OPERATIONS MANAGEMENT THEORY

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EXECUTIVE SUMMARY

            Ramsey Healthcare is an organization that offers healthcare services to individuals in the UK. The company was founded by Paul Ramsey who was an Australian businessman in 1964 (“Overview – Ramsay Healthcare UK Operations Limited – NHS,” 2018). The company has progressively expanded becoming the international hospital it is today with branches in numerous countries including France, the UK, Australia, Malaysia, and Indonesia among others. In fact, the company has 151 hospitals operating under the Ramsey healthcare umbrella (“Overview – Ramsay Healthcare UK Operations Limited – NHS,” 2018). The company has expanded mainly through acquisition and branch opening in strategic areas of operation.

            Maintenance of pharmaceutical stock among other hospital requirements is an important task in healthcare. Healthcare materials are time sensitive and have to be in stock whenever required as timeliness can make the difference between saving the life of a patient and losing them. This has therefore led to the challenge of sock levels where some areas are forced to hold excessive stock to prevent the risk of running out of the materials when they are required. In the hospital, there has emerged a need to come up with clear-cut guidelines to be followed to deal with the problem of medical supplies to minimize wastage and ensure efficiency in all areas. Although the hospital has numerous branching this report focuses on the staff accountability program that has been incorporated in the organization to help improve quality of healthcare and reduce wastage at the same time through the lean thinking program incorporated into the system.

The primary focus of this project is to enhance operational efficiency in the hospital through improved staff professional responsibility. The project aims at improving the quality of services provided to the patients; as well as reducing wastage in the hospital through proper management of resources and provision of lean management practices in equipment and drugs. As a result, the project is expected to help in preventing the expiry of drugs and errors caused by negligence. Proper business process reengineering will be incorporated in this area to help achieve the goal of highly skilled professional staff that are diligent in their duties. The task focuses on a training program geared at improving staff responsibility to ensure quality through the six-sigma model and proper resource usage through the lean healthcare process model. The six sigma model has been incorporated in the project to enhance operational management. In project improvement, the six-sigma model will be incorporated using two main techniques which are the define, measure, analyze, improve and control (DMAIC) and the define, measure, analyze and verify (DMADV) models. The DMAIC model will be incorporated when starting a new project as it is aimed at improving existing processes by bringing up strategies that are aimed at improving the efficiency of the existing systems in terms of quality.

Table of Contents

EXECUTIVE SUMMARY.. 2

Introduction. 5

Context 6

Aims and objectives. 7

Assumptions and limitations. 8

Six-sigma approach. 9

Define. 9

Measure. 10

Analysis. 11

Improve. 11

Control 12

SWOT Analysis. 13

Strengths. 13

Weaknesses. 13

Threats. 14

Opportunities. 14

Risk analysis. 15

Recommendations. 16

Gantt chart 17

Conclusion. 19

References. 20

Introduction  

Ramsey Healthcare is an organization that offers healthcare services to individuals in the UK. The company was founded by Paul Ramsey who was an Australian businessman in 1964 (“Overview – Ramsay Healthcare UK Operations Limited – NHS,” 2018). The company has progressively expanded becoming the international hospital it is today with branches in numerous countries including France, the UK, Australia, Malaysia, and Indonesia among others. In fact, the company has 151 hospitals operating under the Ramsey healthcare umbrella  (“Overview – Ramsay Healthcare UK Operations Limited – NHS,” 2018). The company has expanded mainly through acquisition and branch opening in strategic areas of operation.

The Ramsey healthcare organization in the United Kingdom is comprised of 36 units that offer varied healthcare treatment options to patients (“Private Hospitals Alliance PHA (Formerly Known as H5) – Ramsay UK,” 2018). Since the hospital caters for a large group of patients, they have had several operational issues that need to be addressed in order to ensure smooth running in all operations and maintenance of high-quality services. Among the issues faced in the health sector in the world today is the problem of material shortage and control of hospital stock to prevent wastage and redundancy. In the past decade, Ramsey healthcare has grown by a significant percentage and thus requiring proper operational management to enhance efficiency in this area. The hospital has, therefore, come up with a lean thinking strategy to help overcome the issue of material wastage and expiry of drugs in storage. The lean health initiative is a project that is expected to be run in the hospital for a full year to measure its effectiveness in improving operational efficiency and helping in reduction of wastages in the hospital.

