Operational Functions of a Holiday Inn Nottingham - Case Study Example

Introduction Holiday Inn Nottingham is part of the Holiday Inn franchise and is located very close to the Nottingham centre. Its proximity to the city centre ensures that it benefits from a variety of clientele, and it also means that it can cater for both business clients and leisure clients. Its location in Nottingham is also close to major transport links in the way of buses, trains and trams, which means it is easily accessible. Accessibility is an important feature both through public transport and by car, as it will influence the number of clients the hotel will receive. Accessibility is a key issue and an importance operations management issue for hotels and this essay will use Holiday Inn Nottingham as a case study to analyse the operational functions of a service organisation. Operational Functions of a Service Organisation The operational functions of an organisation are those that enable it to undertake its role (Flaherty 1996, Slack et al 1998). In the case of a service organisation, the operational functions would be those that implement the organisation's core service. In the case of Holiday Inn Nottingham, its operational functions will involve those functions that enable customers to book their services, and the people involved in making sure this is carried out appropriately. The operational functions of an organisation are also determined by the three roles as implementers of business strategy, supporters to the business strategy and as the drivers of business strategy (Flaherty 1996, Slack et al 1998). This has several meanings for Holiday Inn Nottingham, because as an implementer of business strategy it will have to ensure that it puts the general Holiday Inn strategy into place. This would include attracting customers to the hotel by managing and promoting the Holiday Inn brand in Nottingham, through marketing and advertising the organisation. As a support of business strategy, Holiday Inn Nottingham has to develop resources to provide the capabilities which are needed to allow the hotel to achieve its strategic goals (Flaherty 1996, Slack et al 1998). Holiday Inn Nottingham has completed a major refurbishment of its hotel, and part of these refurbishments include modernising accommodation and business facilities, so that the hotel can fulfil its role in implementing the Holiday Inn business strategy. In terms of driving the business strategy, Holiday Inn Nottingham has to ensure that it retains its competitive edge (Flaherty 1996, Slack et al 1998) over other hotels in the city and the recent refurbishment demonstrates how Holiday Inn Nottingham is committed to driving business strategy. The modernisation of the rooms ensures that its customers and potential customers are accommodated in rooms that meet global standards in terms of quality and comfort. For its business customers, Holiday Inn Nottingham also offers free on-site car parking, which immediately puts it at a competitive advantage as a business venue as it represents the best value for its cost. The operational functions of Holiday Inn are also better demonstrated by looking its performance objectives which include the quality advantage, the speed advantage, the dependability advantage, the flexibility advantage and the cost advantage (Harris 1989). In order to understand these advantages and the operational functions of Holiday Inn Nottingham better, a detailed examination will now follow of the organisation. Service Package The service package is the bundle of goods and services that is provided by Holiday Inn Nottingham (Lecture Notes). The most visible part of the service package is the hotel's supporting facility which consists of its guest rooms, facilities for guests and business facilities. The hotel offers three different types of guest rooms to cater for the different guest types; from single and double rooms to executive rooms and suites. Guests will also have access to a health fitness centre and internet connections in their rooms. Business customers also have a variety of room choices for their events, and these also include assigned individuals to help them and the use of cutting edge equipment. This demonstrates the hotel's flexibility advantage as the variety of room types enables them to cope and accommodate a wider range of customers. If this variety was not present, and the hotel only focussed on business customers, then it would be missing out on potential business from leisure customers. This flexibility also allows the customer to make changes should circumstances change in their room arrangements. The presence of an a la carte restaurant supports these facilities, as customers do not have to leave the main site to cater for basic needs. As part of a global franchise, the hotel's service package is able to offer consistency which means guests already know what to expect, just as well as the hotel knows what their customer expectations are. Whilst these services meet customer expectations, as a service organisation, the hotel has to ensure it meets its dependability and quality advantages by ensuring that its staff are adequately trained to communicate with and respond to customers in a professional manner. This also includes ensuring that staff are able to deal with and resolve customer requests and queries in a timely manner. The organisation also has to take extra care with its business customers, as it has to ensure that the hotel itself, reflects a corporate image and atmosphere