World co creation day-cbe

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Key Note Presentation of Dr P Namperumalsamy, Chairman-Emeritus, Aravind Eye Hospital at the first ever World Co-creation Day 2011, organised by FORCE in association with Park Global School of Business Excellence at Coimbatore, India

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  • The pictures in this slide:
    25 years back began as a small organisation
    4 member team with a big mission
    To deal with avoidable blindness at the national scenario and global level
    Financial constraints-totally dependent on self generation of income
    Efficiency at the core of systems development
    This slide will be replaced by pictures-this is notes the 11 bedded hospital-where it qll strated
    Photo of the first team
    Financial prob-to show the $ sign or put Rs or some clip art
  • World co creation day-cbe

    1. 1. ARAVIND EYE CARE SYSTEM Aravind Eye Hospital & Postgraduate Institute of Ophthalmology Madurai, India Dr. P. Namperumalsamy, MS, FAMS Chairman Emeritus 1/54 World Co-Creation Day 2011
    2. 2. A R A V I N D E Y E C A R E S Y S T E M Prof. C.K. Prahalad • Graduated from Loyola, Chennai 1960 and IIM – Ahmedabad 1966 • DBA from Harvard – 1975 • Award winning articles on Business • Books : Bottom of the Pyramid : The Future of Competition • Member : Many distinguished societies • Honours and Awards 2/54
    3. 3. A R A V I N D E Y E C A R E S Y S T E M • Named among Top Ten Management Thinkers of the World in every major survey for over 10 years • Introduced the concept of Co-Creation Prof. C.K. Prahalad 3/54
    4. 4. A R A V I N D E Y E C A R E S Y S T E M Experience Co-Creation (ECC) Emerging Relationship between customers and Companies • Customers : More Demanding More informed More knowledgeable • Companies : Products and Services Commoditization Erodes customer loyalty 4/54
    5. 5. A R A V I N D E Y E C A R E S Y S T E M Four Principles of Co-Creation 1. Stakeholders won’t wholeheartedly participate in customer co-creation unless it produces value for them too 2. The best way to co-create value is to focus on the experiences of all stakeholders 3. Stakeholders must be able to interact directly with one another 4. Companies should provide platforms that allow stakeholders to interact and share their experiences 5/54
    6. 6. A R A V I N D E Y E C A R E S Y S T E M Prof & Mrs. Prahalad – Discussion with the Team at Aravind 6/54
    7. 7. A R A V I N D E Y E C A R E S Y S T E M • Prof.C.K Prahalad ‘Aravind eye hospitals is a company doing 40% of all cataract surgeries in the state of Tamil Nadu. This is the largest in the world. They see 1.2 million out patients and operate 150,000 cataracts a year. And it costs $10- 12 for a cataract in India while it costs $1600 for the Medicare patients in USA’ 7/54
    8. 8. A R A V I N D E Y E C A R E S Y S T E M Aravind Model “Inspiring Innovations / Expanding Horizons” 8/54
    9. 9. A R A V I N D E Y E C A R E S Y S T E M • Worldwide 45 million people are blind • 12 million of them in India • One million of them are children • More people are blind in India than any other country • Cost of Blindness in India: US $ 3 billion annually • 200 million need eye care in India • Less than 20% have been reached Magnitude of Blindness 9/54
    10. 10. A R A V I N D E Y E C A R E S Y S T E M Distribution of Ophthalmologists in India Population Ophthalmologists Ophthalmologists/ Population In 56 Cities 10.9% 57% 21,000 Villages 89.1% 43% 2,19,000 Eye Care • 11-12000 oph. surgeons for 1 Billion • Available hospital facilities : Public & Private • Inadequate care • Quality of care • Non-availability of care 10/54
    11. 11. A R A V I N D E Y E C A R E S Y S T E M The Fortune at the Bottom of the Pyramid Reference : C.K Prahalad and Stuart Hart 2002 Tier 5 Tier 4 Tier 2-3 Tier 1 Purchasing Power parity in U.S. dollars Population in Millions > $ 20,000 $ 1,500 - $ 20.000 $ 1,500 < $ 1,500 75 - 100 1,500 - 1,750 4,000 • Consider the global market as a pyramid of consumers based on economic strength • The new and emergenic opportunity in countries such as China, India and Brazil is in the lower - income segment : Tiers 2,3 and 4 • Serving these markets will dramatically influence the management process in transition Create a “Consumer market out of poor” capture the “Poor Market” there is a big money in the poor – by C.K. Prahalad 11/54
