Integrated capacity planning starts with a strategic framework

When it comes to integrated capacity planning in hospitals, what is the biggest pitfall, and where should you start?

In hospitals, there is increasing interest in optimising capacity from a broad perspective. We call this ‘integrated capacity planning’(NL). Regular fine-tuning of capacity at a central level yields significant benefits in terms of efficiency, quality and controllability. Implementing integrated capacity allocation is a challenging task that requires the making of strategic choices and proper embedding in the organisation. The greatest pitfall is to take too operational an approach, or to focus on tools and systems to the exclusion of everything else.

In the coming series of blog posts this year, I’m going to be writing about integrated capacity planning in hospitals. This first blog post explains the abovementioned strategic choices, while the following posts will further explore the goals of and approach to integrated capacity planning.

First determine your strategy

One very common pitfall in taking an integrated approach to capacity is to regard it as an operational challenge that can be solved with the right tools. When organisations employ tactical planning systems, they often end up with suboptimal solutions. To avoid this, it’s essential for the organisation to first establish a clear strategic framework within which it intends to deploy integrated capacity planning, and subsequently to determine which goals are to be achieved with integrated planning, based on the same framework. These objectives may be conflicting:

  • Do you want to use this tool to increase the organisation’s quality and service level?
  • Is the aim to increase efficiency?
  • Or is the intention to improve controllability by linking clearer operational tools with strategic goals?

If a hospital hasn’t explicitly considered its value proposition, there’s a chance that it will undertake capacity optimisation with the wrong goal in mind.

Strategic orientations

In the healthcare sector too, the model proposed by Treacy and Wiersema helps to refine value propositions and translate them to the organisation. This model makes the distinction between three orientations: customer intimacy (customer partnership), product leadership and operational excellence. In practice, hospitals work on the basis of a differentiated proposition in which all three orientations have a place.

It is therefore important to clearly understand which value proposition is used for which part of the portfolio. Below is a brief explanation of each proposition:

  • The value proposition most used in healthcare focuses on customer intimacy. Excelling on this axis means consistently putting the interests of the patient first with the aim of delivering outstanding service focused on the patient’s specific wishes. In capacity allocation, therefore, the priority is providing the patient with optimal service, which requires a high degree of flexibility. Because patient processes are not confined to a single department, but are often spread across multiple departments and functions, an integrated approach by the hospital works very well here.
  • Another important strategic orientation in hospitals is product leadership, in which everything revolves around the highest quality for things such as innovative treatment methods and high-quality research provided by the best doctors. This applies to the indication areas that a hospital specifically wishes to focus on (its priorities). The right kind of integrated capacity management helps in the achievement of these goals. An example is the realisation of healthcare innovation by optimising capacity in the care cycle or the chain.
  • For those product groups falling outside of the priority areas, operational excellence is a realistic option. This involves supplying reliable healthcare products at a competitive cost price. In this, integrated capacity management focuses on standardising planning and processes and enables hospitals to use resources as efficiently as possible while the quality still meets the required standards.

Dare to take the leap forward!

Every journey begins with a first step… so go!
But beware, …if you don’t know where you’re going,
every road will take you there.

Integrated capacity planning is a powerful tool that is becoming increasingly prominent in hospitals. Before embarking on broad implementation of this tool, you should first have a clear understanding of your strategic value propositions. With that in mind, you can go on to use this new means of capacity management to achieve your strategic objectives faster and better than ever before.

For further information, please contact me