Mantra Care Assignment

CCV Operations Assignment: W149303021 W151347051 W15147361

Operations Assessment for Mantra-care

CCV- October 2014

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Contents

1. Summary of Marketing plan and economic analysis page 3

2. Operational Issues page 3

2.1. Objectives and Strategy page 3

2.2. Supply chain for Mantra-care page 7

2.3. Factors affecting output page 7

3. Analysis of potential problems page 8

4. Methods of overcoming problems page 10

5. Capacity page 11

6. Quality page 12

7. Conclusion page 13

References page 14

Appendix 1 page 16

Appendix 2 page 17

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Operational Assessment of Mantra-care

1. Summary of Marketing plan and economic analysis

Mantra-Care is a service operation providing plastic surgery clinic for men that require a different approach to follow up post treatment compared to women. Clinics providing surgery for males have been increasing year on year with an overall growth of 16% of procedures in 2013 (Guardian, 2014). Mantra –Care has therefore considered this niche market as a potential opportunity to develop services within the well-established female cosmetics industry. The service value proposition for Mantra-care is to offer top quality treatments with internationally recognised doctors. No treatment is offered without consultation with the medical director. The point of differentiation for mantra-care is to offer spa facilities to support the male recovery process with guaranteed fast and easy web access to support business needs of the clients whilst providing a controlled environment for post treatment recovery. The company owns a facility in the London Harley Street location twinned with luxury spa facilities for recovery. All staff are expert in their field, registered with BAAPS and fully committed to offering excellence in the care, treatment and recovery experience of its consumers. The target market is men focused on physical appearance striving for perfection in looks, confidence and social success. The actual market in UK is about 4,500-5,000 clients per year (Guardian, 2013) Mantra-care want to attract wealthy people from abroad offering them a combination of high quality, flexible timing and post- service treatments. This would mean that mantra-care would be moving to the right side of the UK demand curve by adding consumers from foreign countries. To be successful in reaching normal profits, Mantra-care would need to limit the number of underutilised resources in order to minimise costs, waste, and maximise efficiency of output. As Mantra-care has chosen to supply males only it expects demand to be lower than for its competing rivals in the short term however in the long run it is predicted that the firm will receive a steady growth by which time the unique brand will have been established through the robust marketing strategy. Mantra-care has relatively low fixed costs and most of the variable costs are related to actual activity and therefore revenue so the Average total costs (ATC) can be kept to a minimum (BAAPS, 2014; Shepard, 2014).

2. Operational Issues

2.1. Objectives and Strategy

Business operations are concerned with four main areas; Marketing and sales, Operations processes, Production and Finance. Mantra-care is a service operation with a corporate strategy related to provision of plastic surgery services and after care to a growing niche market of men (Johnson et al, 2005). The corporate strategy and objectives for Mantra-care are outlined in Table 1 below (Johnson et al, 2005).

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Table 1: Corporate Strategy for Mantra-care

Mission Statement: “Mantra-Care strives to inspire adult males to fulfil their dreams and truly enjoy life whilst providing superb body sculpting results and outstanding experience for all of our clients.”

Values: Offering a safe and superior service Mantra-care provide the best care for their clients. Mantra-care provides clients with the best results.

Mantra- Care’s Strategic Objectives:

Financial To get the BEP the first year and a 30% Marginal Rate to Revenues from year 2.

To increase revenue by 16% per year (in line with male market growth)

To maintain our fixed costs lower than 30% of the revenues from year 2 and lower than 25% from year 3.

Customer To understand the company’s male clients’ needs and produce results that exceed expectations

Internal To achieve a zero error rate in all surgeries performed To utilize top equipment, training and technologies To exploit expertise and high skill level of staff

Learning and Growth

To employ top quality staff To maintain accurate records and information To maintain up to date training

Mantra- Care’s Strategic Priorities:

Focus On the UK and European market with the aim of expanding globally Ensure business is running in line with the company’s economic assumptions

prior to expanding

Guarantee all business related activities are supported by an effective quality system

Strategic Action Plans:

Grow the plastic surgery and spa business and create basis for our unique model of care and future expansion

Establish Mantra-care as a profitable business with the UK market

The business strategy focuses on surgery and related treatments for men with good quality recovery and follow up services. (Figure 1)

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Figure 1:

The Business Definition of Mantra-care (Abell, 1980)

Customer – what

Customer Groups- who

Technology – How

As this is a new business, there is a high possibility of a market driven strategy that will emerge over time and Mantra-care recognises that their business strategy will need to be reviewed on a regular basis in order that they can remain competitive.