    12. 12. A R A V I N D E Y E C A R E S Y S T E M Challenges to serve the Base of the Pyramid (Based on analysis by Prof. C K Prahalad) Market Conditions • Large unserved population • Resource scarcity (Capital and Doctor) • Dispersed population • Low Affordability • Poor Logistics Innovation Needs • Scalable model required • Optimize Resource utilizations • Remote diagnostics and delivery • Dramatic reductions in Costs • Different models to increase access 12/54
    13. 13. A R A V I N D E Y E C A R E S Y S T E M If we STOP thinking of the poor as victims or as a burden and START recognizing them as resilent and creative entrepreneurs and value conscious customers, a whole new world of opportunity open up. - Prof. C.K. Prahalad 13/54
    14. 14. A R A V I N D E Y E C A R E S Y S T E M Effective Health Care System • Reflects community’s needs • Understands community’s constraints • Provides easy access in terms of logistics, timings etc • Services are affordable and the charges reflect the paying capacity • Keeps abreast of relevant technological advances • Actively seeks the patients and educates the community 14/54
    15. 15. A R A V I N D E Y E C A R E S Y S T E M Dr.V, feeling the urgent need, started an eye clinic with 11 beds, to create an alternate, sustainable eye care system to supplement the government’s efforts In a developing country with competing demands on limited resources, government alone cannot meet health needs of all the poor. Genesis There is an urgent need to establish an alternate health care model that could strengthen and supplement the efforts of the Govt and also be self-supporting. 15/54
    16. 16. A R A V I N D E Y E C A R E S Y S T E M Aravind in Retrospect.... Began here - as an 11 bedded clinic in 1976 Small team with a big mission Money 16/54
    17. 17. A R A V I N D E Y E C A R E S Y S T E M Tamil Nadu Coimbatore (1997) Amethi (UP) - 2005 Kolkata (WB) - 2001 Amreli (Gujarat)  - 2007 Lucknow - 2008 Aravind Eye Care Network Theni (1984) Pondicherry (2003) Tirunelveli (1988) Madurai (1978) Managed Eye Hospitals Total – 47centres Tertiary Eye Care Units 5 Community Eye Centres 14 Vision Centres 36 Managed Eye Hospitals 2 City Center 1 17/54
    18. 18. A R A V I N D E Y E C A R E S Y S T E M Total Surgeries & Lasers till March 2010 : 3,701,580 18/54
    19. 19. A R A V I N D E Y E C A R E S Y S T E M Clinical Services Year 2009-10   Total Paying Free Outpatients 2,539,615 1,341,582 387,582 Surgeries 302,180 141,030 161,150 “Aravind Hospitals perform 150,000 cataract operations in a year - more than the whole NHS -UK” - Mark Tully (BBC) 2002 “Aravind Hospitals perform 150,000 cataract operations in a year - more than the whole NHS -UK” - Mark Tully (BBC) 2002 19/54
    20. 20. A R A V I N D E Y E C A R E S Y S T E M Volume Handled Per Day • 6000 Outpatients in hospitals • 850 surgeries • 4-5 outreach screening eye camps • Examining 1500 people • Transporting 300 patients to the hospital for surgery • Classes for 100 Residents/Fellows & 300 technicians and administrators Making Aravind the largest provider of eye care services and trainer of ophthalmic personnel in the world ProductivityProductivity 20/54
    21. 21. A R A V I N D E Y E C A R E S Y S T E M Aravind Management Retreats • Strong influence of Management principles • Effective planning • Envisioning the future for reorganizing ourselves to become more effective and responsive to the opportunities 21/54
    22. 22. A R A V I N D E Y E C A R E S Y S T E M Aravind Model......... • Aravind work viewed from 4 dimensions • Service model : Large volume, high quality affordable eye care, self supporting • Business model - systems and procedures that make Aravind work • Spiritual angle - the drive to reach greater heights, to do more, to do better • Innovations 22/54
    23. 23. A R A V I N D E Y E C A R E S Y S T E M Innovations • Application of high standard clinical and management principles • Demand generation − Social marketing by the community and for the community − Outreach services − Speciality eye care and camps – innovative methods of approach − IT enabled vision centers − Mobile vans with satellite connectivity • Development of human resources − PG training − Medical team – Recruitment and retention − Mid level ophthalmic personnel 23/54
    24. 24. A R A V I N D E Y E C A R E S Y S T E M Core Principles in Delivering Eye Care Aravind Model Community Based Eye Care With Modern Technology and Quality Affordable to All and Financially Viability Under Efficient Management Systems 24/54
    25. 25. A R A V I N D E Y E C A R E S Y S T E M • Better approach to help the poor • Involve partnering with them to innovate • Achieve sustainable win-win scenarios • Poor actively engaged and companies providing profitable products and services • Collaboration between poor, community service organisations, Govt. local firms Prof. C.K. Prahalad 25/54
