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Module nameOperations Management Module Code
7IB002
Due date 09-01-2012Assignment title Case study on a Hospital operations managementAll forms of plagiarism, cheating and unauthorized collusion are regarded seriously by the University and could result in penalties including failure in the unit and possible exclusion from the University. If you are in doubt, please read the following web page. Student’s DeclarationBy submitting this assignment I SIGNAL & DECLARE my knowledge and agreement to the following: -Except where I have indicated, the work I am submitting in this assignment is my own work and has not been submitted for assessment in another unit or for any other purpose. This work conforms to the instructions and submission guidelines as contained in the assessment briefing and the module guide respectively. This submission complies with University of Wolverhampton policies regarding plagiarism, cheating and collusion. I acknowledge and agree that the assessor of this assignment may, for the purpose of assessing this assignment:
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Authorised: Dean of School
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Coursework Number or Reference
7IB002 Operations Management Subject Area Finance, Accounting and Business (FAB)
Student Name
Marking Moderation
Dr Gurmak Singh Provisional Grade: A
A B C D EFail
FFail
Application and evaluation of information management on operations functions.
X
Application and critical evaluation of management systems on operations functions.
X
Critical evaluation of the importance of project management to given business situations.
X
Critical evaluation of how the changes in role of business or the use of technology has impacted the function of the operations manager.
X
Excellent fluid writing style, virtually free from grammatical and spelling errors. Format wholly appropriate for task and audience.
X
Excellent range of reading – well beyond recommended reading list. All references complete, accurate and up-to-date.
X
A very good overview of the key operations management concepts for the case organization has been discussed. Each of the relevant operations management concepts have been discussed in good detail. You have supported these sections with relevant reference sources. These concepts have been applied to the case organization to analyse the problems. There is a clear link between theory and practice. You have used the operations management concepts discussed in the previous section and used these to analyse your case organization. Additionally your recommendations are drawn from possible areas for improvement within the case organization. The recommendations are closely linked to the operations management concepts. Key discussions, analysis and recommendations have been supported with relevant source material. There are discussions on the role of project management and management systems in relation to the case organization. There is a theoretical discussion on the role of operations manager. You have used a comprehensive and relevant source material. All the requirements of the assignment have been met, overall a very good assignment – well done.
Tutor’s signature: Dr Gurmak Singh Date:
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CONTENTS
PAGE NUMBERS
1. Introduction 3
2. Synopsis 3
3. Analysis and approaches to capacity planning 4 - 7
4. Lean management and its implications 8 - 10
5. Analysis of Inventory management 10 - 12
6. Quality management and its implications 13 - 15
7. Analysis of project management 15 - 17
8. Analysis of Information systems 18 - 21
9. Role of operations manager 21 - 22
10. Conclusion 22
11. Reference list 23 - 25
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1. INTRODUCTION
This report is on a 25 bedded small private medical hospital located at the Ongole town in India.
Each day nearly 80 patients visit the hospital’s out-patient ward from Monday to Saturday in
between 9am to 2pm and 6pm to 10pm. On Sundays the provision is only foremergency cases.
Along with round the clock emergency services it provides in-patient services and feminine care,
maternity care, surgical care,physiotherapy services, paediatric care and care for other minor
ailments.It has a small café.It also has a pharmacy, a laboratory, ECG and X-ray room, and a
USG scan room. The hospital turnover is $1.8 million/year. After analyzing all theoperations of
the hospital, management is showing keen interest to gain competitive advantage by improving
the quality of services, by reducing waste, and by cutting costs so they are analyzing lean
management, inventory management and quality management issues. To maximizethe capacity
of the hospital, management is focusing on thecapacity management issues.In this hospital each
department uses computers to record the patient information electronically, except at the
pharmacy and laboratory.
2. SYNOPSIS
This case analysis is on a hospital which is planning to increase the turnover by maximizing the
efficiency of the services. Sometimes patients are shifted to another location for post-operative
care due to the shortage of beds. In those situations, doctors and staff are moving here and there,
and allocating staff for different location became an additional cost to the management. Due to
that, management is considering the ways to improve the capacity of the hospital. Patients are
complaining about the longer waiting times at the pharmacy, laboratory, and scan rooms and
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sometimes patients are not getting the right amount of drugs as prescribed by the
doctors.Furthermore, supporting staff are complaining about the inadequacy of stock they needed
in time. So it is concentrating on lean management, inventory managementand quality
management issues.Traditionally people come to the hospital without appointments, and few
other hospitals are offering the same services in that area. Currently, the hospital is using
computers which were not networked, so information was not accessible to all departments
simultaneously. The hospital is seeking to upgrade IT services.
