Question 1.
(a)
The main operating costs that a major hospital would have include labor as a component which consumes almost two third of all the expenses that are made within the hospital. This includes the overall staff working within a particular hospital. The tests and technology are also a part of the hospital costs as well as the supplies and capital expenses which are approximated to be about 15% of all the expenses incurred in running a hospital. Most of these costs are generally referred to as the capital expenses which are necessary for the running of the hospital ("Categories of Expenses & Revenues in the Hospital Business Setting").
(b)
Labor costs: once the leaders within a hospital are able to take control of the costs incurred in labor the hospital is likely to incur higher revenue marginal return. The payment made to the health workers is likely to determine the value of outcomes that the patients within the hospital facility enjoy. This is a key aid to the transformation of the operations within from the former volume-based model, in which hospitals get reimbursed for the services that are provided to the value-based model in which the reward is attributed to the positive and quality of the patients’ outcomes while at the same time penalizing the providers who deliver less effective and low quality of care (Morris 397-398).
The value added in the process of remunerating the labor within a hospital is that the health workers tend to deliver quality and effective care to the patients who are the main clients of any hospital facility. This goes a long way in ensuring that the facility continues to attain high volumes of people over a given time which contributes to the revenues incurred. This might as well include the hiring of employees who are highly skilled in enhancing the quality of services offered. The ‘non-value added’ aspect of labor includes the overtime working which compromises the quality of healthcare services delivered to the patients as well as the overall patient satisfaction.
(c)
All the employees or workers within the organization ought to have the most appropriate tools that are necessary for their work as well as proper training which makes them comfortable in their various fields. To control the labor expense and reduce the non-value aspects it is also important to frequently monitor the results and output of the employees most appropriately in daily terms. This might call for several inventiveness such as the bending of the staff capacity bestowing to the number of the patients they serve.
Question 2.
The processes that are involved in the service industry appear to have quite long cycle times a case in point is the process of quarterly payroll tax as opposed to the manufacturing industry. The service industry is also characterized by a lot of complex variables along the process of delivering services as compared to the manufacturing industry. Most importantly the service industry is full of interactive sessions at which decisions have to be made as opposed to the manufacturing industry where everyone concentrates in one field of production (Ross).
Therefore, the key difference between the service and manufacturing industry is that much of the work that is value added occurs out of the sight mainly in the minds of people, this is unlike in the manufacturing industry where lean is easily applicable because most of the value added work is repetitive and visible. Having mentioned the service industry aspects related to lean it is therefore evident that the tools of lean can also be applied in the service industry, because the processes within the service industry are not observable physically especially some of the most useful tools for instance the visual management which bring out the invisible aspect of work visible as well as those techniques which specifically aid in the development of a team participants’ problem solving as well as critical thinking aspects and abilities at optimum levels (Ross).
Lean implementation in the manufacturing industry such as the production of the caterpillar machinery production system is based upon elements of production applied by Toyota Company. The key element in the production is the pace of production courtesy of the lean integration, this makes the project last within the necessary timeline which promotes success. Application of lean in service industry involves the combination of people who undertake similar tasks, for instance, the customer care workers as well as those who manage the information systems or database of the customers, they all undertake the same steps to complete the different tasks.
Lean can be applied in the e-commerce in the delivery section such as the application by Amazon through the development of a business model that is comprehensive and focusing on the supply chain management based on proven methodologies which guarantee the success of the business for instance through the delivery of products that have exactly been ordered by customers without any damage, this would call for the application of lean which focusses on instance detection of damaged goods along the process of delivery to avoid further complication of the problem.
Works Cited.
"Categories Of Expenses & Revenues In The Hospital Business Setting". Smallbusiness.chron.com. N.p., 2016. Web. 18 July 2016.
Morris, Leslie R. "Job Preservation, Control Freaks, And Labor Costs: Best Practices For Controlling Costs". Journal of Interlibrary Loan,Document Delivery & Electronic Reserve 18.4 (2008): 397-398. Web.
Ross, Karyn. "Lean Is Even More Important In Services Than Manufacturing". Industryweek.com. N.p., 2016. Web. 18 July 2016.
WANG, NING. "MEASURING TRANSACTION COSTS: DIVERGING APPROACHES, CONTENDING PRACTICES". Division of Labour & Transaction Costs 02.02 (2007): 111. Web.
