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A serious concern throughout the world, the ever‐rising cost of healthcare is particularly challenging in resource‐strapped emerging economies. A study of the management of expensive operating rooms in a public hospital in a northern region of Malaysia highlights how effective scheduling of operations and a reduction in the number of cancellations can help contain healthcare costs. It also identifies five categories of disruptions to operating room schedules, pinpoints the underlying root causes, and offers recommendations on how these problems might be avoided. The findings are relevant to any nation that faces the twin problems of an increased demand for healthcare services from a rapidly growing elderly population and rising costs of advanced surgical techniques. It also shows how several tactics that typically are associated with manufacturing can be used to address problems in the service sector.