3. ANALYSIS AND APPROACHES TO CAPACITY PLANNING
Balancing the firm’s combined resources with that of demand for its products and services in a
timely manner is called as capacity planning and control, (Vonderembse and White, 2004).
Achieving the appropriate balance between capacity and demand can generate optimum profits
and the wrong balance can lead to wastage and missed opportunities or dissatisfied customers.
Capacity planning is largely a strategic function and capacity of a process might be increased or
decreased by building another facility or changing the process; the aim of capacity planning is to
match the available capacity to forecast demand over the long, medium and short periods,
(Waters, 1999; Heizer and Render, 2004; Bicheno and Elliott, 1997). Capacity might be
increased by tactical and operational decisions like renting extra space, or by working overtime
for a period etc. Usually the total workforce available at any time varies with demand.Such
demand can be met by changing the number of shifts; scheduling work patterns and so on,
(Waters, 1999; Hill, 2000).
To cope with the demand at peak times’ capacity adjustment can be done by, appointing
temporary labour or by adjusting the existing staff to workovertime. In addition, flexible capacity
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helps to change capacity within the limits of the plan or to alter the facility to reflect the needs of
both a business and its customers, (Hill, 2000; Heizer and Render, 2004). The main objective of
capacity planning is to match the level of operations to the level of the demand; and discussed
the cause of uncertainty of demand, it is due to uncertainty of number of orders to be received, or
uncertainty about the amount of resources required for the satisfaction of particular customer
orders. Butthe advantage is providing efficient adjustment or variation of system capacity
(including materials, machines, labour); usually system capacity can be changed with in certain
limit,(Samuel, 1999;Heizer and Render, 2004).
Knod (2001) also supported the above concepts and he further explained the capacity planning.
Capacity policies work best when they are in place before they are needed. And the emphasis is
on capacity allocation, (e.g., emergency medical treatments, services or equipment repairs, or
fast foods). He explained the types of demand and classified them according to their value and
usage, for instance ABC demand;it is a form of discriminating among many items of inventory
according to value. It helps in determining purchasing policies, Slack et al., (2008, 2009).
Capacity can be best maintained if the right amounts of resources are available at the right time
and right place. Thebest example for that is JIT (Just In Time) approach; the core principle of
this is to cut inventories between a pair of processes until the user process sometimes run out of
work (a stock out). The idea is to create bottle-neck, though not a severe or permanent one.
Slack et al., (2008, 2009) classified the demand into two types, one is dependent demand and
another is independent demand. In dependent demand, the demand for one product is related to
the demand for another product. In this most factors are well known and relatively predictable
and the process focuses on the consequences of demand. In independent demand, demand for
one product is not related to the demand for another product. In this demand from customers is
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not known and operations takes planning, & control and decision is based on based on past
experience. The response to customer demand can be achieved in following ways.Resource-to-
order: In this practice product or service produced only when the customer order confirmed.
Create/ make-to-order: Product or service partly produced prior to order, and only completed
when customer order confirmed. Make-to-stock: Product or service is produced and then
customers purchase them. To increase the efficiency of work, the amount of work allocated to
unit/individual is important. If work limit is allocated, and work over the limit is not accepted
that is called finite loading,and opposite is called as infinite loading. If loading was restricted it
results in loss of business, (Hill, 2000;Slack et al., 2009). Cachon and Terwiesch(2009) states
that, make-to-order can eliminate the entire mismatch cost associated with make-to-stock.The
main advantage of this is no left over inventory. And the main disadvantage is never able to
satisfy customer demands immediately.
Application of capacity planning to the Hospital case report
Currently the hospital is following finite loading concept to allocate the work limit to all the
ward nurses, ward boys and porters in in-patient ward;it is increasing efficiency of their work
and their observation on in-patients.In this hospital surgical equipment ready for future
operation, and dependent demand items are stocked prior to the time they will be needed in the
surgery process, (Make-to-stock). Though the hospital out-patient ward opening hours are 9am to
2pm and 6pm to 10pm, the patients coming to the hospital are not limited to the scheduled time.
