An Investigation into Operations Management Issues within the Hospitality Industry - Essay Example

?Executive Summary   There exist a number of operations within a normal production routine of any industry. In many cases, these operations become more complex due to the presence of parallel production lines that are involved in manufacturing / producing smaller parts at the same time and place. Operations management encompasses a varied range of activities – resource planning and procurement, activity scheduling, logistic management, and HR management. Efficient management of these activities results in improved productivity of the entire operational chain. With improved productivity and operations, the cost decreases and quality is improved. Since the above mentioned activities are integrated with each other closely in a operations chain, it I important for any company to control and manage these activities to boost its performance and profits. This article will concentrate upon the productivity improvement concerns for a restaurant – Good Foods Restaurant. Aim The various productivity concerns that the company faces in its daily operations and how these operations can be optimized to increase the production efficiency will the topic of study of this paper. Methodology   The preferred methodology in this case was to study a number of case studies in the hospitality sector that implement any kind of production improvement techniques and then study their previous conditions and the results after the recommendations were executed. Also other forms of literature available from books, online were studied. Company Introduction The company is involved in the restaurant business to its customers across 17 outlets. Good Foods has been known in the market for its consistent quality of the food being served and a strong focus upon the business. With several dishes being served to its customers, and also catered in some cases, on a regular basis, the company has received the constant positive reviews from its clients. The hotel company was formed in the year 1975 and has built a strong tradition of hard work and faith. The hotel specializes mainly in the sauces, soups and flavor bases that are also marketed under a number of brand names by the hotel company. With more than 3 production units in the region, Good Foods Ltd. is trying hard to make higher margin profits for itself. In the food sector and hospitality service industry, it is important that in order to remain competitive, Good Foods maintain efficient operations in production and marketing. At present the company own three plants which are not being operated in a desired optimized manner. Therefore, to achieve targets, the company decided to implement some operations management techniques to improve productivity and its hospitality services.   Current Production Phases     The operational methods that are being used by Good Foods to manufacture products that are marketed by the company are quite complex in nature and comprise of a number of multifaceted operations that are spread across the 3 production units. The initial phases that are a part of this operational chain at Good Food are the detailed scheduling which is done by the management to decrease the down time for each of the three production units. The production scheduling is done manually by the company managers. The production scheduling phase is followed by the resource planning and procurement phase in which the managers decide the quality, quantity of resources that are to be allocated to each line and at what time. The quantity, quality and time of resource procurement are very important at this point in order to maintain a steady flow of production and product quality. At many instances, the managers noticed that since the resources need to be often shared at many points and levels in the production chain, there existed some sharing concerns. There were variability and waste concerns that were pointed out by the managers. The last step of the production line consisted of cleaning and preparing the line for a new batch of production. It is to be noted here that due to the limitation of the length of the paper, the production of the products marketed by the hotel company and the operations chain within the kitchens at the hotel are studied as one.   Production Problems    Optimizing the production process was the main concern for the management at Good Foods. Some of the concerns are listed below – Disorganized manual allocation and ordering of resources that are needed by each of the production lines during a specific time frame Poor quality concern for resources which leads to poor quality final product of the production line Increased waiting times for resources to arrive and while shifting from one product line to other, high down times due to in expertise or mismanagement Poor scheduling of subsequent tasks and inconsistent batching   All the above mentioned problems resulted in inefficient and costly operations at Good foods Hotel. After the identification of problems, the management was required to identify a set of improvement procedures to enhance the productivity levels and add more value to the final products and services. The management realized that in order to make the system more efficient, the three production plants were required to be integrated with each other and automotive methods need to be introduced to reduce manual errors. The main motive behind integrating the three plants was that none of these plants was able to single handedly handle the growth and expansion targets set by the management. Production line prioritization, consistent resource flow, batching, recipe creation are some of the improvement techniques suggested. With the help of these recommendations, it was intended that better use of resources, decreased labor costs and transportation costs could be realized. With these aims, the company management came forward with productivity improvement strategies. The following section will study these recommendations.   