Maintenance of pharmaceutical stock among other hospital requirements is an important task in healthcare. Healthcare materials are time sensitive and have to be in stock whenever required as timeliness can make the difference between saving the life of a patient and losing them. This has therefore led to the challenge of sock levels where some areas are forced to hold excessive stock to prevent the risk of running out of the materials when they are required. In the hospital, there has emerged a need to come up with clear-cut guidelines to be followed in order to deal with the problem of medical supplies to minimize wastage and ensure efficiency in all areas. Although the hospital has numerous branching this report focuses on the staff accountability program that has been incorporated in the organization to help improve quality of healthcare and reduce wastage at the same time through the lean thinking program incorporated into the system.

Context

Since operational management involves streamlining all business processes to ensure they are aligned with the strategic goals set. This study shall focus on an analysis on the integration of the staff accountability program; using business process redesign that comprises lean procedures and the six-sigma model to ensure efficiency in the management of hospital resources and provision of high-quality services to the patients. In this area, the focus is on primary services whereby the task will look at primary equipment, medication, and personnel required for effective deployment of services to individuals in a practical manner without straining the service. The task focuses on a training program geared at improving staff responsibility to ensure quality through the six-sigma model and proper resource usage through the lean healthcare process model (Runciman, Merry, and Walton, 2017). A research conducted on the quality of services offered and causes of death in patients have shown a significant decline in quality caused by the negligence of members of staff to the patients. It is therefore critical to reevaluate the program on staff professional accountability and ensure the program is geared towards risk reduction and improved efficiency (Cagliano, Grimaldi, and Rafele, 2011 pp.695). This issue especially raised warning flags when some patients in the theatre were reported to have died due to an overdose in medication.

Management of quality in an organization is based on not only the usage and storage of resources but also the responsibility and attitude of workers (Cagliano, Grimaldi, and Rafele, 2011 pp.703). At Ramsey hospital, the identified problem is on wastage of hospital resources due to poor resource management as well as lack of professional responsibility among staff member. Integration of the staff accountability program is a service that can help in dealing with this issue. The staff accountability program has successfully been used in other service provision industries such as the hospitality sector successfully and is thus a best practice that can be integrated (Aronsson, Abrahamsson, and Spens, 2011, pp.179). In fact, it has also been used in several healthcare organizations in England to help improve service efficiency. Moreover, it is a strategy that will gradually improve the image of the hospital if incorporated successfully as it helps to cut on costs while improving overall performance provided.

Aims and objectives

The primary focus of this project is to enhance operational efficiency in the hospital through improved staff professional responsibility. The project aims at improving the quality of services provided to the patients; as well as reducing wastage in the hospital through proper management of resources and provision of lean management practices in equipment and drugs. As a result, the project is expected to help in preventing the expiry of drugs and errors caused by negligence. Proper business process reengineering will be incorporated in this area to help achieve the goal of highly skilled professional staff that are diligent in their duties (Dobrzykowski, Deilami, Hong, and Kim, 2014, pp.524). The report also purposes to reevaluate drug usage in the hospital to determine the proper sock levels that should be held to ensure they neither suffer shortage nor wastage due to the holding of inadequate or excessive stock respectively. The program integrated into this project is expected to achieve the following objectives;

1. Improve staff responsibility towards the patients during provision of care.
2. Reduce the cost of holding unnecessary resources at the organization including equipment, supplies, and drugs.
3. Improve the quality of service provided to the patients through the creation of awareness in the program
4. Ensure employee is equipped with the right knowledge by educating them on the responsibilities and speaking up against poor practices that may endanger the quality of service offered.
5. Enhancing general operational efficiency through wastage minimization and improved quality of care provided.

Assumptions and limitations

            Among the assumptions made in preparation of this report is on drug expiry where the assumptions made are that about 30% of the drugs in storage expire before they are used (“Overview – Ramsay Healthcare UK Operations Limited – NHS,” 2018). Another assumption made is on material wastage where 40% of supplies are said to go into wastage due to various factors such as expiry, machine idle time, use for the wrong purpose and use of excessive portions among other factors (“Overview – Ramsay Healthcare UK Operations Limited – NHS,” 2018). While the provision of a centralized storage system might help in dealing with the burden of wastage, it has not been considered due to the distance between the various hospital branches in Ramsey thus provided as a limitation in this study.