If out-patient care is restricted to timings, it results in loss of business and competitors can take it
as advantage so hospital is followingthe Infinite loading.To get the laboratory services, patients
are paying the bill for the investigations at the cash counter and then the patient is redirected to
the laboratory through a series of processes, (Resource-to-order).Hospital is using create/ make-
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to-order policy; from hospital reception to housekeeping everything is ready before the patient
arrives the hospital. In this hospital, emergency rooms, surgical instruments, and other
accessories necessary for surgeries are sterilized frequently to give effective health care, (Make-
to-stock). Sometimes to meet varying requirements in line, staff switches from one department to
another, and they were usually trained to do so. When one doctor takes vacation, the other
doctors share that work. To manage with excess demand, management is hiring part-time and
temporary labour. Hospital capacity is not sufficient to meet the demand of patients.Due to that
patientsare waiting for the longer times or going elsewhere.Occasionally, the number of patients
was less and the number of staff was more, at those timesthe hospital is losing its marginal
profits. The hospital is using JIT approach for physiotherapy ward; when patient pays for that
service, the corresponding doctor was informed and he gives his services just in time. The
hospital is shifting patients to another location due to the inadequate number of beds. It is
allocating staff for them.
Recommendation: To cope with the demand, the management can pay for over-time to existing
staff, or they can arrange shift patterns instead of hiring part-time employees for a short time.The
regular patients were familiar with the existingstaff, hiring the existingstaff for overtime is
convenient than hiring the temporary staff. There will be no need of training for the existing
staff.Management can introduce appointment system for patients to avoid waiting times,
(Waters, 1999; Hill, 2000).Knod et al., (2001) states, for on demand sales and services, the
capacity plan aims at providing the right amount of space, equipment, labor, and inventory to do
business. And the recommendation is to capacity allocation (e.g. emergency medical treatments,
services or equipment repairs),efficient allocation of resources in the hospital improves hospital
efficiency.Hill, (2000) suggested that, the capacity indicator of a hospital is its beds. They can
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increase the hospital capacity (in relation to beds, doctors, nurses, and support staff required at
different times) to meet the demand of the patients,that will lead tocompetitive advantage.
4. LEAN MANAGEMENT AND ITS IMPLICATIONS
The principle of lean operations is the elimination of all waste in order to develop an operation
faster, more dependable to produce higher quality products and services and above all operating
at low cost, (Slack et al., 2004). Lean is anything that does not add value to the external
customer, lean operations are strongly associated with both waste elimination and continuous
improvement, (Bicheno and Elliott, 1997); elimination of non-value added activities, (Cachon
and Terwiesch, 2009).Lean operations in turn underpin the techniques of Just In Time (JIT): the
elimination of waste, the involvement of staff in the operation, and the drive for continuous
improvement, (Slack et al., 2004); some lean techniques are not specific to lean operations or to
JIT, they are associated with demand management, total maintenance and total quality, (Bicheno
and Elliott, 1997). Advantages of lean management are: It identifies waste, eliminates waste, and
involves every employee and continuous improvement in operations. Elimination of waste can
be achieved by reducing overproduction of goods/services, by decreasing waiting times, by
reducing unnecessary transport and by correcting unnecessary motion etc.Lean reduces costs,
improves quality and efficiency of work. Disadvantages of lean management are: It can be
achieved only through involvement of all the staff and their response to changes might be
different from individual to individual,(Slack et al., 2004).
