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ABDUL HAMID BIN AHMAD MAULANA


100245592 KUJB MBA T32011 Managing Operation Mr. Mukunda Kumar 30th Jan 2012 Active

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EXECUTIVE SUMMARY

In a society service plays an important role in a centre of economicactivities. As a matter of Fact, for an economyto function the service organization needs to provide the infrastructure In the form of transportation,education, and health care (Fitzsimmons and Fitzsimmons, 2000). To improve the market presence,utilization and care condition several strategic decision such as additional service plans of outpatient health and partnering with physicians had been implemented. (Edlin, 2001). At the same time, the management of health care industry had started to realize that it is a vital to develop a congruent operations strategy instead of just focusing on one decision area which is structural decision., as a key to be used in a process of continuously improving for a hospitals utilization and financial performance (Buler et .,1996). The objective of this assignment is to critically evaluate the approach of the Arnold Palmer Hospital (APH) in managing its operation on the quality of medical services, processes and supply chain in both strategic and tactical perspectives. Suggestions are also given for aiming of enhancing and upgrading the current quality of services, processes and supply chain at Arnold Palmer Hospital (APH) for the purpose of realizing its philosophy of 100% patient satisfaction by implementing the Six Sigma methodology, Pareto charts and flow charts in the processes. The supply chain management of the hospital also needs to be improved by adoption of VMI system.. By doing this it would be able to increase sales, improves customer service level, increased gross margins, reduced overall inventory in supply chain, stabilized vendors production, control of the bullwhip effect, solidified customer loyalty through development of a long-term trustworthy relationship and capabilities.Nachiappan et al. (2005), improvement of overall information system

ABDUL HAMID BIN AHMAD MAULANA _ 100245592_ KUJB_MO

TABLE OF CONTENTS

1.0 2.0 2.1 2.2 3.0 3.1

Introduction Evaluation of APM approach in managing service quality Evaluation of APM approach in managing process Evaluation of APM approach in managing supply chain Development of new approach to improve service quality Development of new approach to improve the process

3.2 Development of new approach to improve the supply chain 4.0 Transformation of service quality improvement 4.1 Transformation for process improvement 4.2 Transformation for supply chain improvement 5.0 Conclusion 6.0 References 7.0 Appemdixes

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ABDUL HAMID BIN AHMAD MAULANA _ 100245592_ KUJB_MO

1.0 INTRODUCTION Arnold Palmer Hospital (APH), an affiliate of Orlando Health, based in Central Florida U.S.A. has had 22 years of history and experience as a leading womens and childrens hospital in the nation. The most advanced technology, along with compassion and dedication of the staff have made Arnold Palmer Hospital one of the most trusted names in childrens healthcare worldwide. Patients of Arnold Palmer Hospital are not only limited to U.S. citizens, but include nationalities from around the world. With the regions only Level 1 Trauma Centre for Children, Central Floridas only Air Care Team, and Mobile NICU, its recognition in several achievements and awards continue to motivate all its stakeholders towards achieving 100% patient satisfaction. Today, Arnold Palmer Hospital for Children and Women became one of the few hospitals in Central Florida United States where all the obstetrics and childrens maintained services and courtesy are combined growth and gain the chances for survival rates of high-risk new born in the United States as well as reinforce to improve raise of the higher degree of quality and value of care for both mother and babies..

2.0 Evaluation of Arnold Palmer Hospitals Approach in Managing Service Quality Patient satisfaction affects the competitiveness of a hospital among the healthcare organizations. It was created when responding to patients feedbacks and needs, treatment to patient by doctors and a continuous improvement of the service .(Zineldin, 2006). As a part of efforts to understand more on customers needs and expectation,,APH encourage their patients to give feedback about their services by giving a gift valued $200 if they are not satisfied or complain on the performance and profession of the hospital, such as the food, services, responsiveness and the cleanliness. Beside obtaining customers survey thru mail sending out to patients after one week of discharge,APH alsouse a variety of internal measures. These measures usually started at the grassroots level, where enabled the staff to see a problem and developed an effective ways to track performance. Patients have a right to comprehensive, compassionate family-centered health care provided by a knowledgeable physician-directed team. (Heizer.J & Render. B, 2006)
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Others measures Swanson carefully monitors for continuous improvement are morbidity, infection rates, readmission rates, costs per case, and length of stays. The tools she uses daily include Pareto charts, flow- and process charts, in addition to benchmarking against hospitals both nationally and in the southeast region. The result of all of these efforts has been a quality culture as manifested in Arnold Palmer's high ranking in patient satisfaction and one of the highest survival rates of critically ill babies. (Heizer.J & Render. B, 2006)

