Capacity Management for a New Startup Venture – Shouldice Hospital

Capacity Management for a New Startup Venture – Shouldice Hospital

Business components that have presented problems for Shouldice

People

The business component of people posed a problem for Shouldice Hospital. This is because of the increasing number of patients that the hospital was receiving while it had limited space and staff. Additionally, the staff at Shouldice does not have much flexibility. The surgeons and surgeon assistants operate in a highly specialized field and do not desire to be cross-trained or trained in any other fields. The operations in Shouldice Hospital are carried out by both full-time and part-time surgeons. The number of surgeons was only twelve for the full-time surgeons and seven for the part-time surgeons. The part-time surgeons act as assistants to the full-time surgeons. The time taken by the surgeons to prepare and perform each hernia operation is one hour.

Facility and process

A facility as a component of business was another problem for Shouldice Hospital. The hospital facilities no longer seem enough for the ever-expanding number of patients. However, there is a determination to increase the number of available beds by 50%. This was projected to the number of patients that the hospital could take in at a time, increasing the number of surgeries being done.

Shouldice faces a paradox of change, which makes the process yet another problem. The description shows that the hospital is carrying out its activities at its best level of operation given that it is a service company that does not have much flexibility and has a specialized workforce, yet they do not seem to be able to meet the market niche demands. Increasing the capacity of the hospital might be the best option for the hospital, although it might reduce the service quality and upset the workforce. Failure to meet the market demand may also invite competition and reduce the market share of Shouldice Hospital.

Steps to avoid similar problems

Understand the market

Any company intending to launch a product should be sure the visions it has are shared by the customer audience and the intended market. A product may be great, but if it does not fit, getting customers to accept it would be a challenge, which might cause the startup to fail. Sometimes, finding the right product market is not about confirming whether a market exists but rather about discovering the contributions a product can make to the market. The customer landscape should be understood fully (Fallon, 2015).

Identify the Goals

Defining success is impossible without setting up the objectives you want to achieve. During a product launch, the goals are likely to be lesser compared to the business goals, but it serves as a stepping stone to actualize some of the objectives (Fallon, 2015). The goals of a product launch should be aligned with the overall growth plan of the business.

Measure the Results

It is imperative that a business team understand what a successful launch will look like (Fallon, 2015). What is even more important is the ability of the team to measure the success. Striving to achieve the set goals is great, but a business should be able to track and analyze any upcoming data. The strategy to make this possible is going back to the goals and measuring the outcomes of the initiatives according to the goals.

Value of accurate forecasting on service quality and growth potential

Forecasting can take place in three context types: demand, supply, and price forecasting.

Demand forecasting: Investigates the demand of a company for a product.

Supply forecasting: investigates the information about the current suppliers and producers and the political and technological trends which might affect an organization.

Price forecasting: investigates and analyzes the demand and supply providing a prediction of estimated long and short-term prices and an explanation for the trends.

Demand forecasting is essential in the determination of the gap between the required and actual capacity of a hospital. Demand forecasting enables the difference between the two to be reduced, thereby improving access and continuity of care (Heroman, Davis & Farmer, 2012). Capacity management is an essential factor in demand forecasting. Aspects that demand forecasting incorporates include;

• • Number and types of appointments
  • Examination rooms
  • Hours
  • Flow of patients
  • Access to PCM teams for services and advice.
  • Access to the clinical information.

The capacity of health facilities depends on the availability of the providers, the appointments that have been scheduled, and the visits that doctors can carry out to satisfy the demands of the patients (Heroman, Davis & Farmer, 2012). Another important factor is the provider template management, which ensures that the capacity of appointments meets the demand. Demand pressure or demand forecast drives capacity management. When carrying out provider scheduling, the top consideration is the demand, for instance, the number of appointments, vacations, and conferences, among others. Demand forecasting simplifies the types of appointments. As a result, the clerks can organize the appointments according to priority and fill them accurately and efficiently.