Application of lean management to the Hospital
Presently, the hospital is using some lean management principles. For example, the
hospitalnurses were needed to wash their hands frequently for a variety of reasons.So the
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administration advised them, to wear disposable gloves and to use antiseptic sprays to reduce
unnecessary movement of nurses and to save time. Therefore, they can move to another patient
more quickly.Particularly, people waiting at USG scan rooms was horrible because most of the
patients were asked to drink large amounts of water for getting scanned.There the patient
transport process was one of the most delay factors.That processis taking longer time and
patients are asking for quicker response.At the pharmacy, on one hand customers are waiting
longer times and sometimes not getting the right amount of medicines. On the other hand, the
pharmacy is not selling some medicines until expiry date.It is leading to waste of money and
medicines. The bed allocation in the hospital is usually to urgent priority; in in-patient wards
patients are placing by clinical similarity to avoid unnecessary movement of doctors. Frequently,
nurses are not having right information about the patient discharge when patient was readied for
discharge. They are waiting for the signature of the discharge coordinator. Already due to the
inadequate number of beds, some services shifted to another location. Consequently, patients
who need to be admitted into the hospital are waiting. Furthermore, doctors are waiting for the
patient clinical information from other departments.
Recommendation
Lean management recommends flow improvement (Bicheno and Holweg, 2009), where each
patient is worked with one unit at a time, and passed on to the next step of the process without
any delay. And standardizing the process in line with demand, not before and not after demand,
training the staff, team work, and improving communication measures between units help to
avoid unnecessarywaiting times, (Bicheno and Holweg,2009).These recommendations help in
avoiding queues at the scan room and pharmacy as well.Lean allows continuous improvement
and improves quality, (Cachon and Terwiesch, 2009; Bicheno and Holweg, 2009). Unnecessary
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moving of materials does not add value; changing and bringing the processes together can help
to improve the process and to reduce waste, (Slack et al., 2004; Bicheno and Elliott, 1997;
Bicheno and Holweg, 2009; Cachon and Terwiesch, 2009). These lean principles recommend the
hospital, to coordinate all the activities of doctors, nurses and administration. So that nurses can
discharge the patient exactly when the patient needed, without waiting for the
information/process/signature of corresponding people,and it can resolve the bed occupancy
problem as well.In the pharmacy, they can place the newest deliveries of drugs at the back of the
queue, so that they can sell old medicines first.These small operational changes with the existing
resources will avoid the wastage of medicines.
5. ANALYSIS OF INVENTORY MANAGEMENT
Inventory management concerns the management and control of the materials that to go into the
products and services at different points in the conversion process, (Hill, 2000). In many
instances the inventory is used to buffer against uncertainty, and furthermore it can hide
problems, (Mangan et al., 2008). Inventory can also help a company to respond to customers
more quickly, to meet expected demand and to take advantage of quantity discounts etc.,
(Vonderembse and White, 2004). Inventory items can be classified as ABC items based on
Pareto principle. It represents the highest value items as ‘A’ class, medium value items as ‘B’
class, and lowest value items as ‘C’ class which requires little management, (Bicheno and Elliott,
1997; Lambert et al., 1998). ABC analysis helps in reducing the inventory levels and costs,
(Slack et al., 2004). The main disadvantage of this system is the, value was given to high usage,
not to the high importance of items, (Heizer and Render, 2004). Bisen et al., (2009) explained
VED analysis: E for essential items, D for less essential items and V for large stock of inventory
items.
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Inventory is related to the relative rates of demand and supply. In order to maintain the inventory
the principles of dependent demand and independent demand are also useful, (Hill, 2000).
“Inventory control models assume that the demand for an item is either independent of or
dependent on the demand for other items”, (Heizer and Render, 2004). Inventory can be
managed by, 1. Continuous inventory systems: Inventory levels are continuously monitored,
when the inventory level drops below a certain level they are replaced, this system encourages
just in case approach rather than just in time approach, the gap between the orders will vary in
line with different levels of demand. In a continuous inventory system the stock position is
monitored after each transaction i.e. continuously, (Hill, 2004); but monitoring and checking
inventory levels continuously is time consuming and expensive even when using suitable,
computer based systems, (Slack et al., 2004). The Continuous/perpetual inventory system offers
the advantage of constant inventory levels at any point in time, (Vonderembse and White, 2004).
2. Periodic or bin inventory system: Inventory levels can be checked at a specific time that leads
to the variable ordering of new stock, the inventory level is set to cover the demand until the next
periodic review plus the delivery lead time, (Hill, 2000; Slack et al., 2004). Due to the periodic
checking low inventories will be possible, (Vonderembse and White, 2004; Heizer and Render,
2004). Just in time approach is a pull based system, in response to the customer, goods are only
produced when they are needed. 3. Single bin inventory system: In this stock is replaced when
the maximum level of stock was lowered than it, (Krajewski and Ritzman, 2002; Hill, 2000).