    26. 26. Developing the Market • Principles − Market driving (reaching the unreached) − Removing barriers − Community participation • Impact − Growing the market − Creating access Outreach in 2009 - 10 No.of Screening Camps 2,148 Patients examined 455,378 Surgeries 76,081 26/54
    27. 27. A R A V I N D E Y E C A R E S Y S T E M Impact – reaching the unreached • Increased awareness • Influencing health-seeking behaviour • Creating access • Community participation • Growing the market (reaching the unreached) 27/54
    28. 28. A R A V I N D E Y E C A R E S Y S T E M 28/68 Taking super-specialty care to villages VSAT 28/55
    29. 29. Dedicated Medical Team • Full time : from inception • Optimum remuneration comparable with any institution • Professional satisfaction • Academics and research • Surgical experience • Opportunities for international collaborations • Participation in management • Maximum retention 5% of Indian ophthalmic services we are able to do with 1%< of country’s ophthalmic power. Maximum utilization of available resources with employee satisfaction 29/54
    30. 30. A R A V I N D E Y E C A R E S Y S T E M Teaching & Training OphthalmologistsTechnicians Administrators Affiliations: MCI, NBE, RCO-UK, JACHPO-USA, MGR Medical & MKU Universities 30/54
    31. 31. A R A V I N D E Y E C A R E S Y S T E M Paramedics Training • Spirituality • Core area in Aravind • High school qualified girls • Rural background to match our clients • Culture and values • Value added training • Doctor : Paramedics = 1:4 • Produce and viable 31/54
    32. 32. A R A V I N D E Y E C A R E S Y S T E M Innovations • Utilization of available resources to the maximum − “McDonald “way − Assembly line effectiveness • Patient Satisfaction − Quality assurance − Affordable differential pricing of the ‘Product’ - Vision − Standard protocol – systems development − ‘State of the art’ technology − Deployment of IT in eye care Contd 32/54
    33. 33. A R A V I N D E Y E C A R E S Y S T E M • Powerful marketing devices are used to sell products like Coca-Cola, Hamburger. All I want to sell, to market, if you will, is a good eye sight and there are millions of people who need it Dr.G. Venkataswamy Founder AECS 33/54
    34. 34. A R A V I N D E Y E C A R E S Y S T E M The delivery system 34/54
    35. 35. A R A V I N D E Y E C A R E S Y S T E M Assembly Line … Efficiency Surgical Productivity 35/54
    36. 36. A R A V I N D E Y E C A R E S Y S T E M Cataract Surgery with IOL Implant • 40% of all cataract surgeries in Tamil Nadu are performed in Aravind Eye Hospitals • A surgeon in Aravind performs more than 2000 cataract surgeries a year which is 5 times the number performed by an average Indian ophthalmologist. • Key factor: Monitoring ProductivityProductivity EfficiencyEfficiency Ophthalmologists Tables Scrub Nurses Running Nurses Instrument sets Sur./hour 1 1 1 1 1 1-2 1 1 1 1 3 2 1 2 2 1 6 4-6 1-1 Resident 3 3 2 8 8 36/54
    37. 37. A R A V I N D E Y E C A R E S Y S T E M Quality – always current • Early adoption of relevant technologies • Skills & Perspectives upgraded through international visits and exchanges QualityQuality  Exchange of Residents with the leading US institutions  Continuous improvements based on patient & employee feedback 37/54
    38. 38. A R A V I N D E Y E C A R E S Y S T E M Giving Value • Comprehensive Care • End to End Solutions • Patient Centred processes • Focus on outcomes • Compassionate Care QualityQuality 38/54
    39. 39. A R A V I N D E Y E C A R E S Y S T E M Aravind - Service Model • Fee for service: 35% of patient care • Free/Subsidized service: 65% of patient care • Separate facilities for the paying and free patients The patient chooses where to get his/her care. The care provided is of the same quality but the facilities provided are different based on the pricing. The patient chooses where to get his/her care. The care provided is of the same quality but the facilities provided are different based on the pricing. AffordabilityAffordability High QualityHigh Quality High VolumeHigh Volume 39/54
    40. 40. A R A V I N D E Y E C A R E S Y S T E M Aravind Model - Pricing • Different pricing for poor, middle and upper class of the community • Transparency in patient charges • Services that match patient expectations • Pricing the services to match the paying capacity of the community. Category % Can pay any amount Can pay reasonable charges Can pay subsidized rate Can’t pay any amount 5 40 35 20 Paying Capacity of the Population 40/54
