Operation Management - Research Paper Example

? Operation Management s Executive summary Hotel is complex business unit that belongs to the service industry. It provides clients with a range of services and has its own features. There are methods developed by scientists and managers to help to coordinate processes of design, supply, planning, shop-floor control, environment, technology and quality aspects of the business. The very first aim of operations manager is to understand all the processes. For this aim I have used the Black Box model and Business process mapping. These tools help me to analyze the current situation of the business. The next step was determining fields to be improved and utilizing approaches to make the business more effective. I have used Benchmarking, "Lean," and Business Process Reengineering for this purpose. I believe this approaches are the most suitable for the case of hotel business. I focused on shop – floor control process to examine it in more detail. I have chosen this operation because I believe this is one of the most important aspects of the hotel business. There are some considerations to analyze when applying the methods. At the same time there are some difficulties in application of the methods on practice. The way to solve them is to have a picture of all the business, not a particular process only and pay attention of each process features at the same time. Hotel is complex business that belongs to the service industry. It provides clients with a range of services which might be considered as separate business units, for instance, restaurant and hotel. At the same time, incorrect functioning of one unit or even service might negatively influence all the business. This makes operation management very important in this business and ability to set each process so that all hotel is functioning as one mechanism is considered as the mix of science and art. There are methodologies developed by scientists and managers to help to coordinate processes of design, supply, planning, shop-floor control, environment, technology and quality aspects of the business. The selection, collection and analyzing data must be accorded to the aims of the manager. I attempt to understand the business, analyze all the processes, detect fields for improvement and utilize tools and approaches to make processes more effective. Therefore, methods of the Black Box, Business process mapping, Benchmarking, "Lean," and Business Process Reengineering were used. Although, there is core information about the hotel I need some more to provide quality research and implement the tools. First of all I need a list of processes in the hotel with their description, indicators of effectiveness, input resources and output quality. The very important information is the flow of clients for each of the processes. Besides, I need features of the hotels environment which influence the processes. For example, it’s suppliers, targeted clients, and other circumstances. Therefore, it is not enough to know only general information to implement the most of process improvement methods. First of all I would use the Black Box model to analyze the hotels activity in general, understand basic processes in the hotel and examine their effectiveness. Hotel is a kind of organization that has its inputs and outputs. There is a need to understand inputs and outputs before opening the “Black Box”. Inputs in hotel are 4 M’s: Manpower is all work of hotels personell (waters, hostess, administrators, cooks etc.), machinery is all kinds of mechanisms in the hotel that are used more than one operational cycle (kitchen ovens, ventilation system, cleaning machines, dishes etc.), materials are everything not inclyded in Manpower and Machinery that is used for only one operational period (food, napkins etc.). Money is special kind of resources needed to provide a hotel with neccesary oportunities to buy other three M’s when they are needed. The output of the hotel is different kind of services for their clients, for instance, sleeping, feeding, entertainment etc. After analyzing hotel’s Black Box I would analyze each process’ Black Box. These give us information needed to examine effectiveness of all the system and of each process in particular. Effectiveness is the difference between inputs in the system and its outputs. If outputs are bigger than inputs, the system is ineffective. Usually managers measure effectiveness in terms of profitability, though other indicators could be used as well. After analyzing inputs and outputs its time to “open” the Black Box and see what is happening inside. The next step is Business process mapping (BPM). This activity defines exactly what a business entity does, who is responsible for each stage of production process and what standards to satisfy. Once this research is done, the requirements of every process as well as of all business are determined and full understanding of business process is gained. Business process mapping is the first step in gaining control over an organization (Deming, 1982; Juran, 1988; Taylor, 1911). There are four major steps in the process of BPM: 1. Process identification – determining of every step of a process and process consequence. 2. Information gathering - identifying indicators, objectives, and risks in a process. 