2.1 Evaluation of Arnold Palmer Hospitals Approach in Managing Processes. Arnold Palmer Hospital is also involved in national benchmark comparison against other hospitals. The benefit from this practice is that the hospital was able to increase its efficiency and quality of healthcare services in order to compete with the others. With increasing rivalry between hospitals, pressures exerted will force hospitals to increase their value in its quality and cost (Douglas and Ryman, 2003, pp.335). As Arnold Palmer Hospital took place in the top 10% in overall patient satisfaction continuously, benchmarking acts as a motivation to further improve on its performance in order to maintain its reputation. Swanson states, Part of the reason for APHs success is our continuous improvement process. Our goal of 100% patient satisfaction. But getting there means constantly examining everything we do, from patient flow, to cleanliness, to layout space, to a work-friendly environment, to speed of medication of medication delivery from the pharmacy to a patient. Continuous improvement is a huge and never-ending task. To speed up the process of attending to patients in APH, nursing stations were set up within a few feet of each 10 beds, therefore patients would be served by nurses immediately and efficiently. Furthermore, the usage of PyxisMedStation System as an inventory station to store the patients medication and act as a dispensary machine would helps the nurses swiftly obtain the correct medication for each patient.

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2.2 Evaluation of Arnold Palmer Hospitals Approach in Supply Chain

Palmer Hospital had been a long-time member of a large buying group, one servicing 900 members. But the group did have a few limitations. For example, it might change suppliers for a particular product every year (based on a new lower-cost bidder) or stock only a product that was not familiar to the physicians at Arnold Palmer Hospital. The buying group was also not able to negotiate contracts with local manufacturers to secure the best pricing. (Heizer.J & Render.B, 2008).

At APH , supply-chain opportunities often manifest themselves through the Medical Economic Outcomes Committee consists of medical and nursing staff who evaluate purchase options with a goal of better medicine while achieving economic targets. For instance, the heart pacemaker negotiation by the cardiology subcommittee allowed for the standardization to two manufacturers, with annual savings of $2 million for just this one product.(Heizer.J & Render. B, 2008) Arnold Palmer Hospital is also able to develop custom products that require collaboration down to the third tier of the supply chain. but assembled by a pack company that uses materials the hospital wanted purchased from specific manufacturers. With major cost savings,

standardization, blanket purchase orders, long-term contracts, and more control of product development, the benefits to the hospital are substantial. (Heizer.J & Render. B, 2008) APH also practices the Just-In-Time Approach (JIT), where APH keeps only the necessary stock that is needed within a period of time. Medicine or even medical devices used in the healthcare industry usually can cost a substantial amount and certain storage environment is required to keep the stock in a good condition at all times. This is to ensure an effective in inventory managementto avoid wastage of goods and also implications of unnecessary operation costs.

ABDUL HAMID BIN AHMAD MAULANA _ 100245592_ KUJB_MO

3.0 DEVELOPMENT OF NEW APPROACH TO IMPROVE SERVICE QUALITY

To further improve the service quality and meet patients satisfaction, Arnold Palmer Hospital must approach with service quality and accomplish with five performace objective of Quality, speed, dependability, flexibility and cost. (Refer to Appendix 1)
Benchmarking is an effective tool to be used which focusing on a continuously improvement on the basic processes carrying out in an organization (Bhutta and Huq, 1999; Prado, 2001; Simpson and Kondouli, 2000). It is involves of practices and investigating processes which are employed, and also developing metrics for evaluating an organization's performance (Camp, 1989)

Kamauff (2010, p.49) explains that benchmarking is the process in which an organization identifies a better services or processes of other organizations and adapting the information for improvement of its own services or processes.

Implementing in benchmarking assisting in determining a best way to increase the performance level.and developing effective strategic management plans, business reengineering and business restructuring..A quality improvement team should be formed to assist in evaluating and auditing in order to identify the weaknesses in certain area .Hence, corrective actions and would take place to improve the existing service process which can be further adopted as a parts of a standard operation procedure to be followed and as a guideline for others when carrying out the service to patients.