The functional strategy for Mantra-care is concerned with how resources are managed and how technology and skills of staff contribute to the overall functioning of the company. Given that mantra-care is committed to providing top quality whilst maximising profits, the main considerations for the company will be; Cost, quality, speed, dependability and flexibility. Ferdows and de Meyer’s (1990) sand cone model of operational excellence (Ferdows and de Meyer, 1990) rejects any ideas of having to make trade- offs for areas of

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Plastic surgery for men interested in personal appearance

Equates high cost with high quality High disposable income

Males only Partner/ support persons

mainly at Spa facilities Computerised equipment Latest surgical techniques Spa treatments Computerised booking

system Website for information and

advice


operations to impact on quality and it helps to consider how each of these aspects contributes to the core factor of quality (Figure 2)

Figure 2:

The Sand cone model of operational excellence (Ferdows and de Meyer, 1990)

Costs and assets contribute to the overall costs and will impact on profit. Revenue will be influenced by the dependability and flexibility of staff skills, attitude and commitment to the company service proposition. Table 2 shows the domains that impact on Mantra-care’s ability to create competitive advantage. The company requires core competencies to contribute to the business goals of providing an excellent service, distinctive competencies, plus dynamic capabilities to flex to changes in the market (Hardley, 2014).

Table 2:

Domain Mantra-care- maintaining competitive advantageCosts Pay costs

Maintenance Rental costs of equipment Supplies ( non-pay costs) Service Level agreement for cost per case provision of Spa Treatment

Recovery packageAssets Building for clinic

IT equipment Service Level agreement with High Quality Spa Facilities

People Front office Surgeons( zero hours) Owner Reception/Administrative staff Treatment staff

Back office Housekeeping staff Owner manager Owner accountant

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Profit = Revenue – cost

2.2. Supply chain For Mantra-care

Mantra-care’s supply chain is comprised of 2 tiers of suppliers and is a crucial aspect for Mantra-care service delivery as without reliable suppliers, the company will not be able to deliver their service proposition.(Jacoby, 2009). The supply network has been rationalised in order to reduce transaction costs, build relationships and simplify the process. The diagram in Figure 3 demonstrates the supply chain for Mantra-care to support delivery of the services directly to customers (Jacoby, 2009).

2.3. Factors affecting output:

There are a number of factors that impact on the output of a company which include both structure and infrastructure. Table 3 shows the factors affecting Mantra-care.

Table 3:

Domain Impact on Mantra-careStaff/ Skill level As Mantra-care is a new business it will take time to train new staff to

deliver our service according to our standards. Staff’s pre-existing skill level will need to be high as initially the business will require only a skeleton staff to provide for customers until we achieve an adequate volume. Good skills base will require robust competency based recruitment processes for all staff.

Process Operational policies for all procedures as well as clinical professional guidance will provide process structure.Customer processing /Customer services –“moment of truth”

Resources Strong supply chains will be required in order to ensure the service performs to a high standard. This service also requires a high skills and knowledge set from its staff in order to perform scheduled procedures and interface with clients. Should anything be unavailable or timing becomes an issue this will reduce/ delay our capacity to serve our clients i.e. the Bullwhip Effect (Carranza Torres, and Villegas Moran, 2006)

Product/ Service Mix

Should there be issues in relation to procedures such as a lack of staff or delay in equipment provision this will reduce capacity to provide. As Mantra-care is a service the customer is part of transformation process and receives the non-tangible service as it occurs

Storage Storage will be required for treatment products and equipment for procedures.

Management Ensuring accurate scheduling, supervision and training will effect capacity provision.

IT facilities/ Setting up the correct IT systems and having adequate numbers of

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technology staff trained and responsible for maintaining and updating information will help reduce time.