Application of Inventory management to the Hospital
The hospital pharmacy is using the manual process to find the inventory levels in it. Pharmacist
is not distributing medicines according to the expiry dates of medicines; they are combining old
stocks and new stocks. Often, old stocksare leading to expiry.Management is frustrating with the
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medicines wastage. Sometimes regular medicines are not meeting the demand of patients.
Sometimes the housekeeping staff are complaining about the materials they needed in time. The
hospital is using the continuous inventory system for items such as vital medicines, laboratory
essentials, oxygen cylinders and other surgical items such as linen etc. In addition, the hospital is
following single bin inventory system for health information leaflets, housekeeping materials,
Inpatient case sheet templates, prescription pads etc. The hospital is using JIT approachin the
café for managing milk, sugar, fruits and other snacks. The management is seeking for the
improved service delivery, increased availability of drugs, and the right amount of drugs at right
times.
Recommendation: The hospital can use the ABC analysis system, for high usage medicines as
‘A’ class items. It helps them in keeping the right amount of inventory at right times. They
should verify the records more frequently because most of the items in hospitals are vital and
lifesaving. ‘A’ class items should have tighter physical inventory control and records should be
verified more frequently, (Heizer and Render, 2004; Slack et al., 2004). The hospital can use the
periodic inventory system for housekeeping materials, Inpatient case sheet templates,
prescription pads etc. The periodic bin inventory helps in lowering inventory levels, and
maintaining inventory at right time,(Vonderembse and White, 2004; Heizer and Render, 2004).
Though the continuous inventory system is time consuming and expensive, it is helpful in case of
inventory of emergency medicines and other vital tools. Because it offers the advantage of
constant inventory levels at any point in time, (Vonderembse and White, 2004).
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6. QUALITY MANAGEMENT AND ITS IMPLICATIONS
Methods to improve quality such as quality control, quality improvement, and quality assurance
are collectively known as quality management, (Hoyle, 1994). The ISO definition states that,
quality control is operational techniques and activities that are used to fulfill requirements for
quality. Quality improvement is anything which causes a beneficial change in quality
performance; quality assurance is the all the planned and systematic actions necessary to provide
adequate confidence that an entity will fulfill requirements for quality, (Hoyle, 1994). Quality
control uses a series of inspections and tests to check that planned quality is actually achieved or
not, (Waters, 1999). It inspects in two ways: one is detection of defects at the end of the
operation and another is prevention of faults at the end of operation, (Slack et al., 2004; Hoyle,
1994). Quality assurance activities do not control quality; its aim is to gain confidence in
operations; it assesses the organization’s products or services against prescribed standards to
establish capability to meet them, (Hoyle, 1994).
The evolution of quality management is stimulated by the impact of the demand by customers
for higher quality conformance levels and the increasing competitiveness in world markets
resulted in Total Quality management (TQM) (Hill, 2000). TQM is a way of conducting business
with the involvement of each employee and aimed at providing high satisfaction to customers,
(Dilworth, 2000). Advantages of TQM include: the whole organization works together to
guarantee and systematically improve the product quality, with zero defects, (Waters, 1999; Hill,
2000; Dilworth, 2000; Slack et al., 2000). Continuous improvement is part of TQM (Hill, 2000;
Slack et al., 2004, and Dilworth, 2000), TQM gives importance to preventing defects (Waters,
1999). TQM believes leadership is vital to a high quality effort, (Dilworth, 2000). However,
TQM has some disadvantages as well. They are: devolving responsibility to lower levels of the
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workforce can lead to problems; it may fail along the way if the top level management lacks
commitment and planning, when every employee not involved, when changes were being
unpopular and managers being satisfied with small improvements, (Waters, 1999; Vonderembse
and White, 2004).
Application of quality management to the hospital
At present the hospital is dedicated to health and safety regulations to provide quality care to the
patients. The hospital staff are qualified and well trained to meet the standards of the hospital.