In addition, in enhancing the service health quality service APH should apply the Six Sigma approach as a quality control technique which is focusing in total customers satisfaction through a five phases of improvement process known as DMAIC.Six Sigma methodology collecting data
from the process and analyzing it for measurement to improve the outcome of services-oriented

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processes and production (Magnusson et al., 2004. According to , Chakrabarty and Tan (2007) Six Sigma has been implemented widely by service industries especially in financial services and healthcare industry (Antony, 2004).

According to Heizer explained below:i)

and Render (2011, p.195-196) shared similar thought that DMAIC

Define the purpose and then identifies the required process information with quality states of mind.

ii) iii)

Measures the process and data compiling. Analyze require data collection and the data to insure repeatability and reproducibility.

iv)

Improves phrase by modifying or redesigning current process and procedure to eliminate the problem.

v)

Control is the final stages of Six Sigma where the new process to make sure the performance being carried out efficiency and effectively with on goings monitoring plan.

This DMAIC can be applied as a method to reduce the cycle time from

patient-out to next-

patient-in to less than 15 minutes as a solution to optimize capacity and labor utilization and improve service levels. voice of customer (VOC) is obtained from patients in order to identify a clear critical elements about the service. under examination and it is further handled through this DMAIC stages However to ensure achieving a continuous service quality it must be monitored by implementing balanced score card as a performance measurement. 3.1 DEVELOPMENT OF NEW APPROACH TO IMPROVE THE PROCESS In APH , the Quality Improvement (QIT) team must improve its processes by using certain tools, for instance Pareto charts and flow charts.to monitor processes and would assist them to graphically spot problem areas and suggest ways to further improvement.

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The Statistical Process Control Chart is used to measure the processes inclusive

morbidity,

infection rates, readmission rates, costs per case, and length of stays. The team members must take corrective actions to resolve all the outstanding issues related to process performance. Besides, the team members must apply the Statistical Process Control technique to monitor and measure the process capability in terms of process capability index (Cp) and process performance Index (CPk). APH should have an effective system to link them together for an efficient healthcare services. For instance by implementing an electronic medical records (EMR) which able to connects the network of physicians and clinicians for an effective communication.This enables transfer of information or knowledge and reasonable pricing practice can be adopted through the large network (Kumar et al, 2009). Arnold Palmer Hospital should not change suppliers for a particular product every year or stock only a product that was not familiar to the physicians. APH must carry out the vendor selection and improve the current processes involved in the changing of suppliers for a particular product every year based on a new lower-cost bidder to prevent prevent and reduce the number of changing supplier so that both the processes and service quality could be improved. In Heizer and Render (2011,p.465-466) explained that supplier selection should go for three processes which are vendor evaluation, vendor development, and negotiation. In Slack, Chamber and Johnston (2007,p.406-407) had mentioned that by choosing appropriate supplier should involve trading off alternative attributes where clearly superior that the decision is self-evident and has an excellent services reputation developing a supply relationship as an investment in future capabilities. Before choosing a supplier, Arnold Palmer Hospital can source on vendor expertise and resources with a good delivering service, hence could provide a better performance. Criteria should be considered when choosing supplier include are price, quantity and delivery. In addition, it is important to consider the supplier delivery reliability, product quality and price.

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With fewer suppliers can be aiding opportunities for greater savings due to larger quantities economics of scale to benefit Arnold Palmer Hospital , building stronger relationships between buyer-vendor and this also leading to a greater commitment to success. In addition, fewer suppliers also facilitate better communication and reducing process transactions costs and therefore easier to maintain and improve ability to manage supply chain more efficiently (Greasley 2009, p.408).) Furthermore, with fewer vendor also can leads to in Just In Time (JIT) management systems that eliminating waste by producing the right part in the right place at the right time. These, move and process toward a tight integration of the suppliers and purchaser at Arnold Palmer Hospital to evolve with a continuous improvement activity and gives a way of coordinating in carrying outwork efficiently with the elements of JIT system. ( Heizer and Render (2011, p.457).

3.2

DEVELOPMENT OF NEW APPROACH TO IMPROVE SUPPLY CHAIN

Information sharing plays a vital roles in inventory management, particularly in VMI (Vendor Managed Inventory) system. VMI is essentially a distribution channel operating system whereby the inventory at distributor/retailer is monitored and managed by the

manufacturer/vendor (NACHIAPPAN et al., 2005).