Recommendations for Production Improvement  In order to execute the recommended solutions, the primary task was to select a reputed production improvement technology vendor that could assist in establishing the required systems as per recommendations. Initially, a proposed smaller model was introduced to check the viability of the new techniques. The task of integrating the production lines was a complex one and required elimination of some old lines, adding new ones and executing process control and automation strategies across the whole line, (Cummings,.& Molloy, 1977).   The recommended solutions upon implementation intended at the following improvements -   optimizing the accessibility of the production n line tools and equipments More efficient production lines Increasing quality levels and its uniformity Decrease in the number of human errors done by the operators in the production line Offer ease of collaboration as a result of integration of production lines   After the aims at which the solutions targeted were identified, both the company management and the hired vendor were required to make an in depth assessment and discussion of the system requirements and design a latest production and quality enhanced system for Good Foods. The following section studies the various productivity enhancement techniques employed by the management - Recipe control and creation – in order to bring about more consistency in the taste and quality of recipes being served to customers at the restaurant, and also the quality of the packaged goods marketed by the hotel company, recipe control and creation method was introduced. This technique helped the production line managers to set a recipe formation algorithm for each batch which will be utilized by the production line. The tasks involved in the recipe creation will have no variability if a proper recipe creation algorithm is maintained for ach production line. This automatic process and quality control system also helps to manage resources and time in a more channelized manner. This algorithm generated at the start of each production phase consists of the list of resources used, temperature required, final product quality and time required. Batching system – in the case of Good Foods packaged products, big sized orders were taken and processed in one go. However, due to these bulky jobs at the production line resulted in commotion and quality issue. Also the through put time suffered. For this purpose, the production improvement techniques – batch splitting and overlapping were employed which significantly reduced the total flow time within each production line due to smaller batches, (John, 1996). The use of batch splitting was introduced in the continuous production lines and the continuous batches were spilt as per priority. Also batch overlapping was done in some parts which took more time to transfer products from one line to another, which reduced the time to concurrently produce batches along different lines. This productivity improvement technique reduced the through put time for each production line, enhanced the final deliveries’ and reduced inventories as well. Lean production – Lean production approach was implemented by the company to reduce waste and the extra time spend on activities in the production line. Faster replenishment rates and efficient product delivery were the results of the lean approach. For Good foods, specializing in the hospitality service sector, it was important to meet the clients demand on time and with specifications. Lean approach helped the management to get rid of waste activities, and subsequently synchronize the activities for better flow of work and information. Also application of IT techniques combined with lean approach helped to increase the logistics and delivery with the help of real time information available. Point of Sale – Another efficient method to improve production in the hospitality sector is to predict the short term visibility of demand. By predicting these demands within a specific real time frame, helps to co-ordinate the production schedule as per client requests. Application of this system helped the managers to acquire the point of sale data from the selling counters at the outlets and helped them to queue the orders as per requirements. Tracking and Tracing – Process control method of tracing and tracking of supplies and resources that are required in production lines, and controlling the suppliers for each line assured that best optimal use of resources, and timely allocation to each production line. This was done by installing an information system through which effective monitoring was done related to the physical parameters of the resources and their status. It also helped to plan if a new job could be taken up in the line or not, (Sheikh,2003). Data Recording and evaluation – in order to compare the previous and new practices and their results, it was important that the company managers at Good Foods are able to collect and analyze these two sets of data. For this purpose, data card was installed at each production line (both at the start and end of the production line) to the entire data – name of the operator, hours put in by the