Operations Management - Essay Example

?Operations management Executive summary This report contains the outline of a few changes recommended for the hotel. These changes have been derivedfrom the analysis of the functioning of a few successful hotels and the research results undertaken by various companies. A conclusion has been reached that new operational techniques such as lean management and benchmarking have to be used to reduce costs and increase revenues and thus to ensure greater success. An in-depth analysis of human resource management also revealed that training of new staff and continuous development of existing staff also results in low turnover and better performance. Last but not the least, effective and competitive remuneration and reward packages have to deployed to employees as happy employees result in happy and satisfied customers. Introduction The hospitality industry is a service industry and most of its products are in the form of intangibles which make both their quality management and measurement a difficult job. Different dimensions of operations management apply to hotels and can be implemented to ensure customer satisfaction. The hospitality service is as old as time but the hotel industry is ever changing and ever evolving. Techniques of operations management in hotels must change with changing circumstances. But still there are four broad areas of management in hotels which also serve as four key functions of the hotel. These four include 1) Food production or buying, 2) Food and beverage services, 3) Housekeeping and 4) Front office receptions. Research methodology Most of the research used is secondary research and the qualitative results of the different researches which have already been done in this field. Qualitative and quantitative studies were combined to form a higher quality of research which linked the great importance of hotel marketing to seize market opportunities. Both qualitative and quantitative research is thought of as complementary to each other and therefore they were mixed. (Malhotra, 2007, p. 176)Examples are also taken from the best practices of different hotels and the causes of their successes have been analyzed and then suggested to be implemented in the hotel functioning. As a business system, a hotel is a complex, dynamic, open and organizational system which seeks to interact with both its customers and the environment. The aim of such a system is guest satisfaction which it tries to achieve by making its functions efficient and effective and providing both its services that is food and beverages; and boarding and lodging at its best. Overall a hotel is supposed to instill a feel-good element in its customers which can be achieved not only by interiors but also by the ambience, the service quality and additional services. These can be also achieved by integrating the latest technology and the latest operational practices with supply chain management, human resource management and quality controls. These activities also revolve around producing a competitive advantage for the hotel. The key features of the hotel environment are employee performance, customer demand and asset protection which are achieved by increasing productivity, providing service and deriving a high income. The result of all these activities if performed well is the optimum quality of service provided to customers. (Peter Jones, 2002, p. 30) Hotel design The environment created by the hotel building is fundamental to the hotel experience. The creation of this environment entails not just the physical safety of the guests but also tending to the comfort needs of the guest. The modern hotel is much more than a place to sleep. It is capable of providing an escapist experience by its design, spectacles and amenities it provides. (Klumbis, 2009) No longer is staying in a hotel retained to getting a clean and comfortable room but today hotel design and environment also play a major role in whether guests receive the ultimate guest experience during their stay. Thus aspects such as noise levels, lighting and other ergonomic factors are of prime importance when designing the hotel. For lifestyle travelers provision of individuality is also very important. Besides that the design and the key features of the hotel lobby are very important as it is not only in the lobby where most of the first impressions are made but it is in the lobby where most of the work, like registration or check-in is being done. Technology Technology has caught up with all businesses and the hotel business is no different. Hotels use computerized reservation systems and large databanks to store information not only about guests but also to keep a track of inventory. Computerized accounting systems are also extremely common in hotels which add to the convenience. The case of Sheraton University City hotel can serve as a prime example of the apt use of technology. The hotel not just wants to provide internet service to all its customers but wants to deliver in-room desktop resources and entertainment solutions. To implement this aim, it used a solution which integrated productivity software and entertainment. Since then the scores on its customer satisfaction surveys have increased and the hotel has been able to raise its room rates thus providing higher income. (tips, 2008)We have learnt before that a greater income contributes to higher productivity and a better quality of services. Emerging technologies also drive a new wave of changes in the way hotels operate and serve their customers. Finding a balance in technology investment is essential for hotel operations as it improves the guest experience through faster service for example quicker check in, checkout etc. It also improves operating efficiencies as it reduces staffing requirements and also reduces the overall general and staffing requirement. (Owen) Quality Quality is considered to be of great importance in the hospitality industry. The main aims of service quality are to ensure in the result in the form of a satisfied customer (MILL, 1986, pp. 39-45). The main focus of quality improvement in the hotels has been