The market target for Shouldice Hospital was individuals with the potential to recover and heal fast. They were the ones with the most common type of hernia. The hospital did not anticipate the relatively complicated cases that involved patients suffering from other health problems. If the Hospital carries out demand projection, they will be able to estimate the number of staff that the current situation requires. They will be able to determine how much expansion should be done on the hospital facility. Other equipment that patients need, such as hospitals, will be able to be estimated correctly, thereby maximizing the potential for the hospital.

Demographics of Shouldice Patients

Shouldice Hospital was developed during World War II with the aim of assisting men unable to be accepted to military service due to a condition called hernias. Doctor Shouldice had a technique that improved the recovery time and the results of surgery. The patients that Shouldice Hospital targeted were as follows: the patients who did not have any other medical conditions apart from hernias and were in perfect health. By focusing on healthy individuals, the hospital was able to minimize any addition of expensive equipment in other areas of diagnostic medicine. Shouldice Hospital benefited from their specialization because no to their health providers joined the practice. The age of the patients targeted by Shouldice Hospital was mainly adults who were capable of joining the army. Most of which were men.

Target market to enhance the success of our startup

Performing an assessment of target markets does not include the exclusion of patients who are not in a specified business plan. Target marketing assists in determining the consumer characteristics of the population that will have a high likelihood of seeking medical care, thus making the business to be successful. The projection the target market offers enables the community to develop new ideas and attract new patients. The factors that the target market focuses on are the determination of care needs, ethnic background, occupation, gender, income level, location, and age.  Other additional aspects that the target market may focus on include the psychological target market, such as lifestyle, behavior, and hobbies.

segmentation	Segmentation criteria	target Market
Geographic	Region	Domestic/International
	Density	Urban/rural
Demographic	Age	All ages
	Gender	Males & Females
	Life-cycle stage	Bachelor Stage: young, single people not living at home Newly Married Couples: young, no children Full Nest II: youngest child six or over Infants
	Income	Low and middle
	Occupation	Students, employees, professionals
Behavioral	Degree of loyalty	‘Hardcore loyal’ and ‘Switchers’
	Benefits sought	Cost benefits, time efficiency
	Personality	Easygoing & careless
	User status	Potential and regular fast food eaters
Psychographic	Social class	Lower, working, and middle classes
	Lifestyle	Resigned, Struggler, and Mainstreamer individuals. This

How to know when to stop growing

You have a product

When a startup no longer talks to people about what they could be doing but instead what they are doing, then it is time to outgrow the start-up phase. At this point, the company is producing something solid, not just ideas. The focus is to produce iterations and newer evolutions of the product as it enters the market.

You have proven sales

A business can prove its market potential through its sales. The magic number is usually $1 million in revenue. When a startup is receiving revenue of that amount then the goals should be focused ahead (Enterprenuer, 2015). The future of such a start-up is $5 million or even $50 million.

You have independence

In the startup phase, a company receives funding from different sources. This is used for testing the ideas on the much-needed technology. The company needs to test out early prospects in order to reach new markets. When the company has now become completely independent, it should consider moving out of the start-up phase. The company can now make enough to sustain itself.

You have a lower risk.

In the early stages of a start-up, all that is focused on is risk management. There is little or no revenue whatsoever, and the company runs on an unproven model with no funds to back up the venture (Enterprenuer, 2015). When the start-up has proven a record and developed a definite plan, the risks start dropping. Every organization has risks. The sure sign that a startup is ready to develop is when the risks are low.

You have the ability to scale

After a start-up has implemented a proven marketing plan and product, the company is now ready to grow and move out of the house. The only thing that is left is the scaling of the model that has already been put in place. The only step required is seeding money from the customers to scale the established model, production and staff. The profits will also scale as a result. Reaching the end of a start-up phase is a major milestone. Even more, work should be done.

