There are many methods used by Operation Management
Experts to determine the number of employees needed by an organization. The two
common ones are the Full Time Equivalent (FTE) method and the Takt time Method.
In my Training Sessions with Hospital Entrepreneurs, Doctors and Managers, I
tend to favor the Takt time method. Though slightly more technical, it can be
used in combination with deductive reasoning. This makes it suitable for use in
the hospital setting. Physicians are generally not fans of calculations, so I
will explain it as clearly as I can.
Firstly, I will
define the following terms-Labor Content, Demand, Takt Time and Target
Manpower.
Labor
content is the total amount of time that a flow unit (e.g.
a patient) spends within a process. It is determined by calculating the sum of
the individual time each resource/employee spent with the patient. For example,
if a patient spends 5 mins at registration, 30 mins at consultation and 30 mins at
the pharmacy before leaving the hospital, the labor content will be
(5 mins+30 mins+30 mins) 65 mins.
The
demand is the total number of flow units per given period.
E.g. we can speak of a demand of 10 patients/hour.
The takt time
defines the ideal amount of time that a flow unit should spend with each
resource/employee/work station. Takt is a German word that means “the beat of
the music”. Literally, it signifies that workers should dance to the beat of
the music of demand. That is, if the demand increases, the pace of the work
should also increase. If the demand reduces, then the work pace should equally
drop. The formula for Takt time is:
Takt
Time= 1/Demand
Or
Takt
Time/hour= 60 mins/Demand per hour
The target manpower is the approximate
number of resources you need to employ in order to achieve the takt time. It is
calculated as follows:
Target
Manpower = Labor Content/Takt time
For better understanding, let’s consider the problem
below:
Dr.
Johnson is a Hospital Entrepreneur who owns a modest hospital, New-life
Hospital (a general practice facility) located in a small town. He runs
consultation services Mon-Fri (8 am-4 pm) and also admits the occasional patient
into the ward. Thus the hospital is open 24 hours a day, 365 days a year.
He
has on his payroll, 1 resident doctor, 9 nurses who rotate on an 8 hourly basis.
(3 nurses on morning shift, 2 on afternoon, and 2 on night duty and 2 off duty).
He also employs 1 pharmacist-technician, 1 laboratory scientist, and 1
receptionist/records staff to help him during clinic hours (8 am-4 pm). His total
number of employees is 13.
His
workers are idle most of the time except on Wednesdays (ANC days) when the
demand is overwhelming (40 patients on average). During ANC days, the workers
usually work overtime. The ANC process is as follows: 5 mins (registration),
10 mins (vital signs), 15 mins (doctor) 30 mins (laboratory) and 20 mins
(pharmacy).
On
other days, New-life hospital attends to an average of 16 patients in the
Out-Patient Clinic.
What
should be his optimal target manpower for Non-ANC days and for ANC days? (Assume
a labor content of 40mins during non-ANC days.)
Solution:-
To calculate the target manpower for non-ANC days ,
Labor
content =40 mins (given above)
Demand/hour
=
16 patients/8 hours
= 2 patients/hour
(Note that
there are 8 working hours every clinic day and a total of 16 patients every
clinic day)
Takt
Time/hour = 60/Demand per hour
= 60/2= 30 mins (i.e. a
patient should spend 30 minutes at each work station)
Target
Manpower = Labor Content/Takt Time
=40/30=
1.3 (approx. 2 workers)
N.B:
In practice, a patient will not spend an equal amount of time at each work
station. The 30 minutes above is therefore a theoretical guide that gives the
maximum duration a patient should spend with each resource at New-Life Hospital.
Let’s
calculate these same values for ANC days
Labor
Content = 5 mins+10 mins+15 mins+30 mins+20 mins
= 80 minutes
Demand/hour
=
40/8
= 5patients/hour
Takt
Time/hour = 60/5
= 12 mins (i.e. a
patient can spend 12 minutes at each work station)
Target
Manpower = 80/12
= 6.7 (approx. 7 workers)
Deductions:
1. For
non-ANC days, the target manpower is actually 1.3 workers. However, we rounded
it up to 2 workers because we can’t have 0.3 of a person. But having only 2
workers in a clinic is hardly practicable (unless, Dr. Johnson wants to run a
village health outpost).
Dr Johnson feels that
to effectively run a clinic, there must be a minimum of a doctor, a nurse, a
pharmacist-technician and a laboratory scientist. That makes a total of at
least 4 workers. Dr. Johnson currently has 9 nurses, 1 doctor, 1 pharmacist-technician,
1 laboratory scientist and 1 record staff making a total of 13 workers.
To determine his optimal target manpower for Non-ANC days,
I will assume here that the number of patients visiting the OPD daily
determines the number of patients on admission. If only 2 patients come every
hour, the chances are that the admission rate will be low, therefore the nurses
on afternoon and night shifts will not have much to do.
With that in mind, Dr.
Johnson doesn’t need a resident doctor on non-ANC
days. He alone can cope with the work load until his clientele increases.
He also doesn’t need a records staff, 1 of his nurses can perform that role currently.
Also, he doesn’t need 9 nurses. 5 nurses should suffice i.e. 2 on morning shift,
1 on afternoon, 1 at night and 1 on off duty per time.
The optimal
target manpower for non-ANC days will now consist of 5 nurses, 1 laboratory
scientist, and 1 pharmacist-technician = 7 workers.
(We arrived at this number through a combination of
scientific calculations and deductive reasoning.)
2. On
ANC days, the demand increases to 5 patients/hour and the calculated target
manpower is 7 workers (not 6.7 because you can’t have 0.7 of a person). This
corresponds with the optimal target manpower for non-ANC days.
However,
because of the increased work load on ANC days, Dr Johnson may need to employ a
Doctor on a part time basis and also bring in an extra nurse. This will bring
the optimal target manpower on ANC
days to 9.
3.
Finally, from calculations and deductive
reasoning, Dr Johnson should employ 7 full time employees and 2 part-time
employees. This brings his total number of employees to 9 instead of 12. This 9 should consist of 5 full-time nurses, 1
full-time laboratory scientist, 1 full-time pharmacist-technician, 1 part-time
nurse and 1 part-time doctor.
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