3. Analysis of potential problems

In order for Mantra-care to work effectively, there has been an evaluation of various top quality suppliers with defined service level agreements that ensure Mantra-care has ready access to all materials required to provide the booked treatments, surgical procedures and after care procedures within a hygienic environment. All staff, regardless of role, are trained in high quality customer services, all recognise that image is important and have clarity of role expectation. Treatment staff are well informed and have high technical skills base so that they are able to manage customer enquiries as well as offer un-booked treatment s where capacity allows. If any one of the above links in the chain is not present, the production line would be impacted thus the overall business could lose money (Hardley, 2014)

There are several key issues that can impact on the production line these have been outlined the table 4 below (Slack, et al., 2009).

Table 4:

Issues Impacting on production line:

Issue break down for Mantra-care:

Low Labour cost Maintaining low labour costs in order to keep company profitable

Diversity Issues around understanding cultural differences and the implications of these when interacting with other staff and customers.Understanding LGBT community and identifying their needs in order to best serve our largest customers base,Equal opportunities for employment

Discontinuities Relationship breakdown with suppliersIssues with stock inventorystaff absences and staff turnover

Corporate Social Responsibility

Environmental sustainabilitywaste products

Communication Breakdown in communication system along the supply chain to the end userverbal communication IT systems

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Figure 3 (APICS, 2011)

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RetailerTier 1 Supplier

Tier 2 Supplier

Customer

Spa products

Uniform Supplier

Cleaning product Supplier Company

Facilities andMaintenance

Doctors

Therapists

Spa staff

Housekeeping staff

Catering

Plastics equipment/ toolsProvider 1

Plastics equipment/ toolsProvider 2

Information Flows

Spa customers

Plastic surgery customers

Combined customers

PRIMARY PRODUCT FLOW (Down Stream) PRIMARY CASH FLOW (Up Stream)

Mantra- CareOperations

House keepingProvider

Laundering service

Producer


4. Methods of overcoming problems

The most effective way of overcoming any of the potential operational problems is to prevent them from occurring. This can be achieved through good operational policies and procedures, and supporting the induction and training systems in place for the company. Monitoring of procedures and operations is another important process for identifying problems and resolving them in a timely manner rather than once any error has occurred (Barnett,2014).

Table 5 outlines Mantra-care’s solutions for combating the emerging issues.

Table 5:

Issues Impacting on Production Line:

Solutions for Mantra-care:

Maintaining Low Labour cost

Providing cost per case payments to surgeonsTraining staff in order to fulfil multiple functions within organisation i.e. treatment staff provide admin and reception.Flexible pay costs for medical staff

Diversity Provide training to staff, become equal opportunity employer

Discontinuities Ensure good open relationships are maintained with suppliers, have back up supply options in case of break down as part of emergency operations plan, stock managed and updated on system and details communicated to staff and suppliers on weekly basis, sickness and return to work policies and guidance provided, emergency staff and backup provision, regular training and induction and recruitment drive for new staff

Corporate Social Responsibility

Green and organic, Fair trade certified products are to be used within the company, (ask clients to take responsibility and reduce their laundry use by perhaps using less towels and reusing these and sheets)

Communication Provide accurate information along the supply chain, one person responsible for communicating with suppliers in order to avoid confusion, regular updates from staff via electronic systems re: supply reorder, regular stock take and inventory checks updated on systems and sent over to suppliers, ensure feedback loop

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5. Capacity

Mantra-care produces a high level personalized surgery treatments it means that its capacity is focus principally on:

1. The number of calls from potential patients who are interested in Mantra-care services

2. The number of patients who can be seen before a treatment3. The number of patients ready for an appointment for the treatment4. The number of patients who receive surgery treatment

Table 6 shows the design capacity for Mantra-care

Table 6:

Points Assumptions Design Capacity

The number of calls from potential patients who are interested in Mantra-care services

2 staff with a single call with an average duration of 20 minutes each

Design Capacity is 12,096

The number of patients who can be seen before a treatment

2 staff with continuous appointment of 30 minutes each

Design Capacity of 8,064

The number of patients ready for an appointment for the treatment

2 part time doctors that need minimum 60 minutes for each appointment, availability is for 1 day per week


