Outsourcing of Hospital Services:
Due to financial pressures that many hospitals face, the Deaconess Clinic in Billings, Montana, decided to outsource a number ofservices, although in somewhat different ways.
First, the hospital outsourced its cafeteria food service.Although the food service employees were hired by the outsidefirm, they still felt a sense of ownership of their jobs, and still feltconnected to the hospital because of the family atmosphere in thekitchen and the cafeteria.
When the hospital tried the same thing with housekeeping,employee turnover became a problem. An investigation revealedthat because the housekeeping employees were more isolated intheir work, they lost what little feeling of being connected to thehospital they had.
The problem was solved by hiring the employeesback but using the outsource company to manage housekeeping.The hospital also decided to outsource its laundry service. Thistime the hospital approached a rival hospital about joining it in outsourcinglaundry service.
Questions:
1. In some instances the outsourced service occurs in a differentlocation, while in others it takes place inside the organizationdoing the outsourcing, as the food service did in this case.
What advantages were there in having the outsourced workperformed within the hospital? Suppose a different hospitaloutsourced its food service but decided not to have the workperformed in-house. What might its rationale be?
2. In the housekeeping situation, why not just forget about outsourcing,especially since the hospital ended up rehiring itsemployees anyway?
3. For laundry service, what might have been the rationale forasking another hospital to join it?
Read through the Case Study entitled "Outsourcing of Hospital Services" . It covers capacity planning in operations management.
In a 3-4 pages paper, Explain your answers in (Word Document), answer the questions posed in the case study ( in the attachment).
Be sure to use academic references and cite to support your analysis.