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1. What is activity utilization at every step in the process?

What is the direct labor


utilization?
In the simplest of words utilization is a measure of time spent working. It is the ratio between the
time worked and time that could have been spent working.
i.e. Utilization =

Actual time spent working Time available for work

We are specifically looking at two types of utilization here. First we will look into the utilization
for each of the departments and then we look into direct labor utilization. The details of how the
calculations were done are provided in Appendix.
Activity Utilization
For the purpose of calculating activity utilization, we look into the utilization of each of the four
departments Front office (registration and verification), X-ray and radiology, X-ray hand off
and examination. For calculations we add all the times spent by all the staffs at each department
doing their tasks and divide this sum by the sum of the total man minutes available at each
department.
From the calculation of the utilization we can see that the overall utilization of the clinic is
76.36%. This logically seems a good utilization rate but a bit higher utilization could be targeted
for.
Looking at the 4 departments individually, the examination activity looks very much utilized at a
rate of 97.6%. This department looks to be under very high pressure and a little bit of variability
in could cause lots of problems. And as we will see in the next section, the employees including
the surgeon, cast technician and senior resident are all under immense pressure with the
surgeons utilization exceeding 100%.
The front desk that is responsible for the registration, verification, collection of X-Rays and
filing/preparation of examination room is utilized at a rate of 76.02%, which is comparable to the
clinics overall utilization and cannot be called over utilized. The X-Ray and radiology
department seems to be underutilized at just about 70%. Given the very long waiting times at this
department, a serious process improvement looks essential.
Direct Labor Utilization
The surgeon is being utilized for almost 110% i.e. he has to work more than the time he is
supposed to work and hence the complaint from him about being over utilized looks fair. The
senior resident also has a utilization rate of 92.23% and can be regarded fair enough although a
comparison to other human resources and the overall clinic utilization might make them look

over utilized as well. The third member of the examination hall in the cast technician has a
utilization rate of 90.03% and is also a good utilization rate. The nurses are being utilized at a
rate of 77.05% whereas the clerks are being utilized at a rate of 74.07%.
If we consider the radiology/X-Ray department as a part of the clinic then the labor utilization
for the technicians and the radiologists are 83.44% and 69.79% respectively.

2. How is variability affecting capacity at the clinic? How can variability be controlled?
Most of the data are variable in nature based on their occurrences. Here, we are concerning about
the flow of patients in a pediatric orthopedic clinic. We cannot control the number and type of
patient flow for check up in a clinic. We can only manage and schedule the resources available in
a clinic in efficient manner so that the service could be delivered in optimized way.
Based on collected data, it shows that clinic examines about 80 patients each half of the day, of
which 60 percent returns for follow up appointment. In this case clinic can predict, in advance,
the case and its nature of about 48 patients who register for follow-up every day. According to
the exhibit 3, the bottleneck of all the process seems to be the radiology department where
patients have to wait 58 minutes on an average and also has high standard deviation of 22
patients.
The high waiting time and also a very large standard deviation shows that the variability at this
department is very high. The Radiology Department is used by the Pediatric, Urology and Chest
Clinic and the ER. This leads to varying demands that depend on patient arrivals for each
department which causes variability in the amount of time a patient has to wait to get treated.
The more patients, the more likely the wait time will increase.
One way to control this variability would be to improve scheduling of the clinic with the other
departments. Test can be performed to see when the machines are used the least amount of time
and try to schedule appointments then. Also additional equipment purchases and staff may be
considered to reduce the effect of variability.
Similarly, the nature of the X-Ray needed is also affecting the variability at the clinic.
Depending on the type of X-ray, the machine needs major adjustment. Here, the variable nature
of incoming patients affects the time taken for X-ray due to the adjustment needed to switch
between upper and lower extremities. The variable requirement of patient can, somewhat be
controlled by using each machine to take either upper or lower extremities X-Ray. The six
available machines can be dedicated to a certain type of X-Ray based on the previous data. But
the flexibility in the machines should still be retained to address situations where need do not
follow the trends.

The hospital might also think of buying a new X-Ray machine which would help reduce the
waiting time (but we cannot say for sure) and also help control variability to some extent.
However, given the cost of the new machine and more importantly given that the utilization of
the X-Ray filming process is only about 80% and the X-Ray development is only about 60%,
better scheduling can certainly give better results even with the existing number of machines.