The number of patients who receive surgery treatment

Mantra-care defined average revenue at £4,000 and the BEP is gained after 250 surgical procedures. This would mean an average of roughly 1 treatment per day


Utilization = Actual output Design capacity

Efficiency = Actual output Effective capacity

In the first year, Mantra-care will waste many profitable hours for training because staff will be new to the company. The goal, for year 1 is to gain the Break Even Point (BEP) with 250 operations with an average worth of 4,000.Therefore the “Actual Output” for year 1, means

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that we can achieve this result, for the number of patients who receive surgery treatment with utilization of 16% and efficiency of 22% (Appendix 1 & 2)

6. Quality.

At Mantra-Care quality is a top priority, where Philip Crosby’s phrase “do it right first time- zero defects” is part of the Mantra of operations (Crosby, 1980). As quality is of paramount importance that there is an allocated Quality Manager role within the organisation. This role ensures that all products meet the highest specification, oversee the quality program including responding to customer feedback to inform the development of new opportunities for growth and improvement as well as to support staff in achieving total quality management (TQM). Through this role Mantra-care collaborates with physicians, customers and all staff to ensure the company is meeting the strategic objectives and creating opportunities to enhance the quality program through the development of clear measureable goals. This Quality Manager role is also imperative in creating Mantra-Care’s Evidence-Based Clinical Practice Guidelines and clinical pathways. Mantra-care believes that through reviews and appraisal of current literature so the role also supports Mantra-care in ensuring patient safety and quality practice through sharing relevant guidance and helping employees to keep up to date with best practice and safety guidance (Al-Hogail, et al., 2010).

Mantra-care has adopted a TQM approach and uses effective audit tools for physicians and all other staff involved in the delivery of their product. It will utilise an up to date electronic record system which is linked with the stock data base and suppliers. Specific staff are called upon to assist in data collection, entry and analysis and assist us in the evaluation of procedures (Alhogail, 2011). They also utilize relevant bench marking guidance for plastic surgeons in order to achieve an international standard of practice and raise the level of our practitioners who then follow the guidance (Al-Hogail, et al., 2010; JCST, 2014).

One system for quality improvement is the Deming Plan, Do, Check and Act cycle (Rother, 2010). This provides a structure for considering an area of service production that might require some changes with an aim of service improvement (Rother, 2010) (Figure 4)

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Figure 4:

The Deming cycle (Rother, 2010)

Table 6 demonstrates some examples of how the PDCA cycle might be used for Mantra-care

Table 6:

PDA CYCLE Example

PLAN Zero serious incidents: Procedures and guidelines are adhered to by all staff All staff trained and signed off having achieved competency

level. Staff supervised on 3 occasions Staff receive Monthly supervision from senior staff Clinical notes up to date and accurate

DO Collect data on training records, perform clinical audit

CHECK Analyse data on training records and clinical audit results. Look for patterns and trends over time i.e. differences between shifts and cases treated

ACT Feedback given to staff about results obtainedDiscuss barriers and generate solutions to ensure objectives are met. In this case if staff have not completed required trainings ensure that these are carried out with mandatory attendance required prior to commencement of next shift.

7. Conclusion: Given that nature of Mantra-care, the company feels that the above plan forms a comprehensive basis for running the daily operations. Mantra-care accept that the operations plan requires regular review to ensure that the company is meeting its strategic aims.

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References:

Abell, D. (1980). Defining the Business. Englewood Cliffs, NJ: Prentice-Hall.

APICS (2011). Certified Supply Chain Professional Learning System. (2011 ed.). Versiona 2.2. 1-6

Alhogail. R. (2011). Self-audit in plastic surgery: toward total quality management of personal professional practice. Journal of Craniofacial Surgery, 22(2), 409-414.

Al-Hogail, R., Al-Shlash, S., Helmi, A., Jad Alkareem, J., Mirdad, I., Abdulmannan Khan, M.,

Abu Al Hamail, A. (2010). Total quality management in plastic surgery. Journal of Craniofacial Surgery, 21(1), 10-19.