The allocated staff periodically checks the equipment to prevent hazards (ex. Checks oxygen
cylinders, laboratory equipment etc.). The hospital keeps stock of rare medicines and emergency
tools to serve the patient immediately. Because demand for health services is volatile and
unpredictable, it always keeps the surgery theatres and equipment and other resources to deal
with emergency situations. The staff is more attentive to patient demands. The hospital has
effective housekeeping services to prevent and control infections. The quality control was
inspected by the hospital manager regularly; individual departments are not takingthe
responsibility for quality. The communication between the departments is poor; due to reciprocal
interdependence of therapeutic and diagnostic services the waiting times at the scan rooms and
laboratory are frustrating issues to patients. All these issues provoked administrators for
continuous improvement of quality of the hospital to get competitive advantage.
Recommendation: The hospital can follow TQM approach to improve its quality of care. TQM
involves standardizing the document procedures, assigning teams to identify areas of
improvement etc. (Vonderembse and White, 2004). Teamwork and communication can solve the
problems of waiting times at diagnostic centers. To hold the quality responsibility at
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departmental level, employee training and involvement in the whole process is recommended
which helps in devolved decision making. TQM recommends education and training of
employees, employee involvement, teamwork, measurement and feedback to recognize
employee achievements (Hill, 2000). Because the employee has authority to investigate faults
and to ensure avoiding in the future, minimum failure costs occur, (Waters, 1999). If patients
were intimated with information about the duration of diagnostic services, it may prepare them
psychologically.Attitude, informed and timely communication affects, the quality of the
business, (Gatiss, 1996). TQM is not a quick fix; it takes time and resources to implement
(Vonderembse and White, 2004).
7. ANALYSIS OF PROJECT MANAGEMENT
Project management is the process of planning, scheduling and controlling all the resources
required for completion of a project while meeting the technical, financial and time constraints
required (Bicheno and Elliott, 1997; Slack et al., 2004). It involves the coordination and
balancing of cost, quality and time. Project management takes a strategic approach to reduce
complexity and ensure efficiency, (Koster, 2010). Project planning gives the information about
the objectives to be done. It defines each activity and break down each activity into manageable
parts through work break down structure. It gives the list of resources required including money,
personnel, equipment, and material needed to complete the project, and time estimation to
perform each activity, (Heizer and Render, 2004; Vonderembse and White, 2004). Project
scheduling involves sequencing and allotting time to all project activities; it gives the details of
each task time; how many people and resources are needed at each stage of activity; one popular
project scheduling approach is the Gantt chart, it is widely used non mathematical simple to use
visual technique, (Heizer and Render, 2004).
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Project control helps in close monitoring of resources, costs, quality and budgets. Control also
helps by using a feedback loop to revise the project plan and make able to shift resources to
where they are needed most, (Heizer and Render, 2004). For large and complex projects to
schedule, monitor and control the project, the techniques like PERT (Program Evaluation and
Review Technique) and CPM (Critical Path Method), AOA technique (Activity On Arrow), and
PNT (Project Network Techniques) were in use, (Koster, 2010; Heizer and Render, 2004).
Factors causing the project failure are: lack of support from senior management, poor
communication, rushed decision making, inaccurate time estimation, ignorance of legal or
environmental conditions, too many significant changes during the project and lack of
managerial control etc.,(Bicheno and Elliott, 1997). The benefits of project management are:
deliver the projects on time, within budget, with an agreed quality level.
Application of Project management concept to the hospital
Hospital management is planning to buy another automatic report generating USG scan machine
because the patients are frequently complaining about the queues at the scan room. Pregnant
women are feeling theinconvenience in waiting at the scan room for longer times. Buying
another scan machine can reduce the waiting times at the scan room. It can improve the quality
of the service and provides competitive advantage to the hospital. This project needs to be
executed smoothly without interrupting the day-to day activities of the hospital as patient care is
paramount.The project requires these activities: 1. Purchasing USG scan machine, 2. Preparing
scan room for equipment installation, 3. Purchasing furniture and 4. Scan machine Installation.
The work breakdown structure of the project was as follows. Task1 can be done in three stages:
Requesting for equipment quotation; Analyzing the price quotes; Ordering the equipment. Task 2
17
can be done as follows: a. Appointing a contractor to do all the work needed;b. Building work; c.
Plumbing work; d. Electrical work; e. Painting work;f. Carpenter work and g. Cleaning the room.