in areas of recruitment and training of staff and process measurement and improvement. . Thus service organizations worldwide are shifting their focus to service quality as a priority to carve a niche in the current competitive environment. This allows for differentiation and sustainable global advantage in the market place. (Gounaris,2003) The external components of perceived service quality have been identified as assurance, empathy, tangibles, responsiveness and reliability. (PARASURAMAN, 1985, pp. 41-50) The internal components depend upon timeliness, integrity, predictability and customer satisfaction. Once the external and internal components have been identified, it is essential to develop measures to monitor and measure these components in order to regularly evaluate the performance. The effects of quality not only result in more satisfied customers but they are also reflected in more competitive positioning thus leading to better business results. The measurement of these effects can be directly measured by an increase in profitability and market share. This phenomenon is demonstrated by the results of a research carried in the USA on a sample of 2600 companies between the years 1987 and 2002 and a direct relationship between levels of quality and financial performance was found. (Grove S.J., 1997, pp. 63-85) Two quality achievement approaches can be used by the hotel. The first approach is technical and product related while the second one is customer related. The amalgamation of these two approaches results in the setting of concrete standards which ensure consistency as well as satisfying the customer's needs. (Grzinic, 2007). Thus quality management in both areas should be emphasized upon to reap adequate rewards. Operational practices Operational practices greatly determine how the hotel is going to function and the efficiency it is going to achieve. Besides typical, traditional operational practices which determine supply and sourcing, modern operational practices also have to be used in the hotel. These often include the implementation of six sigma strategies such as lean management and bench marking to ensure optimum performance. The example of Starwood hotels can be used as primary source of inspiration for implementing these strategies into the practice of the hotel. Starwood has a holistic approach towards continuous improvement and for that purpose uses the services of full time practitioners of Six sigma. It measures quality with a three pronged approach which includes improving guest satisfaction, increases revenues and tries to control costs. To control costs, it has even come up with the strategy of giving rewards and coupons to customers who help in saving energy or help save on water and detergents by reduction in the changing of linens. (Woods) The approach also emphasizes on the importance of lean management which not only helps in saving in costs but also deploys more power to employees. The deployment of more power to the employees directly leads to a boost in employee morale and self esteem and results in them working with greater responsibility. This responsibility also comes from the greater accountability since they now have more authority. Benchmarking is another on which the hotel can rely upon for optimum results. The analysis and the conclusion for this study was derived from two-pronged data from the statistical insights of nine hotels. The best practices research team also conducted in-depth interviews with 15 key functional leaders. The results determined that there are multiple areas which have an impact on customer service excellence. Benchmarking or following the best practices in two of the many areas was supposed to derive maximum results. They included training the staff for courteousness and proper incentives and recognition programmes for employees. (Benchmarks for Excellence in Hotel Management: A Best Practices Analysis for the Caribbean Market) It is essential for staff remuneration to be competitive and be benchmarked with industry standards as it could cause a high turnover and dissatisfies employees. Planning Planning is essential for all operations especially those which include the provision of services. The customer appeal and demand is the main objective when planning the provision of both food and beverages or providing housekeeping services or other amenities. The supervision and planning will also include training of employees for example in case of this hotel it will be either hiring of waiters and housekeeping staff who already know how to serve the guests adequately or will include training of new staff who will be trained in both the required skills and the appropriate manners of meeting and greeting. The importance of innovation and marketing to market leadership for hotels Marketing of services is attracting a great deal of attention for both hotel practitioners and researchers because of its extreme importance. Past success of a hotel is no guarantee for future success as both globalization and information levels of customers are increasing. (Odouri, 2010) Sales and marketing activities involve communicating with the target market (Denney G. Rutherford, 2006)and providing them what they want at the right place and the right time at the right price. For the hospitality industry, the changing lifestyle patterns ensure that with the blast of information customers are bound to know what is available in the market and at what rates so primary importance has to be given to promotional and advertising activities. Human resource management Human resource management is extremely important for the hotel industry as it stands or falls on the staff it employs. Factors such as responsiveness, communication and service standards can be improved by training and development of all employees. The first way to achieve this training is to provide on-job and off-job training to all new employees. This orientation will help build confidence in employees and teach them how to do their jobs adequately. For example a junior chef should be asked to only observe in the main kitchen before starting to work or a practice program