3. Interviewing and mapping - understanding the point of view of participants in the process and designing actual maps. 4. Analysis - utilizing tools and approaches to make the process run more effectively and efficiently. Therefore, Business process mapping provides us with necessary understanding of all business process and information for utilizing tools to make the business run more effectively. Other method to apply for the hotel would be benchmarking. Benchmarking is the process of comparing one's business processes and performance metrics to industry bests and/or best practices from other industries. Dimensions typically measured are quality, time and cost. Improvements from learning mean doing things better, faster, and cheaper.In the case of our hotel this would be identifiyng a hotel or hotels that provide the best service in the city or area and compare each part of production process and the overral businesses. I would apply this practice in continious way to monitor the market and see what improvement the competitors have made. In case of the hotel I would use 12-step benchmarking methodology developed by Robert Camp (1989). The following are proposed actions for the hotels benchmarking application: 1. Identify hotels problem areas – I believe, this is the most important part of benchmarking. In process of identifying problems a number of different techniques might be required. I would use the Black Box model, informal conversations with clients and employees different kinds of research such as surveys, focus groups, fanincial analysis, quality reports, process-mapping etc. The problems might be found in areas of design, supply, planning, shop-floor control, the environment, technology and quality. Before embarking on comparison with other hotels its important to learn all the processes perfectly. 2. Identify other industries that have similar processes - For instance restaurants, taxi-services, hostels etc. 3. Identify organizations that are leaders in these areas – Finding the best hotels, restaurants and other similar services in the city or even in the country. Consulting clients, suppliers, trade associations, and magazines to determine which companies are worthy of learn about. 4. Survey companies for measures and practices – There must be a list of measures for each of activity areas. Surveys are typically masked to protect confidential data by neutral associations and consultants. 5. Visit the "best practice" companies to identify leading edge practices – I would look for the similar hotels to mutually exchange information beneficial to all parties. This would give the opportunity to get more information and create a group of similar interests. 6. Implement new and improved business practices - Take the leading edge practices and develop implementation plans which include identification of specific opportunities, funding the project and selling the ideas to the organization for the purpose of gaining demonstrat Consequently, benchmarking gives an opportunity to see “the big picture”: what level of service we provide, how far our competitors are and the most important what spheres and how to improve to make our business at least as successful as the best companies in the industry. ed value from the process. Lean manufacturing or simply, "Lean," is a production practice that that attempts to minimize or even eliminate expenditures of resources for any goal other than the creation of value for the end customer. From the customer’s point of view, she is willing to pay for broducts that bring some value. In the case of hotel clients would pay for services that satisfy their needs. Nevertheless, companies usually spend money not in client –oriented way. According to Taiichi Ohno, the father of the Toyota Production System there are seven wastes of the company (Japanese term). One redefinition of these wastes for service operations by Bicheno and Holweg (2009) is as follows: Delay, Unnecessary Movement, Incorrect inventory, Duplication, Unclear communication, An opportunity lost to retain or win customers Errors in the service transaction For Lean to be successful, HBS professor Kent Bowen and Steven Spear (1999) have defined a framework of 4 principles, based on the Toyota Production System : All work shall be highly specified as to content, sequence, timing, and outcome; Every customer-supplier connection must be direct, and there must be an unambiguous yes or no way to send requests and receive responses; The pathway for every product and service must be simple and direct; Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization. Therefore, a brief plan of implementation of “lean” in the hotel is as followed: 1. Senior managers agree and discuss their lean vision, 2. Management brainstorm to identify project leader and set aims 3. They develop communication plan 4. Management looks for volunteers from different processes and forms the Implementation team 5. The training of the Implementation team 6. Management select a Pilot Project to implement 7. Run the pilot project, making evaluation and review 8. Stabilize the positive results by teaching supervisors how to train the new standards the Implementation team developed 9. Once management is satisfied with the results, they consider introducing the next lean tool. Business Process Reengineering according to Hammer and Champy (1993) is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service, and speed. These two authors suggested seven principles of reengineering. 1. Organize around outcomes, not tasks. 2. Identify all the processes in an organization and prioritize them in order of redesign urgency. 3. Integrate information processing work into the real work that produces the information. 4. Treat geographically dispersed resources as though they were centralized. 5. Link parallel activities in the workflow instead of just integrating their results. 6. Put the decision point where the work is performed, and build control into the process. 