According to Nachiappan et al. (2005),adoption of VMI would be able to increase

sales,

improves customer service level, increased gross margins, reduced overall inventory in supply chain, stabilized vendors production, control of the bullwhip effect, solidified customer loyalty through development of a long-term trustworthy relationship and improvement of overall information system capabilities.

According to (DISNEY et al., 2003) VMI brings a number of benefits to all parties participating in the supply chain as follows :a) the impact of demand amplification is dampened as the manufacturer now receives a direct view of end consumer demand patterns and can use this in forecasting,

ABDUL HAMID BIN AHMAD MAULANA _ 100245592_ KUJB_MO

b) cost benefits can be generating through a reduction in buffer stocks at the buyer and supplier and a more efficient use of production facilities, c) VMI in the long run can increase the profitability of both the supplier and buyer in the supply chain. Arnold Palmer Hospital can also apply another method in managing inventory effectively through a system called CPFR. which focusing on collaborative, planning, forecasting and replenishment (CPFR) It shares more information than only demand information between members of supply chain. This would allows the members to establish promotion timelines and determine when supplies need to be replenished. (Blanchard 2010, p. 164).Details CPFR in Appendix 7.4.

Arnold Palmer Hospital is also able to develop custom products that require collaboration down to the third tier of the supply chain. This is the case with custom packs that are used in the operating room., with major cost savings, standardization, blanket purchase orders, long-term contracts, and more control of product development, the benefits to the hospital are substantial. (Heizer.J &Render. B, 2006) Due to a few limitations related to its procurement policy, APH should revise the existing purchasing policy with a better policy to enable making negotiation with local manufacturers or direct suppliers without needs dealing with a middle party. This will leads to a Just In Time

supply, reduce the pricing cost and further improve the supplying process.

ABDUL HAMID BIN AHMAD MAULANA _ 100245592_ KUJB_MO

4.0Transformation for Service Quality Improvement

To continuously improving the

Quality

Manager must work together with the Quality

improvement team to accomplish and achieve the five performance objective which are quality, speed, dependability, flexibility and cost as shown in the appendix 7.1 (Slack et al, 2007, pp.910). It is important to utilize resources of the hospital effectively to obtain useful information that is needed to develop ways to increase patients satisfaction. . The Quality Manager must evaluate the current process performance and measure the performance against the five performance objectives to identify weaknesses in all areas and making corrective actions for improvement. The quality improvement team must carry out key performance indicatorsmeasurement of the process output. Feedback and voice of customer from patients must be analyzed and responded in an appropriate manner by the quality improvement team from time to time by applying the five stages of DMAIC. The Quality Manager and Improvement team must work in a team to establish a standard service quality to be practiced by all nurses. Training must be conducted to equip an excellence service skills and to standardized the practice to all the nurses before they can carry out the duty. The Quality Manager must evaluate the performance of each nurse to ensure that they are delivering the standard services which is aligned with the organization objective. The best performers can be rewarded as a tool to motivate them and others to increase work performance.. 4.1 Transformation for Process Improvement

All processes must be controlled and monitored closely by the Quality manager in order to achieve the goal successfully.The Quality Manager must apply the Statistical Process Control (SPC) Chart to monitor the hospital processes such as morbidity rate, infection rates, readmission rate, costs per case and the length of stay in the hospital.

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The Quality Performance team will assist in measuring the performance of all the processes and using the Control Chart to determine whether the process is under stable control. If the process is out of control, an immediate change is required to reduce further damages occur. Arnold Palmer Hospital can also enhancing its system by implementing the system of electronic patient record (EPR) for the store and recording of patients information. Healthcare staffs will then be able to retrieve and provide patients on the results of their treatment and appointment more effectively and efficiently. In addition, internet connection is important to provide an effective communication between the healthcare staffs and patients through a webpage for Arnold Palmer Hospital. However, IT team are to ensure that the official webpage is securedto protect the patients confidential information which requirethem to login with username and password. Through the webpage, new treatment plans and findings can be communicated with the patients, moreover it will be easier for healthcare staffs to track patients over time for research and continuous improvement of medical services (Ferlie and Shortell, 2001, pp. 281315). The Top Management must work with the Medical Economic Outcomes Committee to set up a new procurement committee team which consists of a different group of medical doctors and nursing staff. Thus, the committee would be able to do the right selecting of suppliers which are familiar with the physician at APH.