Shouldice Should Have stopped at which point

Shouldice started slow but gained momentum with time. The services it offered were free and were targeted to those wishing to join the military but could not due to a medical condition called hernia. The founding doctor, Dr. Shouldice, saw it as his responsibility to help the potential soldiers who would serve the country in World War II. The hospital, however, started attracting patients who were not soldiers but suffering from the same medical condition. The target patients were mostly healthy people whose medical problems were singular. Patients who were civilians started booking appointments and coming to the hospital for the medical checkup concerning hernia.

The capacity of the hospital was rather small. With the arrival of more patients the hospital premises and facilitates were no longer enough. The hospital had full-time and part-time surgeons. The number of the surgeons was only twelve for the full-time surgeons and seven for the part-time surgeons. The part-time surgeons act as assistants of the full-time surgeons. The time taken by the surgeons to prepare and perform each hernia operation was one hour. At the point where the hospital was overflowing with patients, it should have marked the starting point for growth.

Metrics to measure if growth had plateaued

The number of patients that the hospital was meant for compared to the actual number of hospitals.

The number of hospital staff was optimal compared to the actually needed staff.

The size of the facility (and equipment) and its ability to contain the patients and the current state of affairs.

References

Heroman, W. M., Davis, C. B., & Farmer, J. L. (2012). Demand Forecasting and Capacity            Management in Primary Care. Physician Executive, 38(1), 30-34.

Fallon,N.(2015) Ready, Set, Sell: How to Successfully Launch Your First Product. Retrieved        from  https://www.businessnewsdaily.com/6030-product-launch-tips.html

Enterprenuer (2015). 10 Signs Your Company Has Outgrown the Startup Phase. Retrieved from             https://www.entrepreneur.com/article/250137

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Week 2 – Assignment: Examine Capacity Management for a New Startup Venture

Instructions

To any person considering the launch of an enterprise, the Shouldice Hospital story is a refreshing reminder of how startups in any field – in this case, health care – can succeed with the right ingredients and passion to excel.  This week’s readings include references to a successful startup that grew from the willingness of one individual (Dr. Edward Earle Shouldice) to respond to a recognized need.  Your challenge in this assignment is to develop a paper in which you apply the principles of capacity management and illustrate the impact of forecasting on the implementation of those principles based on the following scenario:

You and two of your closest colleagues are considering the launch of a start-up, and you believe that Shouldice’s success story is relevant to your new venture. Generate responses to several categories of probing questions as a basis for discussion.  Since your findings will be presented in a practical format to enlighten the thinking of your two potential future partners, you may forego the formality of a case analysis in favor of a document that provides clear, accurate, and actionable responses to the questions listed below.  In addition to this week’s readings, you may also use popular sources related to the Shouldice case to amplify the points you wish to emphasize in your discussion with your colleagues. If, during your writing, you discover additional areas of importance that are not triggered by these questions, feel free to include them in your paper.

1. Identify three business components (within the broad categories of people, process/facility, or technology) that presented problems for Shouldice Hospital in the late 1940s.  Define steps that your startup team might take to avoid similar problems when your service or product is launched.
2. Determine the value of an accurate forecast in terms of its influence on quality of service delivery and/or potential growth for your start-up.  In what ways would an accurate forecast of hernia repair demand influence business decisions at Shouldice?
3. Examine the demographics of Shouldice patients, such as their overall health, type of surgery required, age, etc. What target-market demographics will enhance the success of your start-up?
4. How do you know when to stop growing your start-up? How might Shouldice have determined a practical limit to economies of scale?  At what point should Shouldice have decided to stop growing?  What metrics should be monitored to determine that growth has plateaued?

Support your assignment with at least three scholarly resources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included.

Length: 5-7 pages, not including assignment cover sheet, title page, and reference page(s).  Use topic section headings for each of the questions listed above.

Your response should demonstrate thoughtful consideration of the ideas and concepts presented in the course by providing new thoughts and insights relating directly to this topic.  Your response should also reflect professional business writing and current APA standards.