Six-sigma approach

            Achievement of high quality in services offered can be achieved through incorporation of the six-sigma operational management technique. This is a technique used in organizations to improve quality and maintains it at the desired level. The approach was founded by Jack Welch in 1995 when he incorporated it in general electric company to enhance operational efficiency (De Mast and Lokkerbol, 2012, pp.604). The six-sigma model is focused on the provision of measures of quality that strive to eliminate any defects to ensure quality is at a near perfection point. In project improvement, the six-sigma model is incorporated using two main techniques which are the define, measure, analyze, improve and control (DMAIC) and the define, measure, analyze and verify (DMADV) models (De Mast and Lokkerbol, 2012, pp.610). The DMAIC model is incorporated when starting a new project as it is aimed at improving existing processes by bringing up strategies that are aimed at improving the efficiency of the existing systems in terms of quality. The DMADV model, on the other hand, is used at the later stages of a project as it mainly investigates further improvement into a system where the procedure requires other strategies that go beyond improvement of the systems in operation (D’Andreamatteo, Ianni, Lega, and Sargiacomo, 2015, pp.1199).

Define

            Define presents the first stage of the six-sigma model. It is at this stage that board members are expected to meet and discuss the issue at hand to come up with clear cut guidelines on how blackbelt project objectives will be met (D’Andreamatteo, Ianni, Lega, and Sargiacomo, 2015, pp.1202). At this stage, the overall budget for the project will also be set thus starting the operational efficiency journey. The sigma six model is statistics based making it a favorable choice for this project. Through definition, the project defines the aim and expected achievements at the end of the product to determine the level of quality desired.

Measure

After the level of quality has been ascertained statistical data is required to determine the processes that should be integrated to bridge the gap between expected quality levels and quality of service at the present (Drake, Myung Lee, and Hussain, 2013), pp.3). Incorporation of employee workshops in this area has been cited as one of the best approaches in the improvement of structure and quality. In this area, two charts will be used where on will measure the level of wastage in terms of overuse and redundancy while the other will look at the number of cases per month associated with poor quality services and negligence of workers. Through the introduction of an employee responsibility and accountability workshop, an organization can change the attitude of staff members ensuring they put the needs of patients first thus improving quality of care (Loorbach, 2010 pp.171).

Table one inventories according to departments

Analysis

Safety is very important in healthcare and thus another aspect of sigma has to be put into operation which is analysis. The analysis includes a critical evaluation of data present on the project plan and the implementation through looking at milestones achieved in the project (De Koning, Verver, van den Heuvel, Bisgaard, and Does, 2006, pp.7). The analysis will measure achievements against desired results to ensure deviations are eliminated thus ensuring at the end of the project the desired quality will be achieved. The analysis stage is responsible for the identification and elimination of variations (De Koning, Verver, van den Heuvel, Bisgaard, and Does, 2006, pp.9). During this stage, resource utilization will also be analyzed to determine the optimum point for each resource thus eliminating the problem of wastage and material inadequacy at all departments.

Improve

After analysis, the project will be at the improvement stage where measures will be put in place to ensure all variations are eliminated. In this case, the elimination of variety will be done through training and follow up of employees as well as setting rigid resource control mechanisms that will help ensure productions remains at optimum levels in all occasions (Arthur, 2011). In order to maintain optimum operation levels in healthcare the value of care provided must be high with proper utilization of resources that are geared towards elimination of resource wastage in the organization (Van Den Heuvel, Does, and Verver, 2005, pp.385). Incorporation of the six-sigma model at Ramsey healthcare organization can assist significantly in the achievement of this goal.

Control

The last stage in the sigma six processes incorporate in the project is the control stage. This is the stage at which all improvements incorporated in the previous stage are measured against the expected results set during the definition stage (Tolga Taner, Sezenand Antony, 2007, pp.332). Risk factors are also measured at the control stage where the project goals are laid out and level of risk factors for both the medical practitioners and patients are determined. In this are the project will look at the level of risk and evaluate how to control the risks associated with it. The risks will be measured in terms of low-quality occurrence and probability of resource wastage (Lifvergren, Gremyr, Hellström, Chakhunashvili, and Bergman, 2010, pp.120).