4.2 Transformation for Supply Chain Improvement The top management of Arnold Palmer Hospital must work with other hospitals in the healthcare industry to decide on the qualified suppliers for a particular product each year through discussions. Assessment on the suppliers and respective products should be done before decision-making process to approve any supplier. Meetings of the associates in healthcare industry should be held to create a joint network to exchange opinions and work hand-in-hand to get the best prices of products.

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This is because such collaboration as a group allows individual healthcare providers to create joint strategic competencies that are valuable to the buyer which consequently increase the buying power and level of performance (Douglas and Ryman, 2003, pp.337). The Top Management must work with all Procurement Committee memebers in selecting and approving the certain qualified suppliers fora particular product every year through vendor evaluation, vendor development, and negotiation based on criterias of Cost-based Price Model, Market-Based Price Model and Competitive Bidding.

5.0 CONCLUSION Through a critical evaluation of the current approaches practicsed by the management of APH it shows that the hospital requires new approaches in all aspects for further improvement.

The service quality in Arnold Palmer Hospital should be improved further to meet the patients needs and expectation. To achieve this objective the management needs to enhance its service quality process through the five stages of DMAIC in Six Sigma. All the stages must be

conducted effectively by the Quality performance team to accomplish the five performance objective which are quality, speed, dependability, flexibility and cost.. The existing process of the hospital also requires new approach for further improvement. The Hospital should measures the performance of the existing processes by applying a certain tool like Pareto charts or flow charts. to monitor processes which would be assisted them to graphically spot problem areas and suggest ways on how to resolve it. Effective supply chain management is a vital to ensure the beginning process of supplying until the end of producing services is efficiently carried out to ensure the outcome of services would be able to satisfy the customers. To achieve this goal the APH needs to implement new approach in their supply chain management.

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For instance by adoption of VMI system, it would be able to increase the sales, improves customer service level, increased gross margins, reduced overall inventory in supply chain, stabilized vendors production, control of the bullwhip effect and solidified customer loyalty through development of a long-term trustworthy relationship and improvement of overall information system capabilities.

The implementation of all new approaches must be supported with full commitment from all Employees in the hospital. The Quality improvement team must play its important role effectively in evaluating and assessing the overall performance of the whole organization through KPI and ensure corrective actions are in place for a continuously improvement towards achieving the hospital philosophy of 100% patient satisfaction.

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REFERENCES
Antony, J. (2004), "Six Sigma in the UK service organizations: results from a pilot survey", Managerial Auditing Journal, Vol. 19 No.8, pp.1006-13.

Blanchard, D. (2010) Supply Chain Management Best Practices. 2nd edn. New Jersey: John Wiley & Sons, Inc Buler, T.W., Leong, G.K., Everett, L.N., 1996. The operations management role in hospital strategic planning. Journal of Operations Management 14, 137156.
Bhutta, K.S., Huq, F. (1999), "Benchmarking best practices: an integrated approach", Benchmarking, Vol. 6 No.3, pp.254-68. Camp, R.C. (1989), Benchmarking: The Search for Industry Best Practices that Lead to Superior Performance, ASQC Press, Milwaukee, WI, . Chakrabarty, A., Tan, K.C. (2007), "The current state of Six Sigma application in services", Managing Service Quality, Vol. 17 No.2, pp.194-208.

Disney, S.M. and Towill, D.R. The effect of vendor managed inventory (VMI) dynamics on the Bullwhip Effect in supply chains. International Journal of Production Economics, No. 85, p.199-215, 2003. Douglas, T.J. & Ryman, J.A, (2003) Understanding Competitive Advantage in the General Hospital Industry: Evaluating Strategies Competencies, Strategic Management Journal, Vol 24, Iss 4, pp.333-347. Edlin, M., 2001. For the modern IDS, less is often more. Managed Healthcare Executives 11 (3), 2630. L.X. Li et al., Journal of Operations Management 20 (2002) 389408 Fitzsimmons, J.A., Fitzsimmons, M.J., 2000. Service Management: Operations, Strategy, and Information Technology. McGraw-Hill, Boston. Ferlie, E.B & Shortell, S.M, (2001) Improving The Quality of Health Care in the United Kingdom and the United States: A Framework for Change, The Millbank Quaterly, Vol. 79, Iss. 2, pp. 281-315.