3. Where is the bottleneck in the process? What are the capacity constraints at the clinic?
Bottlenecks are the hindrances and obstructions to the processes that cause waits and delays.
Bottlenecks interrupt the natural flow and determine the pace at which the whole process works.
In this case the bottleneck in the processes is inherent in the wait times and the utilization rates at
some of the departments and activities.
The major bottlenecks in the case are seen in the radiology department and the examination hall.
In the radiology department, the patients might have to wait up to double the time they spend at
any other department. Patients are required to wait in reception area of radiology department
until X-ray machine is available. Depending on the type of X-ray image, machine has to be
adjusted and to adjust the machine from one extremity to other it took several minutes. After Xray, patient again has to wait to collect the X-ray image on film. The radiology department is also
being used by Urology, Pediatrics and Chest clinic. Exceptions are frequently made for some
patients from Emergency who required an X-ray urgently on short notice. Hence we can find
high volume of patient in radiology department which has significantly increased the wait times
in the radiology department.
In the examination room, it was observed that the staffs are over utilized or close to being
utilized. Either the surgeon or one of the senior residents performed the medical examination of
the patient. The surgeon examined all the new patients and about 30% of follow up patients with
greater complexity. A senior resident examined the remaining follow-up patients and has a
utilization rate of more than 90%. The bottleneck has been determined to be the examination
room, where the surgeon in particular has been working over capacity at over 110%.
The demand of the services, especially at the examination room is more than the capacity.
Although the overall utilization is 97% for the examination hall, the surgeon is over utilized
representing a capacity constraint. All other departments have the capacity to handle the current
demand of 80 patients at the moment, although the variability can make the capacity seem
inadequate.

4. What is the economic cost of wait times?


As given in the case, the average annual income of for full time workers in London is $44000
which means the average income per minute is $ 0.08 (since 44000/(365*24*60)) .The
calculation given below has been made taking a confidence level of 95% i.e. 2 sigma and the
data as provided below
New Patients
Follow up Patients
Department
Total
Process Waiting Total Proces
Time
Time
time
Time s Time Waiting time
Upper limit
38
14
24
33
9
24
Front Desk
Lower limit
22
14
8
17
9
8
Upper limit
102
23
79
102
23
79
Radiology
Department
Lower limit
14
23
0
14
23
0
Hand-off of
Upper limit
7
4
3
7
4
3
X-Ray to
clinic
Lower limit
0
4
0
0
4
0
Upper limit
76
24
52
71
24
47
Examinatio
n Room
Lower limit
0
24
0
0
24
0
Upper limit
223
65
158
213
60
153
Total
Lower limit
36
65
8
31
60
8

Average
Annual
Income
Average
Income per
minute

Economic
Cost of Wait
times for one
visit

44000
0.0837

New Patients

Follow up
patients

Upper
limit
Lower
Limit
Upper
limit
Lower
Limit

13.23
0.67
12.81
0.67

Hence, the economic cost of one visit for a new patient can range from $0.67 to $13.23 and that
for a follow up patient can range from $0.67 to $12.81.

5. What recommendations would you make and why?

a. Change Clinic Timings


The clinic operation coincides with the usual office hours and hence many parents are
complaining. This could be handled by changing the clinic operating time, probably
to evening time when most of the parents would be done with their work.
b. Allow both the senior residents to check patients
The examination hall is seen to be a bottle neck. The surgeon is over utilized and
another senior resident almost utilized whereas the second resident is limited to being
a mere observer. If this is done for training purposes the clinic can place the surgeon
and one senior resident in the same examination hall so that the surgeon can supervise
the senior resident while also checking other patients.
c. Proper scheduling with other clinics
At the moment different clinics are operating at the same time and are sharing the
Radiology department. The radiology department is a bottleneck and faces lots of
variability. Scheduling clinic operating time will help ease the pressure and also
decrease the variability faced by the department.
d. Purchasing a new X-Ray machine
Although we cannot say for certainty, it is estimated that a new machine could
decrease the waiting time by 25%. The current waiting time of 35 minutes can be
reduced to 26.25 minutes and this reduction would show up as a significant reduction
in total time. But this purchase would increase the total cost and other options should
be explored first.
e. Dedicated machines to upper and lower extremities
The adjustment time of the X-Ray machines when switching between extremities is a
source of variability and is causing some delays. This could be avoided by dedicating
some machines to the upper extremities while others to lower. Proper trend analysis
should be done to determine how many machines should be dedicated to which part.
f. Preparation and pre operations activities
There are few activities that the clinic and the patients can do even before the patients
arrive at the clinic. For example follow up patients who are arriving from a far
location can have their X-ray done in their own locality before they come to the
clinic. The nurses need to provide instructions during the previous visits. Similarly it
would be more efficient to retrieve the records of the follow up patients before-hand
i.e. as soon as the appointment was made for a re-visit instead of retrieving the
records only after the patient arrives thus wasting time in doing so.
g. Automated information flow

Most of the information flow between the departments is happening manually in the
form of internal referrals and hard copy. An automated and real time information
system would save a lot of time. For example, the X-ray report could be fed into the
system by the radiology department for the use of the doctor rather than the patients
waiting for the development, walking 25 meters, handing it to the nurse who files it
and gives it to the examiner. Automating would allow the examination nurse to
prepare the room and the surgeon to be informed even before the patient arrives.
There are many other activities an automated information system would be useful.

