5. Evidence of success at
Shouldice (1)
Evidence of service success:
i.e. achieving satisfaction
The reunion
The recommendation to others
The extended orderbook
The position of potential expansion
The profitability of the hospital
The value to patients
The motivation of the employees
6. Evidence of success at
Shouldice (2)
Evidence of profitability
For the Hospital:
Revenues: 4 days x $111 x 6850 patients = $3,040,000
Costs (p.10) = $2,800,000
Profit = $ 240,000
For the Clinic:
Revenues: $510 x 6850 + 20% anaesthetic ($75 x 6850) =
$3,596,000
Cost (p.10) = $2,000,000
Profit = $1,596,000
7. Evidence of success at
Shouldice (3)
Cost to patients
Shouldice Other hospitals
Operating cost (p.13) $95 $2000 – 4000
Transportation 200 – 600
Time lost from work at Hospital (p.7) 5 days 10 days
Time lost from work recovering 5 days 10 days
Value @ 50 to 500 / day $1,600 - $6050 $2,250 - $11,500
Recurrence 0.8% 10%
Weighted cost $15 – 20 $275 – $1,150
Total all costs $1,615 - $6,100 $3,025 - $12,650
8. Evidence of success at
Shouldice (4)
Fulfilling the service concept
What is the service concept of the hospital?
To the patient:
Peace of mind
A holiday experience
New friends – a fraternity
You are special but treatment is standard
To the employee:
A direct professional contribution
A team and a place in the team
9. Methods used at Shouldice (1)
Standardisation: screening of patients
Participation: patients do much of the work
Work environment: staff freed from usual disagreeable work
Economics: sharing of expensive services
Best practice: interaction of surgeons
Motivation: all employees interface with the customer
10. Methods used at Shouldice (2)
Facilities for patients:
Avoidance of hospital atmosphere
Use of TVs, ‘phones
The Schedule and Programme (keep moving!)
Stairways
Operating rooms in semi-circle
12. Future expansion options (2)
Add a floor (45 more beds)
29% increase, $930,000/year, i.e. 45% return on investment
Add a Saturday shift
148 to 177 patients/week = $627,000 /year
Develop another facility
Replicate Shouldice on new specialty
BUT: when will service system break down?
for patients
for individual employees
for team and concept
13. Explaining success of Shouldice
Every employee has a role
Every employee interfaces with ‘customer’
Control of customer input
Necessary flexibility to keep to schedule
Small enough to work;
big enough to be known
14. Summary
Shouldice is an effective integrated system Represented by the
problems it does not have!!
Financial Operations
Profitability Breakdowns & absenteeism
Budget failure Yield on resource activities
No future orderbook Failure on customer expectation
Unexplained Delays & unexplained bottlenecks
overhead costs
Marketing People
Undefined product/service Lack of commitment
Unforecastable demand Lack of cooperation & flexibility
Unspecified requirements Exclusivity
of customers Interfaces between functions
15. Creating an effective and manageable
service system
Consider the operations as a customer processing system, rather
than a product processing system
Recognise the total design of the service system as the
basis for inspection – not customer questionnaires
(as proof of the service concept)
Separate the profitability for the customer
and profitability for the provider
Value employees in terms of consistency,
standards and individuality
Protect the customer from queues inside the organisation
Create an image, and experience, of the facilities as an expression
of marketing statements