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Greasley, A. (2009) Operations Management. 2nd edn. West Sussex: John Wiley & Sons Ltd. Heizer, J. & Render, B. (2008) Operations Management. Ninth Edition, London: Pearson/Prentice Hall, pp.204-205. Heizer, J. & Render, B. (2011) Principles of Operations Management. Eighth Edition, Boston: Pearson. Kamauff, J. (2010) Managers Guide to Operations Management. New York: McGraw-Hill. Kumar, S., Ghildayal, N.S. & Shah, R.N., (2009) Examining quality and efficiency of the US healthcare system, International Journal of Health Care Quality Assurance, Vol. 24 Iss: 5, pp.366-388.
Magnusson, K., Kroslid, D., Bergman, B. (2004), Six Sigma: The Pragmatic Approach, 2nd ed., Student Literature, Lund,

Nachiappan,SP< Jawahar,N<Calwin Parthibaraj,S and BRUCELEE Performance Analysis of Forecast Driven Vendor Managed Inventory System. Journal of Advanced Manufacturing Systems, Vol. 4, No. 2, p.1-18, 2005.
Prado, J.C. (2001), "Benchmarking for systems", Benchmarking, Vol. 8 No.1, pp.62-9. the development of quality assurance

Simpson, M., Kondouli, D. (2000), "A practical approach to benchmarking in three service industries", Total Quality Management, Vol. 11 No.4-6, pp.623-30.

Slack, N., Chambers, S. & Johnson, R. (2007) Operations Management. Fifth Edition. New York: McGraw-Hill.
Zineldin, M. (2006), "The quality of healthcare and patient satisfaction: an exploratory investigation of the 5Qs model at some Egyptian and Jordanian medical clinics", International Journal of Healthcare Quality Assurance, Vol. 19 No.1, pp.60-92.

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Appendix 7 1: Five (5) Performance ObjectivesTo Be Achieved By APH: ITE M (1) Quality (Figure 2.4-P.40) o Patients receive the most appropriate treatment. o Treatment is carried out in the correct manner. o Patients are consulted and kept informed. o Staff are courteous, friendly and helpful. (2) Speed (Figure 2.5-P.42) o The time between requiring treatment and receiving treatment kept to a minimum. o The time for test results, X-rays etc. to be returned kept to a minimum. (3) Dependability (Figure 2.6-P.44) o Proportion of appointments which are cancelled kept to a minimum. o Keeping to appointment times. o Test results, X-rays etc. returned as promised. (4) Flexibility (Figure 2.7-P.47) o Product/Service Flexibility-The introduction of new types of treatment. o Mix Flexibility-A wide range of available treatments. o Volume Flexibility-The ability to adjust the number of patients treated. o Delivery Flexibility-The ability to reschedule appointments. 5 (5) Cost (Figure 2.8-P.49) o Technology and facilities costs. o Bough-in materials and services. o Staff costs.

Source : Operations Management (Fifth Edition-2007) By Slack, Chambers & Johnston, FT/Prentice Hall, Chapter 2 (P.39-40)

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Apendix7.2:QualityTools

Source : Operations Management (6th Edition), By Russell & Taylor III, John Wiley & Sons. Inc. Pg.60

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Appendix 7.3: Process Improvement

Source: Operations Management (8th Edition), By William J. Stevenson, McGrawHill/Irwin 2005, p.406.

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Appendix 7.4: A Nine-Step Program for CPFR

1. Develop a front-end agreement. The retailer/ distributor and manufacturer establish guidelines and rules for the relationship. 2. Create a joint business plan. The manufacturer and retailer create a partnership strategy and then define category roles, objectives, and tactics. 3. Create a sales forecast, based on the retailers point-of-sale (POS) data and other information. The sales forecast is then used to create an order forecast. 4. Identify exceptions for the sales forecast. The partners identify items that fail outside sales forecast constraints set jointly by the manufacturer and retailer/ distributors. They then develop a list of exception items. 5. Resolve/ collaborate on exception items. The partners then submit an adjusted forecast. 6. Create an order forecast. The partners combine POS data, causal information, and inventory strategies to generate a specific order forecast that supports the shared sales forecast and join business plan. This allows the manufacturer to allocate production capacity against demand while minimising safety stock. It also gives the retailer increased confidence that orders will be delivered. 7. Identify exceptions for the order forecast, based on the predetermined criteria established in the front-end agreement. 8. Resolve/ collaborate on exception items. As with step 5, the partners then submit another adjusted forecast. 9. Generate the order. The order forecast becomes a committed order.

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