Case Analysis

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CLARO M.

RECTO ACADEMY
OF ADVANCE STUDIES
Management Service
PhD in Business Management

CHERRY ROSE TELMO-GAWARAN, MBA

CASE

The administrator of the Life-Time Insurance Company HMO, Ms. Taylor, was anxious to solve
potential problems before the new clinic opened in Mindanao. In Manila, where the original clinic is located,
an important goal of the HMO was to offer programs that would encourage members to stay healthy. Various
programs already had been planned, including those on smoking cessation, proper nutrition, diet, and exercise
the pharmacy had been extremely busy from the beginning, and long waiting times for prescriptions to be
filled presented a very real problem. The center not only would serve as a clinic for the acutely ill but also as a
center for preventive health services including the pharmacy section. 
The Manila HMO pharmacy was modern, spacious, and well designed. The peak time for prescription
was between 10am - 3pm. During this period prescriptions would back up, and the waiting time would
increase. After 5pm the staff would be reduced to one pharmacist and one technician, but the two had no
trouble providing very timely service throughout the evening. 
Ms. Taylor became acutely aware of the long waiting times after several complaints had been lodged.
Each stated that the waiting time had exceeded 1 hour. The pharmacy is staffed with five persons on duty until
5pm. Ms. Taylor personally studied the tasks of all the pharmacy personnel. She noted the time required
accomplishing each task, and results listed in the chart. The prescriptions were filled in an assembly-line
fashion by two technicians and three pharmacists, and each person performed only one task.

Questions

1. Identify the bottleneck activity, and show how capacity can be increased by using only two
pharmacists and two technicians.
2. In addition to savings on personnel costs, what benefits does this arrangement have?
3. Develop a layout that will minimize customer time in the pharmacy.

HUMAN RESOURCE DEVELOPMENT


Dr. Ma. Cecilia Ortiz-Quibel CASE ANALYSIS 1
CLARO M. RECTO ACADEMY
OF ADVANCE STUDIES
Management Service
PhD in Business Management

ANSWER

Let’s say:

Activity Time in Seconds


  Receive prescriptions 24
Type labels 120
Fill prescriptions 60
Check prescriptions 40
Dispense prescriptions 30

Note: The activities of filling, checking, and dispensing prescriptions must be performed by a registered
pharmacist.

1.

The bottle neck activity is typing of labels which take 120 seconds. The cycle time for the whole process
is 274 seconds which is about 4.5 minutes. With the longest activity taking 2 minutes, then only 13
Prescriptions are done every hour.

HUMAN RESOURCE DEVELOPMENT


Dr. Ma. Cecilia Ortiz-Quibel CASE ANALYSIS 1
CLARO M. RECTO ACADEMY
OF ADVANCE STUDIES
Management Service
PhD in Business Management

2. By having two employees working on receiving the prescription and typing labels, one employee
filling the prescription then the fourth employee checking and dispensing the prescription, then the
bottle neck activity which is typing labels can be reduced with the two prescriptions being processed
every 144 seconds instead of one. The cycle time is still 274 seconds. With the change, the prescription
rate changes from 13 prescriptions every hour to 26 prescriptions every hour.

3.

The arrangement makes use of the employees that lie idle owing to their processes taking less time.
This makes them more productive. In addition to that, there is increased productivity with doubling of the
prescription rate which minimizes the delay.

HUMAN RESOURCE DEVELOPMENT


Dr. Ma. Cecilia Ortiz-Quibel CASE ANALYSIS 1

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