for all new waiters to get acclimatized to serving customers in style. (Dessler,2009) A significant relationship was found between employee training and their performance in the hotel industry in Pakistan. A study of the Pearl continental hotels showed that employees who had spent more time on training performed better than their non-trained counterparts. (Fakhar Ul Afaq,2010). A different approach to job design is management by objectives. It integrates the hotel's principle targets with the managers own aspirations. It requires the establishment of a list of objectives and then develops a plan to achieve these objectives. Also included is a plan to monitor the progress. This feedback resultant mechanism and management by one's own objectives leads to superior employee performance and thus customer satisfaction. Research has validated that the turnout of having stressors in the work environment has negative consequences. Role ambiguity and role conflict has led to emotional exhaustion.(Karatepe). These stressors have been identified as role conflict, role overload and role ambiguity. This also results in burn out and decreases the quality and effectiveness of employees particularly front line employees which are the most important to hotel success. This can be demonstrated by Research results have also shown that resourcefulness buffers these dysfunctional effects of these stressors. (Nicholas J. Ashill). Thus provision of resourcefulness, clear definition of goals to reduce job ambiguity and moderation of work can reduce burnout and exhaustion in employees. This will also maintain their work satisfaction which is essential for optimum performance. Barriers to implementation The barriers to implementing these changes can be identified as the ever changing demand, the limited availability of resources, differences in customer lifestyles and lack of competitive benchmarking which can all create turbulence in a proper Human resource effort. Other barriers can be the high rates of turnover in the hospitality industry due to the high demand of skilled employees. Thus extreme vigilance is required to retain the staff which has been trained to deliver. Summary There are multiple factors and processes which determine the provision of services in the hospitality industry. They include processes such as the initial planning and development as well as designing of the hotel to suit customer tastes and requirements. This is followed by supply chain planning and the integration of technology to make processes faster and more efficient. The use of technology could be made to alleviate reservations and to keep track of customer services. Proper marketing is also essential for success in the globalized world of today. But the factor of utmost importance which determines the survival of a service industry such as this hotel are its employees. Thus the benefit of employees such as their remuneration and training should be dealt with a hands-on approach. Job designs should be made more efficient to delegate more power to the people and hence resulting in happy employees and thus optimum service quality and satisfied customers. References Benchmarks for Excellence in Hotel Management: A Best Practices Analysis for the Caribbean Market. (n.d.). Retrieved March 12, 2011, from www.best-in-class.com: http://www.best-in-class.com/bestp/domrep.nsf/products/benchmarks-for-excellence-in-hotel-management-a-best-practices-analysis-for-the-caribbean-market Denney G. Rutherford, M. J. (2006). Hotel management and operations. John Wiley and sons. Grove S.J., a. R. (1997). The impact of other customers on service experiences: a critical incident examination of getting along. . Journal of retailing , 63-85. Grzinic, D. J. (2007). CONCEPTS OF SERVICE QUALITY MEASUREMENT. Pula. Haemoon Oh, S. C. (1997). Customer satisfaction and service quality: a critical review of the literature and research implications for the hospitality industry. Hospitality Research Journal , 35 - 64. Johns, N. (1989). Quality Management in the Hospitality Industry: Part 1. Definition and Specification. International Journal of Contemporary Hospitality Management . Karatepe, O. a. (2008). Role stress, burnout and their effects on frontline hotel employees job performance: evidence from Cyprus. International journal of tourism research , 111-126. Klumbis, D. F. (2009). SEEKING THE “ULTIMATE HOTEL EXPERIENCE”. http://fama2.us.es:8080/turismo/turismonet1/economia%20del%20turismo/hosteleria/seeking%20the%20ultimate%20hotel%20experience.pdf. Malhotra, N. K. (2007). Marketing Research: An Applied Orientation. New Jersey: Prentice. MILL, R. (1986). Managing the service encounter. The Cornell HRA Quarterly , 39-45. . Nicholas J. Ashill, M. R. (2009). Job resourcefulness, symptoms of burnout and service recovery performance: an examination of call centre employees. Journal of service marketing , 338-350. Odouri, F. N. (2010). New service development: strategy and process in the hospitality sector in Kenya. Owen, B. E. (n.d.). Evolving Technologies To Drive Competitive Advantage in Hospitality Industry. Retrieved March 11, 2011, from www.hotel-online.com: http://www.hotel-online.com/Trends/Andersen/tech.html PARASURAMAN, A. Z. (1985). A conceptual model of service quality and its implications for future research. Journal of Marketing , 41-50. Peter Jones, A. L. (2002). The Management of Hotel Operations. Cengage learning. tips, M. (2008, April). Hotel Improves Guest Experience And Revenue Through Innovative Use Of Technology. Retrieved March 10, 2011, from http://www.techrepublic.com/whitepapers/hotel-improves-guest-experience-and-revenue-through-innovative-use-of-technology/354562 Woods, R. (n.d.). Starwood Hotels & Resorts Tops Best Places to Work List . Retrieved March 12, 2011, from http://www.isixsigma.com/index.php?option=com_k2&view=item&id=982:starwood-hotels-resorts-tops-best-places-to-work-list&Itemid= Yvonne Guerriera, M. D. (1998.). Research in hospitality human resource management and organizational behaviour . International Journal of Hospitality Management , 145-160. . 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