978-1285451374 Chapter 7 Solution Manual Part 2

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14. The Wilcox Student Health Center has just implemented a new computer system and

service process to “improve efficiency.” The process flowchart and analysis

framework is also provided. As pharmacy manager, you are concerned about waiting

time and its potential impact on college students who “get no respect.” All

prescriptions (Rxs) go through the following process:

Assume that students arrive to drop-off Rxs at a steady rate of two Rxs per

The fill Rx station typically has 40 Rxs in process and waiting on average. Because of

this perceived long wait, 95 percent of the students decide to come back later for

People and information flow with the assumption of 1 Rx per

student.

Demand (arrival) or throughput rate = 2 Rxs/minute

This is not an easy problem but it illustrates you must

a. What is the average time a student spends in the pharmacy if

they stay to pick-up their Rx? You may want to use the worksheet

below.

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b. How many minutes does the student spend in the pharmacy if he or

she picks-up the Rx 3 hours later (i.e., the student goes home after

dropping the Rx o1)?

c. What is the average time in minutes that all students spend in the

pharmacy?

d. What is the average time in minutes that the Rx spends in the

process? Count time from entering the drop-o1 line to completing

payment.

15. A manufacturer of air conditioner compressors is concerned that too much money is

tied up in its value chain. Average raw material inventory is $50 million and

work-in-process (WIP) production inventory is $20 million. Sales are $20 million per

week and finished goods inventory averages $30 million. The average outstanding

accounts receivable is $60 million. Assume 50 weeks in one year. The value chain is

shown below:

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a. What is the total flow (process) time of a throughput dollar?

(Hint: Use a WIP = R*T format and table as shown in Problem #

14 to organize your solution.)

First, review the calculations below. If we add the flow times for each process

b. What is the average dollar inventory in the value chain?

c. Which of the major stages—raw materials, WIP, .nished goods or

accounts receivable—is the best candidate for freeing up dollars for

the air conditioner manufacturer?

Clearly, accounts receivable ties up $60m in cash and takes on

d. What is the target level of average accounts receivable inventory

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if management can reduce the time a dollar spends in accounts

receivable inventory (processing and collections) by one-half by

improving the accounts receivable process?

WIP = R*T or $1,000m/year*.03 year = $30m instead of $60m. This

e. What else does this flow time analysis problem demonstrate?

This post-production service is a good place to start improving value

chain performance. Revisit Exhibit 2.3 to see what other

Case Teaching Note: Hopewell Hospital Pharmacy

Overview

Hopewell Hospital is trying to reduce costs yet maintain high quality.

There are many opportunities for errors in writing and .lling an Rx in a

hospital pharmacy and this case focuses, in part on that issue. The

case cites national studies on hospital pharmacies found error rates

ranging from .01 percent (1 in a 1,000) to 15 percent (15 in 100).

The focus of the case is on job and process design and “how to

organize and group work?” Instructors might want to assign other

(extra) questions to focus student attention or at least pose during

class (see teaching plan).

Case Questions and Brief Answers

1. Draw the process flowchart including processing times and

capacities per step, and total time per prescription.

Since process steps (stages) are in series this is a relatively easy

3. Clearly identify two other ways to group and divide the work among

the medical technicians and pharmacists, compute labor utilizations,

and discuss the advantages and disadvantages of each job and

process design option.

The case questions are general so expect a wide variety of student

(1) Process Design Option A — All work (steps 1 to 7) done by

pharmacists.

Disadvantages – no bene.t from job specialization, highest skill level

The spreadsheet analysis indicates with 4 pharmacist utilization is

Also, note that if you group all work and one pharmacist .lls a RX

(2) Process Design Option B — Assign steps 1 and 7 to medical

technicians and steps 2 to 6 to pharmacists.

Advantages – lessen workload on pharmacists labor pool, all that is

legally required

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With Option B utilization is 96.2% with 4 pharmacists and 92.3% with

5. Notice that the service rate went from 6.19 Rx/hour to 7.8 Rx/hour

assuming this option.

(3) Process Design Option C — Assign steps 1 and 7 to medical

Disadvantages – since the two pharmacists workstation are now

interdependent must be sta1ed at all times, not sure about impact

4. What are your .nal recommendations?

Option A with 5 pharmacists and a utilization of 97% is best in

Option B is probably second best with 4 pharmacist’s utilization

Pharmacy must comply with all legal requirements.

conflicts and allergies.

Other case questions you might use during class discussion or

assign prior to case write-up are as follows.

1. What is range of service upsets severity in this case

situation?

Degree of Service Upset Severity

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2. What is

the #1 competitive priority for this hospital pharmacy process?

• Quality is #1 — zero errors, minimize opportunities for errors,

3. Would you rather have one pharmacist handle your

prescription from A to Z or can these tasks be assigned to

different pharmacists?

For goods-producing assembly lines job specialization has many

4. Does this process have to be organized in series?

5. How can software technology help ensure quality? (Pharmacy

6. What sustainability issues are there in a hospital pharmacy?

Teaching Plan

You can use the four case questions and the .ve extra questions to

create a good case discussion depending on how much time you

You can conclude this case discussion by pointing out that

• How you group (organize) work affect resource utilization, waiting

Low

High

No effect Upset Stomach Sick Shock Death

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Hopewell Hospital Pharmacy Total

Step

1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7

Time

per

min/Rx 0.5 1.3 1.4 1.0 3.2 0.8 1.5 9.70

Capacit

y 120.0 46.2 42.9 60.0 18.8 75.0 40.0

6.19

(60/9.7)

(Rx/Hour) BN

JOB & PROCESS DESIGN — OPTION A

If you assume all work can be grouped together than one pharmacist has a capacity of 6.2 Rxs/hour

JOB & PROCESS DESIGN — OPTION B

If 4 pharmacist do all the work except Steps 1 & 7 (assigned to medical technicians) then it takes 7.7 minutes/Rx

or 6.1 Rxs/hour. The revised pharmacist utilization 96.2%. If 5 pharmacist are assigned under these job and

JOB & PROCESS DESIGN — OTHER

If we assume the medical technicians can do Steps 1 and 7 and Steps 2 to 6 can be combined then we have

Using Equation 7.2

If 4 pharmacist do all

the If 5 pharmacist do all the If 4 pharmacist do all the If 5 pharmacist do all the

work then: work then: work except Steps 1 & 7 work except Steps 1 & 7

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