7. Capture information once and at the source (Hammer and Champy 1993). Therefore, this seven step reengineering would streamline the work process. This in turn must stimulate achievement of high levels of improvement in quality, time and cost management. I will focus on shop – floor control process to examine it in more detail. I have shosen this operation because I believe this is one of the most important aspects of the hotel business. Starting shop-floor control improvement of the hotel there is a need to examine a number of considerations such as Volume - Variety Type of Service, Layout, Flow, Flexibility, Ergonomics, Housekeeping, Compliance to legislation (H&S) etc. Therefore, the first decision to make is type of service. There is a few general types of services: - Professional services the example of this kind of services at the hotel might be organization of Tango-party and designing of a new part of the hotel; - Service shops are services that require a some special non-quilified skills. The example of service shops at the hotel might be meeting clients and prepearing food. - Mass services are high-volumed services that usually do not require special skills. These are dishwashing and moving grass. There is a dependence: the higher Volume of the service the lower Variety. The volume-variety type of the service defines some important characteristics of the process and eases it’s future improvement. The second decision is process layout type. There are basic layout types appropriate to Volume-Variety Types of Services. Fixed position layout is appropriate only to Proffesional Service. Process layout might be appropriate for both Proffesional Service and Service shops. Cell layout is approprate for Service shops and Mass services. Product layout is appropriate only for Mass services. Therefore, there is the same dependence between Volume and Variety in layout types as well as Service types. Each layout has it’s own advantage and disadvantage. Therefore, there is a need to choose the layout which stisfies the servise reqirements in the best manner. To do this I would would examine different fixed and variable cost characteristics to determine which basic layout type to use. But in practice uncertainty about the exact fixed and variable costs of each layout means the decision can rarely be made on cost alone. For example, the best layout of service shop of parking clients cars would be process layout of operations as fixed costs are relatively high: waiting for a client – meeting the client – parking a car – coming back – waiting for the client. Layout determines flow. The higher Volume, the more continous the Flow is and the more important the regular Flow is. Another indicator to consider if Flexibility. This is ability to change each peration in the hotel has its own flexibility linked to operations layout. Ergonomics is the application of scientific information concerning humans to the design of objects, systems and environment for human use (Ergonomics, 2011) other issues to keep in mind are Housekeeping, Compliance to legislation (H&S), People etc. After carefull analyzing the process and understanting its type and nature we can apply approaches of Benchmarking, "Lean," and Business Process Reengineering. Nevertheless, there might be some difficulties in application of these tools. It is known that processes in this business are highly interdependent and change in one of them influences all the business. The way to solve this problem is in complex view at the business. In other words a manager must fix all the business, not only one problem at the time. Another difficulty might occur when manager has not take in account all nacessary considerations of the operation and used the general principle. Consequently, Hotel is complex business unit that belongs to the service industry. It provides clients with a range of services and has its own features. There are methodologies developed by scientists and managers to help to coordinate processes of design, supply, planning, shop-floor control, environment, technology and quality aspects of the business. The very first aim of operations manager is to understand all the processes. For this aim I have used the Black Box model and Business process mapping. These tools help me to analyze the current situation of the business. The next step was determining fields to be improved and utilizing approaches to make the business more effective. I have used Benchmarking, "Lean," and Business Process Reengineering for this purpose. I believe this approaches are the most suitable for the case of hotel business. I focused on shop – floor control process to examine it in more detail. I have shosen this operation because I believe this is one of the most important aspects of the hotel business. There are some considerations to analyze when applying the methods. At the same time there are some difficulties in application of the methods on practice. The way to solve them is to have a picture of all the business, not a particular process only and pay attention of each process features at the same time. Works Cited Bicheno, J. (2008) The Lean Toolbox for Service Systems, PICSIE Books. David Charles Heinze (1982). Management Science: Introductory Concepts and Applications Deming, W.E. (1982), Out of the Crisis, Cambridge University Press, Cambridge. Drucker, Peter (1972), Work and Tools, in: W. Kranzberg and W.H. Davenport (eds), Technology and Culture, New York. Fisher ML (1997) “What is the Right Supply Chain for your Product”, Harvard Business Review, (Mar-Apr) pp105-116 Garvin DA (1988) “Managing Quality”, New York: Free Press. Gomez-Mejia, Luis R.; David B. Balkin and Robert L. Cardy (2008). Management: People, Performance, Change, 3rd edition. New York, New York USA: McGraw-Hill. Hammer, M. and Champy, J. A.: (1993) Reengineering the Corporation: A Manifesto for Business Revolution, Harper Business Books, New York, 1993. Hanna, Julia (22 October 2007). HBS - Bringing "Lean" Principles to service industry,published. Huczynski A, Buchanan D (2001) “ Organisational Behaviour: an introductory text”, Harlow: Prentice Hall. Juran, J.M. (1988), Juran on Planning for Quality, Free Press, New York, NY. Kohlbacher, M. (2009): The Effects of Process Orientation on Customer Satisfaction, Product Quality and Time-Based Performance. Paper presented at the 29th International Conference of the Strategic Management Society, Washington DC. Roberts, Lon (1994), Process Reengineering: The Key To Achieving Breakthrough Success, Quality Press, Milwaukee. Seddon, John (2003) Freedom from Command and Control: A Better Way to Make the Work Work, Vanguard Press. The Ergonomics society, 2011. Retrieved from www.ergonomics.org.uk Figure 1. Proposed Process Map for the Hotel. Figure 2. The components of the Lean. Figure 3. The Process Reengineering implementation. Read More