ask for feedback regarding the
addition of Saturday operations to the
employees and patients so the hospital
can enhance the shouldice experience
to their employee and patients.

2nd quarter of 2015

3rd quarter of 2015

4th quarter of 2015

For ACA 3, For ACA 3. Select a new location as far away as possible to the existing facility in Toronto.
1st half of 2015

Planning
Determine possible new location for Shouldice in the
United States.
Determine the necessary investment needed to this
expansion.

Organizing
Delegate authority that will be in-charge in the expansion.
Look for possible contractors that will construct the new
facility.

Implementation
Award the project of new Shouldice hospital to the
contractor.
Discuss with the contractor the timetable of the project.
Construct the new Shouldice facility(preferably as far as
possible to the existing facility in Toronto)

Controlling
The authority in-charge will monitor the progress of the
construction and might as well look for possible
employees of the new facility.
Develop a training program to the employee to assure the
quality of service the Shouldice offer.
Implement an immersion program between the Shouldice
hospitals and facilities.

2nd half of 2015

1st half of 2016

2nd half of 2016