British Association of Aesthetic Plastic Surgeons [Online] Available from: http://baaps.org.uk/ [Accessed 9 October, 2014].

Barnett, N. (2014) Creating Customer Value: Operations, [Lecture to MBA], BMBA709.1:Creating Customer Value. University of Westminster. 17th October, 2014

Crosby, B (1980) Quality Is Free: The Art of Making Quality Certain. Mass Market Paperback

Ferdows, K., and De Meyer, A. (1990). Lasting improvements in manufacturing performance: In search of a new theory. Journal of Operations Management, 9 (2), 168-84.

Guardian UK Cosmetic Surgery statistics 2013: Which are the most popular? [Online] Available form: http://www.theguardian.com/news/datablog/2014/feb/03/uk-Plastic-surgery-2013-most-popular [Accessed 9 October, 2014]

Hardley, L. ed.(2013) Creating Customer Value 2nd Edition. McGraw Hill: UK.

Jacoby, David (2009). Guide to Supply Chain Management: How Getting it Right Boosts Corporate Performance. The Economist Books (1st ed.). Bloomberg Press.

Johnson, J., Scholes, K., and Wittington, R. (2005) Ecploring Corperate Stretegy, 7th ed, FT/Prentice Hall, Harlow.

Johnston, R., Clark, G., & Shulver, M. (2012). Service Operations Management: Improving Service Delivery. Pearson Education, Harlow.

Joint Committee on Surgical Training [Online] Avialable from: http://www.jcst.org/quality-assurance/documents/cct-guidelines/benchmarking-guidelines-for-st6-trainees-in-plastic-surgery[Accessed 20 October, 2014].

Rother, M (2010). "6". Toyota Kata. New York: MGraw-Hill.

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http://www.jcst.org/quality-assurance/documents/cct-guidelines/benchmarking-guidelines-for-st6-trainees-in-plastic-surgery

http://www.jcst.org/quality-assurance/documents/cct-guidelines/benchmarking-guidelines-for-st6-trainees-in-plastic-surgery

http://www.theguardian.com/news/datablog/2014/feb/03/uk-


Shepard, D. (2014) Creating Customer Value: Economics, [Lecture to MBA], BMBA709.1: Creating Customer Value. University of Westminster. 4th October.

Slack, N., Brandon-Jones, A., and Johnston, R. (2009). Operations Management, 4th ed. Perason Education: Harlow.

Webber, L., and Wallace, M. (2007). Quality Control for Dummies. Wiley Publishing: New Jersey.

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http://books.google.com/books?id=9BWkxto2fcEC&pg=PA43


Appendix 1

Average revenue for a firm based on table price and a hypothetical market.

Pricings of different surgeries and techniques UK:

Cost of liposuction in the UK £2,500-£2,837

Breast reduction costs in the UK UK price range: £5,110 - £5,507

UK prices for upper and lower eyelid surgery £1570- £3980

Rhinoplasty £3,000 - £4,000

Rhinoplasty COMPLEX 2hrs From £6100

UK prices for a face lift £5650- £7235

UK prices for Tummy tuck / abdominoplasty £4960 - £5350

Consultation £200 - £500

Spider Veins £150 - £750

Sclerotherapy £150 - £250

Ear pinning TBA

Brow Lift £800 - £1200 Enquire

Cheek Implants £600 - £1200

Dermal Fillers £150 - £700

Facelift £5000-£7000

Hair transplant £3000-£5000

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Appendix 2

APPENDIX 2

Year 1Number of calls, meetings, treatments

Reducing productivity year 1

BEP Efficiency Utilization

Number Staff

CallsGeneral Meeting

Meeting pre operation

OperationsHours per day

Number of work day

Design CapacityEffective Capacity

1 General Staff 2 3 8 252 12,096 -40% 7,258 2 Skilled Staff 2 2 8 252 8,064 -40% 4,838 3 Doctors* 2 1 8 100.8 1,613 -30% 1,129 4 Doctors* 2 1 8 100.8 1,613 -30% 1,129 250 22% 16%

*

TIME: how many operations per 1 hour

Doctors are part time, they work 2 days per week

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Mantra Care Assignment