that is consistent with business objectives, and this is convenient for the business, hence the provision of free on-site parking and event facilities. Service Design Service design is responsible for ensuring that the needs of customers are satisfied (Chase and Hayes 1991). This will involve the processes that Holiday Inn Nottingham has in place to ensure its customers are satisfied. One of the key processes is that which the customer interfaces with, and the one which enables them to make a room booking. In the case of Holiday Inn Nottingham, it has two such interfaces, the first being its reception desk at its physical location, and the second being their website on the internet. Customers booking rooms via the internet will probably be more concerned with the speed of service and its dependability, as once a room is booked, one would assume that the customer would expect to receive the confirmation of their room booking, which should be made available to reception staff. Therefore the hotel has to ensure that its systems are reliable and integrated with the rest of the hotel operational functions. Once the customer has reserved their room, they would probably expect to find it easy to navigate the hotel, in terms of finding catering facilities and others without getting lost. This would mean that booking systems would need to take personal circumstances into considerations such as locating the elderly and disabled closer to the restaurants and emergency exits. The hotel's location also ensures that it captures and is accessible to a wide range of customers, to remove any perceptions of exclusivity. Capacity planning is also part of the service design, and the hotel has automated to ensure that internet and physical bookings are synchronised. The hotel also has plans for periods when it likely to be operating under capacity and these include running attractive offers for the business community and leisure travellers. Location Issues Location is the geographical positioning of an operation relative to the input resources, other operations or customers with which it interacts (Chase et al 2001). in this case, location will refer to the geographical positioning of the hotel in Nottingham in relation to customer accessibility. The hotel is located very close to the city centre which means that it can capitalise on customers that depend on public transport, and its location also allowed the hotel to develop car parking facilities. In this respect, Holiday Inn Nottingham is probably one of the best located hotels, as its customers have access to transport facilities as well as other city centre amenities. For leisure customers, they can go shopping or visit attractions without venturing too far out of the city. For business customers, the hotel enables their guests to drive and park at the hotel, and also enjoy the amenities in the city centre. Managing capacity and demand Capacity determines the number of rooms that the hotel can make available. With its city centre location, the hotel can make an assumption that most of its customers will be booking on a short-term basis, which means they will potentially have a high turnover of rooms. This will require adequate levels of staffing to ensure that rooms are available within a relatively short period of time. Capacity will also affect the supplies that the hotel needs to obtain, such as food. Capacity can also be managed by controlling the demand for the service (Blackstone 1989, Buxey 1993). This means that during times of low occupancy or when the hotel is being under-utilised, the hotel can promote and market its services through a variety of channels. Managing facilitating goods As a hotel, Holiday Inn Nottingham has to keep an inventory, which is defined as the stored accumulation of material resources in a transformation system (Buxey 1993, Fitzsimmons and Fitzsimmons 1994). As a service organisation, the hotel has to facilitate food items, drinks, and toilet items, cleaning materials, staff and other goods that contribute to the comfort of the customer. The hotel has to ensure that it has adequate staffing levels at any one time, and this would be considered as an anticipation inventory (Buxey 1993) because the hotel has to plan for differences in supply and demand. So for instance, during peak tourist periods the hotel has to take on more staff to cope with the anticipated increase in demand. During the quieter months, it does not need to take on much staff, as the demand will be lower. The hotel is able to use this type of inventory system as it is able to predict the demand based on data it has stored. However, this type of inventory system cannot be used for the items such as food, drinks and materials as their demand cannot be predicted due to the fact that food items can be consumed by business guests, diners and not only by hotel guests. Therefore these items are managed using the buffer inventory which compensates for uncertainties in supply and demand (Slack et al 1998). This involves maintaining a stock to cope with unexpected increases in demand, which means that if the hotel normally has a drinks consumption of 10 000 drinks, then it would have an additional 10 000 in its inventory. Quality Management Managing quality is important for a service organisation, as most customers are likely to associate quality with the service, which is comprised of staff. This is different to quality in the manufacturing industry which is associated to the product. Holiday Inn Nottingham uses the user-based