Session 1 What is a business process

1
Session 1 What is a business process?

• Gest D201 Session 1 (14 Mars 2007)
• Introduction to Industrialisation
• Hospitals and Henry Ford
• Video Case The Shouldice Hospital
• (www.shouldice.com)

2
Shouldice Hospital discussion Outline

• Business concept
• business process
• customer offer
• performance
• Contrast with general hospital
• Key concepts Focus lean thinking
• Positioning of process focus in the
  Product/Process matrix with examples

3
Shouldice Business Concept
Integrated Medical Service MIND AND BODY
Medical
Social

• Focus on simple hernias
• Optimize the process
• Offer check-ups and follow-up

• Involve patient and his cohort
• Club Med experience
• Create a network for life

4
Shouldice Business Process 4 Day Lead Time
If not OK
Day 1
Tea cookies at 9 pm
If OK Check-in admin
Explain process steps
30/36 Arrivals 13 pm
Dinner at 6 pm
Check by MD (15 mins)
Blood test
Day 2
Start eating moving
Tea cookies at 9 pm
Local anaesthesia (-20mins)
Dinner at 6 pm
Rest in room (2-3hrs)
Surgery (40 mins)
Day 3
Tea cookies at 9 pm
Dinner at 6 pm
Loosen stitches
Walk, play, eat with your buddies
Day 4 Remove stitches, walk, play, eat, check
out ?
5
Shouldice Patient Experience
Speed ?
Quality ?
Cost ?

• Fast operation
• Fast recovery

• Technical quality
• recurrence rate lt1
• Customer satisfaction
• expectations exceeded!

• Low real cost
• Low opportunity cost

Flexibility ?

• No customer variety
• only simple hernias
• Everyone is subservient
• to the process

6
Comparison with a general hospital
Shouldice the simplest
General Hospital the most complex
Low
High
Hernia complexity

• Shouldice General Hospital
• MDs
• People
• Technology
• Equipment
• Administration
• Sales force

7
Comparison with a general hospital
Shouldice the simplest
General Hospital the most complex
Low
High
Hernia complexity

• Shouldice General Hospital
• MDs Technicians/very focused
  Specialists/broad range
• People Process driven Task driven
• Technology Single/explicit Multiple/tacit
• Equipment Limited/fit to purpose
  Flexible/excess equipment
• Administration Few/support Many/control
• Sales force Alumni/word of mouth Prof
  networks/influence

8
Process Focus summarized The Lean Entreprise
9
Process Focus summarized The Lean Entreprise
10
FOCUS at Shouldice the Results

• BREAKTHROUGH service
• speed and quality and cost (no trade-offs!)
• CLEAR INDUSTRIAL CHOICES
• inflexible no variety!
• Very High SATISFACTION
• for patients AND staff
• A PARADOX
• a well mastered process
• yet Everyone feels different!

11
Issues for Shouldice

• Expansion?
• How to expand without losing process
• integrity and performance?
• Can we grow through franchising?
• Do we need to adapt this model in
• other countries?
• Overtaken?
• e.g. micro-surgery on out-patient basis ?
• mesh technology ?
• Innovation?
• Can we apply this method to other
• medical services?

12
Product-Process (later Business Model) matrix
industrialisation
Product
High customisation Low volume High unit margin
High standardisation High volume Low unit margin
Process
Flexible (or Functional) Job Shop
Rigid Line Flow (e.g. assembly line)
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Competition Stay on the diagonal, or move below
the diagonal but never above !!!
Service offer
Wish of marketing customisation!
Supply Process
Customisation Low vol/hi margin
Standardisation Hi vol/ low unit margin
Flexible (or Functional) Job Shop
Rigid Line Flow (e.g. assembly line)
Wish of Operations rigid systems!
14
Competition Production/Marketing interface
Product
Wish of marketing customisation!
High customisation Low volume High unit margin
High standardisation High volume Low unit margin
Process
Flexible (or Functional) Job Shop
Wish of marketing customisation!
Rigid Line Flow (e.g. assembly line)
Wish of Operations rigid systems!
Mass customisation, Flexible manufacturing
systems a dream ? ?
Wish of Operations rigid systems!
15
3 X 3 P/P Matrix in the Food Industry
Product
High custom High unit margin Low volume
Some custom Avge margin Med volume
Low custom Low unit margin High volume
Process
Job shop
Batch flow
Assembly or Continuous flow
16
P/P Matrix in the Hotel Industry ACCOR
P r o d u c t / S e r v i c e
Business Process
Yes ?
No ?
Luxury
Comfort
Minimal
Basic
Job shop Flexible
Flow line Inflexible
17
Shouldice Process Life Cycle (40 years of
Shouldice technique)

• Phase 1 Result of 30 years of experience
  LEARNING
• and PROBING with the Shouldice formula
• Phase 2 DEFINING the Shouldice process
• IMPROVING process performance
• Phase 3 Process improvement becomes more
• difficult LIMITS TO IMPROVEMENT appear
• Phase 4 Innovation then continues at the
• INTERFACES (alumni, internet, early visits, )
• Phase 5 Process OVERTAKEN (often by a
  competitor)

18
S-curve process life cycles
Technology Performance
?Maturity settles in
?Competition shifts to process features cost,
quality, speed
?Limits to improvement appear
?Probe learn
? Dominant design emerges (ind standard)
Improvement Effort
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Some Key Lessons

• The Process View
• The Lean Enterprise obsession about eliminating
  waste
• Clear focus in business decisions leads to
  superior performance
• But, limits to flexibility, risk of (market or
  technical) obsolescence, or routine
• Business strategy is about deciding what solution
  to offer (product or service offer), to whom
  (segmentation), and how to deliver it (supply
  process)

PROCESS
Outputs
Inputs
Product
Low volume Customized
High volume Standardized
Flexible
Process
Rigid Flow