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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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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

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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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