operators, shift in charge, tasks allocated, tasks completed, ideal and real time taken to complete the tasks, resources allocated, resources used, product desirable, product received etc. are stored in this data card, (John, 1996). These data are then analyzes to compare the performances and set targets accordingly. Computerized administrative system – To reduce the manual errors caused due to human intervention in the production line, a computerized administrative system was set up. This system helped to automatically set daily, monthly targets, based upon the demand data obtained from the POS systems, and other market reports, schedule tasks, allot area responsibility and allocate the required resources to each production line. This system also helped to monitor remote tasks, (Barlow, 1999). Examples of these tasks included activities related to two production lines that exist in two different production units and the status of these activities, required by area managers is then accessed with the help of these computerized administrative systems. This system eliminated the human errors and saved a lot of time which can be easily devoted to more resourceful activities. Web based common portal - The company management took the initiative to introduce a new concept into its systems – a web based common portal system. All the employees, staff were allowed to gain access into the web based portal by entering the allotted username and passwords. They can then collect and share knowledge on various issues like business of the company, customer queries, share new recipes, learn to cook, provide feedbacks on improvements. This would promote better bonding between the employees as well, (Brotherton. 2003) Also, the web based system will soon integrate a separate access channel for the customers where they can log in and gain information about various issues related to the services provided by Good Foods and also submit their valuable feedbacks. Balanced Score Card – This Balanced Score Card method combined the strategic planning as per the business requirements and a detailed structure of the daily tasks to be performed this system also measured the performance against the targets, (Donovan, 2005). Before the Balanced Score Card technique was applied, the Good Foods completely relied upon its financial profits to measure its performances, but after the implementation of the BSC technique, other issues also gained importance like customer service, employee performance and motivation, grievances and their appropriate resolution etc. all these issues came to the forefront of the business strategy in a holistic view. Advantages of Production Improvement Techniques   This section briefly lists the various advantages that were achieved by implementing the above production improvement techniques - Eliminate any variation and impulsiveness present in the system Uncomplicated Recipe creation which was originally a complex task, now is carried on with the help of predefined system programming More efficient use of materials, resources, equipments and other tool handling and low running times for production lines, (Krajewski, and Ritzman, 2002) Reduction in waste activities and information loss due to better It enhanced systems like for data capture and sharing (web based common portal and tracking systems) Demand information visibility and enhanced cooperation in the planning and scheduling area Reduced batch size and low cycle time helped the management to obtain higher service deliveries, and supply chain response times Improved product quality, service levels, higher customer satisfaction and better profits for the company, (King, and Cichy, 2002). Conclusion   Without doubt, the credit of the advantages that resulted for Good Foods hotel company go to the efficient integration of IT solutions with the production chain management. This has indeed helped the managers belonging to the hospitality sector to change their views about the relevance and importance of IT solutions to the hotel industry. Forecasting of product distribution, production requirements, optimizing the circulation through batching, keeping low inventories, helped to manage the business profits. The execution of production control systems and technology assisted the managers to robustly relocate themselves in a stronger position. Keeping low costs and high profits and at the same time managing customer demands in the best manner possible brought about some drastic changes and emergence of a reliable production and quality control system for Good Foods. This example may serve as a good example to other hotels and hospitality sectors which intend to improve their productivity levels and profits. References   1. Johns, N. (ed) 1996. Productivity management in hospitality and tourism. London. Cassell. 2. Barlow, J.F. 1999. Excel Models for Business Operations Management. John Wiley & Sons, Chichester. 3. Sheikh, Khalid (2003). Manufacturing Resource Planning (MRP II). McGraw-Hill Companies, Inc. 4. Brotherton, B. 2003. International Hospitality Management. Oxford, Butterworth Heinemann. 5. King, J.H.,JR. and Cichy, R.F. 2006 Managing for quality in the hospitality industry. Upper Saddle River, N.J.: Pearson Prentice Hall. 6. Donovan, R. Michael (2005).Performance Improvement: Supply Chain management. Available Online at http://www.rmdonovan.com/pdf/perfor2.pdf 7. Krajewski, L.J. and Ritzman, L.P. 2002. Operations Management, Strategy and Analysis. 6th Edition. Addison-Wesley. Reading, Massachusetts. 8. Cummings, T.& Molloy, E. (1977) Improving Productivity and the Quality of Work Life. New York: Praeger. Read More