The resources required for the project are: a plumber (1 day * 8 hours), an electrician (1 day * 8
hours), a carpenter (1 day * 8 hours), a painter (1 day * 8 hours), a builder(1 day * 8 hours), a
cleaner (0.5 day * 8 hours), the USG scan machine, furniture, building, plumbing, electrical,
painting and cleaning materials. The estimated project completion time is 10 man days.The
allocated budget for the project is $8000.
The activities are scheduled in sequence and parallel. On day 1, task 1 and 2 activities can start
asparallel. The task 1 finishes on day 3 and the task 2 continues until the day 8. Task 3 starts and
finishes on the same day3. Task 4 starts and ends on the day 10. The risks associated with the
project are: 1. delay in materials and equipment delivery may affect schedule, 2. worker’s illness
or absence, 3. patient services may affect, 4. workers may not have insurance and 5. project costs
may increase.The mitigation plan for the smooth execution of the projectis:alternative resources
should be arranged by the contractor if allocated resources are absent, hospital management
made a contract with the contractor not to do work at the peak hours of the hospital for continuity
of the patient services, the contractor is responsible for workers’ insurance and should verify it
before commencing work and reviewing all the activities at the end of the day.
Project control and monitoring is very important due to the size and nature of the project (project
association with patient services). Project daily status meetings are scheduled and progress was
reported to the hospital director. Project completedwithin budget and time with accepted quality.
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8. ANALYSIS OF INFORMATION SYSTEMS
Information system (IS) is a system of communication between people, involved in gathering,
processing, distribution and use of information, (Davies, 2002; Kelly cited in Shajahan, 2004). In
general information systems may classify along, a horizontal dimension based on types of
organization using information systems; and vertical dimension in terms of three levels of human
activity and decision making that information systems support. Vertical layers of the Information
system are Transaction processing system (TPS), management information systems (MIS), and
executive information system/decision support system (EIS/DSS), (Davies, 2002). Transaction
processing systems are operational information systems of the organization such as order entry,
accounts payable and stock control systems. This data is essential to support the day-to-day
operations that help a company add value to its products and services; firms need TPS to monitor
the status of internal operations and the firm’s relations with the external environment. The
principal purpose of the TPS is tracking the flow of daily transactions necessary to conduct the
business, such as employee record keeping, payroll etc. Failure of TPS for a few hours can lead
to loss of that business and other businesses linked to it,(Davies, 2002; Laudon and Laudon,
2006; Shajahan, 2004).
The field of MIS promotes solutions to real world problems.Middle management needs MIS to
deal with monitoring, controlling, decision making, and administrative activities. MIS generates
reports on the organization’s current performance which can also help in predicting firm future
performance.MIS enables managers to drill down to see daily hourly data if required. MIS are
not flexible and have little analytical capability, mostly use simple routines such as summaries
and comparisons, (Laudon and Laudon, 2006). MIS generates scheduled reports on prearranged
information regularly; generates demand reports at the request of the user; and generates
19
exception reports showing the list of tasks that do not meet the predetermined set of settings,
(Stair and Reynolds, 2003; O’Brien and Marakas, 2007). MIS push reports, generates reports on
selective information to the manager’s networked workstation by using webcasting software,
(O’Brien and Marakas, 2007). Traditional MIS is centralized, the ability to respond to local
information requirements has been both an attraction to their users and a threat to the power and
importance of the centralized computing resource, (Curtis and Cobham, 2008).
EIS draw summarized information from internal MIS and DSS. ESS filter, compress, and track
critical data and display most important data to senior managers, (Laudon and Laudon, 2006).
EIS provides information to drill down quickly to lower levels of detail in areas of particular
interest to the executives, (O’Brien and Marakas, 2007). DSS use internal information from TPS
and MIS, and often bring information from external sources. DSS focus on unique and rapidly
changing procedures and helps middle management in non-routine decision making, (Laudon
and Laudon, 2006). Decision support/executive information systems are generally expected to
support longer-term strategic decision making. DSS/EIS utilize data generated by MIS to
generate policy decisions in the area of business strategy, (Davies, 2002).