    41. 41. A R A V I N D E Y E C A R E S Y S T E M Innovations • Product development − Cost effective consumables − IOLs, pharma, instruments to ensure quality • Financial viability and self sustainability − Service cum business model Contd 41/54
    42. 42. A R A V I N D E Y E C A R E S Y S T E M Turning apparent disadvantages into realized opportunities Mission & Objectives • Produce quality products : ISO Mark • Provide at affordable cost : $2 • Support avoidable blindness effort • Self sustain and grow: • Export to 120 countries 42/54
    43. 43. A R A V I N D E Y E C A R E S Y S T E M Intraocular Lens Division Pharmaceutical Division Suture Division Blades Division Instruments Division - Aurolab was established in 1992 to produce intraocular lenses (IOLs) to make quality cataract surgery affordable in developing countries. 43/54
    44. 44. A R A V I N D E Y E C A R E S Y S T E M Making Eye Care Affordable Used in 120 countries Price of IOL came down from $ 100 to $ 2 – making cataract surgery affordable 10 million people see the world through Aurolab’s lenses 7% of global market 44/54
    45. 45. A R A V I N D E Y E C A R E S Y S T E M Prof C.K.Prahalad--- • I looked at Aravind as business. Their income is about 230 million, expenditure is 12 and the profit of 11. If I add to the lens manufacturing arm it is 200% return on capital employed. But 60% of them are non-paying patients. This is what this business is about 45/54
    46. 46. A R A V I N D E Y E C A R E S Y S T E M Financial Results Free (Camp) 33%Paying 45% Free (Direct) 22% Surgery mix in 2008 -09 Year: 2008-09 Income: US$ 22 Million Expenses & Depreciation: US$ 13 Million EBITA: 39% Through a unique fee system & effective management, Aravind provides free eye care to 60% of its patients 46/54
    47. 47. A R A V I N D E Y E C A R E S Y S T E M Lions Aravind Institute of Community Ophthalmology To contribute to the prevention and control of global blindness through Teaching, Training, Consultancy, Research, Publications & Advocacy Spirit of Sharing 47/54
    48. 48. A R A V I N D E Y E C A R E S Y S T E M Case Studies of Aravind 1. The Aravind Eye Hospital, Madurai, India: In Service for Sight - Harvard Business School, March, 1993 2. From Market Driven to Market Driving - Nirmalaya Kumar, European Management Journal VOL: 18 (2) APRIL 2000 3. Aravind Eye Care System: Giving them the most precious gift. - Profs. S. Manikutty & Neharika Vohra of the Indian Institute of Management, Ahmedabad, 2003. 4. Making Sight Affordable (Part I) Aurolab Pioneers Production of Low-Cost Technology for Cataract Surgery - Mahad Ibrahim, Aman Bhandari; Jaspal S. Sandhu; and P. Balakrishnan - Innovations VOL: 1 (1) SUMMER 2006 P.25-41 48/54
    49. 49. A R A V I N D E Y E C A R E S Y S T E M Aravind Case Study • The Lofty Missions – Down to Earth Plans Harvard Business Review, March 2004 Fast Company, a popular magazine in US declares Aravind as one of the 50 most innovative companies of the world http://www.fastcompany.com/fast50_09/list-all Check out No. 47 http://www.fastcompany.com/fast50_09/lists/the-most-innovative-companies- in-India.html • The Fortune at the Bottom of the Pyramid C.K. Prahalad, Wharton Publishing, 2006 • Compassionate, High Quality Health Care at Low Cost. The Aravind Model. In conversation with Dr. G. Venkataswamy and R.D.Thulasiraj IIMB – Management Review, September 2004 49/54
    50. 50. Champalimaud Award Service Awards Gates Award Hilton Humanitarian Award 50/54
    51. 51. Spiritual Basis The hospital is named after Sri. Aurobindo Ghosh and his teachings form the basis for the work P O W E R F A I T H If work is approached from a spiritual perspective, then it becomes divine work. If in your actions, you allow the divine force to flow through you, you will accomplish things far greater than you might have imagined.” - Sri AurobindoSri Aurobindo Aravind Eye Care SystemAravind Eye Care System 51/54
    52. 52. A R A V I N D E Y E C A R E S Y S T E M - Sri Aurobindo “Faith, more faith Faith in your possibilities Faith in the power that is at work behind the vein, Faith in the work that is to be done and The offered Guidance” 52/54
    53. 53. A R A V I N D E Y E C A R E S Y S T E M BOP Market • Get products and services at affordable price • Get recognition : Respect and fair treatment • Building self-esteem • Decision makers hear the voices of the poor • High volume : Quality • High Return on capital • Self sustainability ARAVIND MODEL - Prof. C.K. Prahalad 53/54
    54. 54. He has shown the way to do it, We believe it and we “can do” it … Aim High Set Goal ... Set an Example 54/54

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