Appendix: Calculation of Utilization Rate


1. Front Desk
1.1. Registration
Operating time 8:30 AM 11:30 AM i.e. 3 hours or 180 minutes
Total Staffs involved 3 clerks
Total time available = 3 180 = 540 minutes
Time spent on registration = 80 patients 5 minutes = 400 minutes
Utilization of clerks = utilization of the registration process = 400 540 = 74.07%
1.2. Verification
Operating time 8:30 AM 12:45 PM i.e. 4 hours 15 minutes or 255 minutes
Total Staffs involved 3 nurses
Total time available = 3 255 = 765 minutes
Time spent on Verification = 9 min 32 new patients + 4 min 48 follow up = 480 min
Utilization of the verification process = 480 765 = 62.75%
(Since the nurses are also involved in X-Ray collection, this is not equal to nurse direct
labor utilization)
Total utilization of the registration and verification activity =
(400+480) (540+765) = 67.43%
1.3. X-Ray Hand off
1.3.1. Collection of X-Ray
Total number of X-rays = 11 min (all new patients + 85% of follow up)
=11 (32 + .85 48) = 72.8
Total time available = 3 nurses 255 min = 765 minutes
Total time required = 2 minutes 72.8 X-rays = 146 minutes
Utilization = 146 765 = 19.04%
1.3.2. Filing and exam room preparation
Total time available = 1 nurse operating for 255 minutes (8:45 1:00) = 255 min
Time needed = 2 min 80 patients (assuming all patients necessitate preparation
of examination hall)
= 160 minutes
Utilization of the activity = 160 255 = 62.75%
Utilization of the X-Ray Hand off activity
= (146+160) (765+255) = 30%

2. Radiology Department
2.1. X-Ray Filming
Operating for 4 hours or 240 minutes from 8:30 to 12:30 with 6 technicians/machines
But out of this 240 minutes only 2/3 of the total time is for the clinic i.e. 160 minutes
Total time available for x-ray filming for the clinic = 160 6 = 960 minutes
Total time required = 72.8 X-rays 11 minutes = 801 minutes
Process utilization = 801 960 = 83.44%
2.2. X-Ray Development
This is a non-labor activity and is carried out totally by the machines
Time available = 960
Time needed = 72.8 x-rays 7 min = 510 minutes
Process utilization = 510 960 = 53.13%
2.3. Diagnosis reading and analysis
Operating time = 160 minutes for the clinic with 3 radiologists
Total time available = 160 3 = 480 minutes
Total time required = 5 min 72.8 x-rays = 364
Process utilization = 364 480 = 75.83%
Overall utilization of the radiology department
= (801+510+364) (960+960+480) = 69.79%
3. Examination
3.1. By the surgeon
Operating time: 8:45 1: 00 i.e. 255 minutes, one surgeon
Total time available = 255 minutes
Total time required = 7 min all new patients + 4 min 30% of follow up
= 7 32 + 4 .3 48 = 282 minutes
Utilization of the surgeon = 282 255 = 110.6%
3.2. By the senior resident
Time available = 255 minutes
Time required = 7 min 70% of all follow up patients
= 7 .7 48 = 235.2

Utilization rate for the senior resident = 235.2 255 = 92.23%


3.3. Cast Technician
Total time available = 255 minutes
Total time required = 17 min 25% of new patients + 13 min 15% of followup
= 17 .25 32 + 13 .15 48 = 229.6
Process/labor utilization = 229.6 255 = 90.03%
Overall utilization of the examination hall = (282+235.2+229.6) (255+255+255) = 97.6%
4. Labor utilization for the nurses
Total time available = Time for the three nurses at verification and x-ray collection + time for
the nurse at the exam prep duty
= 765 + 255 = 1020 minutes
Total time required = Verification + X-Ray collection + Filing and exam hall prep
=480 + 146 + 160 = 786 minutes
Labor utilization = 786 1020 = 77.05
5. Overall utilization of the clinic resources
Total time available
Clerks
Nurses
X-ray technicians
X-ray development
Radiologists
Surgeons
Senior Resident
Cast Technicians
Total
Total time required for
Registration and registration
X-ray processes
X-ray hand off
Examination
Total

540
1020
960
960
480
255
255
255
4725
880
1675
306
746
3607

Overall Utilization rate of the clinic = 3607 4725 = 76.36%

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