Through the incorporation of the six sigma lean healthcare practices, it is evident that the organization will be able to improve in quality as far as services provided in the various departments are concerned. The process will be carried out in two main stages whereby the first stage shall include introducing strategy measurement and incorporation of quality improvement strategies. The second stage shall also use the six sigma elements to improve the strategies introduced in the organization and follow up on their implementation eliminating any variance to ensure that high quality is achieved. By using lean healthcare operations management, the company is expected to be successful in not only improving the quality of service and safety of patients but shall also help in overall cost reduction (Tolga Taner, Sezen, and Antony, 2007, pp.339). Since the model is based on reduced wastage it is bound to improve efficiency in operations thus giving the hospital a sustainable competitive advantage against other organizations in the healthcare sector (Pepper and Spedding, 2010, pp.148).

SWOT Analysis

Another crucial part when it comes to operations management is risk analysis. The method that shall be incorporated in recognition of strengths, weaknesses, opportunities, and threats facing Ramsey healthcare. SWOT analysis presents a crucial part in operational planning as it helps in determining the areas of improvement on and those that the same strategies should be retained as they are functioning as expected (DelliFraine, Langabeer, and Nembhard, 2010, pp.211).

Strengths

1. The hospital can sufficiently serve a wide range of customers and in large numbers.
2. There is stability in all healthcare operations conducted at the hospital as they have adequate customers to serve the patients.
3. The hospital has successfully incorporated an open-door policy where both the staff members and patients are able to air their comments and grievances.
4. The project ensures that all members of staff are well informed and have the right skills to enhance the expectations in terms of services and quality of care.
5. The project has successfully helped in waste minimization and improvement in efficiency of care services provided.

Weaknesses

1. Increased operational costs due to the training programs required to improve quality and enhance efficiency.
2. The project is also time-consuming and expensive in terms of finances as the organization must look for ways to replace the workers undergoing training to ensure business continuity.
3. The sigma method only focuses on improved efficiency in terms of the patient and thus neglecting the employees who may be overworked in a bid to minimize wastage and improve efficiency in the services provided.

Threats

1. The project could result in loss of jobs especially for individuals employed in the stores due to the holding of less stock and introduction of J.I.T inventory handling tactics.
2. Financial saving strategies incorporated may compromise on the availability of materials that may be required on the spot.
3. Taking staff members through the training process in shifts increases the risk of staff shortage in case of an emergency and could result in loss of life.
4. Reduction in stock levels held and resource allocation leads to minimization of flexibility options in the organization thus curtailing innovative ideas as there are no materials for practices.
5. The threat of interference from external factors such as political policies, financial status, and cultural practices

Opportunities

1. Opportunity to gain a better competitive advantage in the market due to improved efficiency.
2. Over cost reduction due to a reduction in the amount of waste and product redundancy.
3. Improving employee skills through the workshop and enhancing professionalism at the workplace through staff accountability training.

According to the SWOT analysis conducted, the project in place has numerous beneficial results for the company. The analysis also shows that the model in operation is focused on the provision of operational excellence. However, the model is not perfect and is faced by various threats and weaknesses and thus could be revised with time to enhance operational efficiency in the organization.

Risk analysis

Risk refers to the occurrence of an activity that could lead to the loss of something significant such as health, finances, or even organizational credibility among others. Risks can be explained in terms of foreseen risk that can be prevented and those that are unpredictable (Papadopoulos, Radnor, and Merali, 2011, pp.177). In this project, the primary risk is striking a balance in the level of resources allocated in every department to eliminated wastage while maintaining a good level to prevent shortages that in healthcare can lead to loss of life. Ramsey healthcare can incorporate the matric method to help address the issue of risk analysis and determine the optimal resource level for both manpower and material resources. The matrix methods are used in risk calculation includes the use of scorecards to determine the level of risk associated with each section (Osborne, Radnor, and Nasi, 2013, pp.139).

             Failure mode and effects analysis can be used to determine the scorecard used for project risk analysis according to departments (Langabeer, and Helton, 2015). The scorecard will have figures between one and ten where ten will be extremely high while one will show low levels of risk probability. The limitations associated with the scorecard risk measurement mechanism is its reliance on correctly answered questions in table completion (Langabeer, and Helton, 2015). The table below shows the scorecard to be used.

                                                                                              According to the scorecard above the department with the least risk is department two where the project remains at the same level without any changes. Since there are no chances incorporated in the project the business does not take extra risks thus maintaining the likelihood of risks occurring at a low. Option two, on the other hand, may face the risks involved with reactive control measures. These are measures that involve strategies such as retrenchment and general reduction of operations in the organization. Rather than seeking the root cause, these methods are involved in treating the symptoms and thus may have a negative influence eventually as they are based on short term goals (De Vries, and Huijsman, 2011, pp.160). The last case scenario is seen to have the highest risk factor. This may represent an option where the company engages in business process reengineering as it is an active solution that focuses on eliminating the root cause of the problem (Talib, Rahman, and Azam, 2011 pp.240). While the option has a higher risk factor it is also expected to produce better results.