approach to managing quality which ensures that their service is fit for purpose (Oakland 1993). This would entail ensuring that staff are consistent with their approach to guests in the way of room layout, food and drinks ordering and delivery and general customer service. Quality Management Quality can be defined as the consistent conformance to customers' expectations (Zeithaml et al 1990, Dale 1994). For Holiday Inn Nottingham's customers, this would mean providing rooms that are adequately furnished, clean and comfortable, the provision of food and drink in a timely manner, and a superior customer service. In order to ensure that their services and organisation conform to customer expectations, Holiday Inn Nottingham would have defined their quality characteristics which are functionality, appearance, reliability, durability, recovery and contact (Slack et al 1998). Functionality refers to how well the product or service does the job for which it is intended (reference) and in this case study the functionality of the hotel is that of providing rooms that allow guests to get a good night's sleep for instance, and in the case for business guests, it would be how well the facilities meet their requirements. As stated earlier, the hotel's business facilities include equipment such as DVD players, projectors, faxes, and other business equipment which enhance the functionality of their business venue. Likewise, with the guest rooms, wireless internet and broadband internet access is also available which enhances the functionality of the room as it means guests can perform tasks that they would probably do at home. Functionality needs to be managed as it can be the differentiating factor for making the choice for customers. The second quality characteristic is that of appearance which refers to the sensory characteristics of the product or service in terms of its appeal, look, feel, sound and smell (Slack et al 1998). For Holiday Inn Nottingham this would involve managing their dcor and the choice of materials they use to furnish guest areas and their exterior. Business customers need to feel that the venue is appropriate for business events, and leisure guests will also need to feel relaxed and secure in their environment. For instance at Holiday Inn Nottingham, the exterior is complimented by the green foliage which could be considered as presenting a peaceful environment; whilst its interior is very simple in design. The reliability characteristic is the consistency of the service performance over time (Slack et al 1998), and to meet this characteristic, the hotel ensures all staff receive induction training on starting, and provides regular training throughout the course of their employment. This training is also consistent with the hotel being a part of a global franchise. This standardises the reliability characteristic across the world. The durability characteristic refers to the total useful life of the service (Slack et al 1998). As part of a global brand, Holiday Inn Nottingham already has its durability characteristic managed by the franchise owner who manages this through the standardisation of processes and procedures. The association with the Holiday Inn brand also makes the hotel identifiable to customers, who will probably associate it with quality. This brand identification will contribute greatly to its quality characteristic. The recovery characteristic refers to the ease with which problems with the service can be rectified or resolved (Slack et al 1998) and once again this is dealt with through the standard training that employees will receive which will require that certain processes and procedures are followed to resolve an issue. Another important point to consider with recovery characteristic is that once a problem is resolved, the solution should be integrated into normal service delivery to prevent similar problems from arising. The final characteristic is that of contact which refers to the nature of person-to-person contact (Slack et al 1998) which definitely occurs within the hotel environment. Once again, this will involve training staff to recognise personal situations and emotions and to react to these in a professional manner. For instance, this will include exercising empathy where a customer is distressed, and also being polite. Its close location to the city centre will also mean that staff have to be knowledgeable of the attractions and services available in the city centre, as well as tourist attractions. Conclusion Holiday Inn Nottingham occupies an enviable position in the city centre which means that it has to ensure that is service operations exceed customer expectations if it is to retain a large portion of potential revenue. Holiday Inn Nottingham also benefits from being part of a global franchise, which means that it is a recognisable brand which customers will trust to deliver an acceptable service delivery. However, these advantages also place pressure on the hotel to maintain its quality advantage if it is to remain competitive. References Blackstone Jnr, WH. (1989). "Capacity Management." South Western Buxey, G. (1993). "Production Planning and Scheduling for Seasonal Demand." International Journal of Operations and Production Management, Vol 13 (7). Chase. RB., Aquilano, NJ and Jacob, FB. (2001). "Operations Management for a Competitive Advantage", Ninth Edition, McGraw-Hill Irwin Chase, R and Hayes, RH. (1991). "Beefing up Operations in Service Firms." 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