Customer processing technologies include surgical equipment, medical diagnostic equipment,
body scanners, renal dialysis systems etc. Material processing technologies include baking
ovens, automatic vending machines etc. Information processing technologies include optical
character recognition machines, management information systems, search engines of the internet
etc. Process technologies depending on their inputs, process the information necessary for the
day-to-day operations of the work, (Slack and Lewis, 2008). Healthcare organizations have
begun to use Web technology to access patients’ insurance eligibility and other information held
in databases to cut patient costs, (Stair and Reynolds, 2003).
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Application of information systems to the hospital
The hospital is currently using information technology in the areas of surgical equipment,
medical diagnostic equipment and body scanners. That is customer processing technology
helping in diagnosing illness and to plan medical treatment. The hospital is using Transaction
processing system (TPS) partially. It is using personal computers at the reception to record
patient details and at the cash counter to generate bills. Doctors are also using personal
computers to record patient information electronically; it is helping them to look at the patient’s
medical history in diagnosing the disease. The problem is the hospital is not using computers at
the pharmacy and laboratory. They are entering all the transactions manually. It is consuming
time and increasing patient waiting times. The pharmacists are facing difficulties in checking the
stock levels. Often they are not maintaining the right amount of stocks. The Hospital is losing
marginal benefits at the pharmacy.The data is duplicated across different systems in the hospital
due to stand alone computers. Moving data manually from one department to another is
consuming doctor’s time and reducing the efficiency of the operation.
Recommendation: Information systems recommend this hospital to use TPS and MIS
throughintranet web application byintegrating various parts of operations. It facilitates better
communication, access to more accurate information, better coordination and collaboration, and
it is cheap and easy to implement and use, (Davies, 2002). Davies, (2002) also stated that, for
example, in NHS, information systems are providing support to clinical decisions, helping to
monitor clinical performance, and to evaluate clinical performance against standards. Healthcare
organizations use information systems to diagnose illness, to plan medical treatment, and to bill
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patients,(Stair and Reynolds, 2003). Information systems also recommend the hospital pharmacy
and laboratory to use personal computers. Information systems help to record each transaction
electronically, to monitor stock levels frequently and to order the future stocks, (Curtis and
Cobham, 2008; Vonderembse and White, 2004). So they can maintain the right amount of stocks
at the right time which improves the quality of the services. Laboratory shouldrecord patients’
investigation reports electronically which help them to generate reports easily and to use them in
the future whenever the correlation of data is necessary. Applying IT technology to service
operations enhance decision making and improve control by integrating various parts of
operations, and it is a way to achieve competitive advantage, (Vonderembse and White, 2004).
9. ROLE OF OPERATIONS MANAGER
Operations managerrole is to develop a vision in translating the organization’s goals.Hehas a set
of general principles to guide strategic decision making towards the organization’s long term
goals. Organizations will interpret broader responsibilities in different ways such as the effects of
globalization, the pressures of environmental protection, the increasing relevance of social
responsibility, the need for technology awareness and knowledge management, (Slack et al.,
2010). In the current techno-economic era operations manager’s role is to streamline all the
operations, to maximize the utilization and the optimum arrangement of all the firm’s available
resources.He help the organization flow in order to meet customer’s varied demand with respect
to quality and time.He minimizes the total cost of inventory; he ensures the operation’s relative
achievement in each dimension of performance driven by the requirements of the market to
improve the competitiveness of organizations, and thus benefit the national economy.
Furthermore, the role of operations manager include corporate social responsibility i.e. a
company’s commitment to operating in an economically, socially and environmentally
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sustainable manner whilst balancing the interests of diverse stakeholders. An operation manager
ensures the business ethics, business regulations and legal requirements. In addition, he plays a
key role in change management during restructuring of organizations;operations manager
communicates and educates the employees, (Slack et al., 2007).
10. CONCLUSION
Operations management concepts helped the hospital to improve its operations ability and
efficiency. Staffing and bed allocation issues were resolved by capacity planning. Unnecessary
waiting times between the departments and wastage of medicines at the pharmacy was
eliminated by lean management. The hospital pharmacy is able to maintain the right amount of
drugs at right time with the application of inventory management. The quality of care was
improved by quality management. Project management helped to install the new scan machine
within budget. And information systems helped integrate and collaborate all the operations of the
hospital. The case analysis is revealing that operations management is the heart of the
organization’s activities.
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