Recommendations

1. The project recommendations in this area are based on the effect of the project as shown in the risk analysis. While the no change option is seen to have lower levels of risk, it has the least returns. The best option, in this case, would be the third that though it involves many risks is bound to help improve performance efficiency significantly eventually.
2. Another recommendation that can be incorporated into the project is a careful revision of the training workshop schedule. It is important to review the schedule used for employee training to ensure some areas are not left with a shortage of employees. This can be done through rotational training where each department sends a defined number for training and sends another bunch after the first are through.
3. Storage procedure for materials such as drugs should also be revised to incorporate the first in the first out model. This will help in preventing drugs and other materials from reaching expiry while they are still in storage.
4. Finally, the process can be improved through incorporation of a proper project evaluation model that presents feedback on the progress to determine the best response to be taken.

Gantt chart

Conclusion

The operational performance analysis presented follows the lean six sigma model in the determination of the techniques to be incorporated to help improve both healthcare services and management of resources. The project also involves a SWOT analysis that was used to determine the viability of the project in improving the management of resources to minimize wastage and improving quality of healthcare services offered. However, as the risk analysis and Gannt chart show, more improvement is required to ensure effectiveness in operational management in the company. Further research in this area is therefore required to help bring in more recommendations that will help in improving the process.

References

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Arthur, J., 2011. Lean Six Sigma for Hospitals: Simple steps to fast, affordable, and flawless Healthcare. New York, NY: McGraw-Hill.

Cagliano, A.C., Grimaldi, S. and Rafele, C., 2011. A systemic methodology for risk management in the healthcare sector. Safety Science, 49(5), pp.695-708.

D’Andreamatteo, A., Ianni, L., Lega, F. and Sargiacomo, M., 2015. Lean in healthcare: A comprehensive review. Health policy, 119(9), pp.1197-1209.

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De Vries, J., and Huijsman, R., 2011. Supply chain management in health services: an overview. Supply Chain Management: An International Journal, 16(3), pp.159-165.

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Lifvergren, S., Gremyr, I., Hellström, A., Chakhunashvili, A. and Bergman, B., 2010. Lessons from Sweden’s first large-scale implementation of Six Sigma in healthcare. Operations Management Research, 3(3-4), pp.117-128.

Loorbach, D., 2010. Transition management for sustainable development: a prescriptive, complexity‐based governance framework. Governance, 23(1), pp.161-183.

Osborne, S.P., Radnor, Z. and Nasi, G., 2013. A new theory for public service management? Toward a (public) service-dominant approach. The American Review of Public Administration, 43(2), pp.135-158.

Overview – Ramsay Healthcare UK Operations Limited – NHS. (2018). Retrieved from https://www.nhs.uk/Services/Trusts/Overview/DefaultView.aspx?id=769

Papadopoulos, T., Radnor, Z. and Merali, Y., 2011. The role of actor associations in understanding the implementation of Lean thinking in healthcare. International Journal of Operations & Production Management, 31(2), pp.167-191.

Pepper, M.P. and Spedding, T.A., 2010. The evolution of Lean Six Sigma. International Journal of Quality & Reliability Management, 27(2), pp.138-155.

Private Hospitals Alliance PHA (Formerly Known as H5) – Ramsay UK. (2018). Retrieved from https://www.ramsayhealth.co.uk/about/private-hospital-groups

Runciman, B., Merry, A. and Walton, M., 2017. Safety and ethics in healthcare: a guide to getting it right. CRC Press.

Talib, F., Rahman, Z. and Azam, M., 2011. Best practices of total quality management implementation in health care settings. Health marketing quarterly, 28(3), pp.232-252.

Tolga Taner, M., Sezen, B. and Antony, J., 2007. An overview of six sigma applications in the healthcare industry. International Journal of health care quality assurance, 20(4), pp.329-340.

Van Den Heuvel, J., Does, R.J. and Verver, J.P., 2005. Six Sigma in healthcare: lessons learned from a hospital. International Journal of Six Sigma and Competitive Advantage, 1(4), pp.380-388.

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