Operation Management and Decision Making: Rotana's case - Essay Example

?Running head: Rotana Hotels Operations Management and Decision Making Insert Insert Grade Insert 24 January OperationsManagement and Decision Making 1. Introduction of the organization Rotana is a collection of hotels that operate in the Middle East and Africa that can be regarded as the leader in hospitality industry in the region. The Rotana Hotel Management Corporation Ltd was established in 1992 with its first property being opened in 1993 (Rotana Hotel Management Corporation Ltd, 2012c). It has since expanded its operations to several countries in this geographical region. The company has 43 hotels and resorts that are distributed across 14 countries in the Middle East and Africa. The management of the hotel has scheduled to open seven new hotels in 2012 in countries like Bahrain and Jordan (Rotana Hotel Management Corporation Ltd, 2012a). It has plans of expanding its premises to reach 70 hotels in the world by the end of 2012. The vision of the organization is ‘to be the leading and most dynamic company in the Middle East ad Africa operating a range of comprehensive products and brands that aim to meet all the requirements of our guests’ (Rotana Hotel Management Corporation Ltd, 2012a). The writer chose to examine the operations at this company due to the seemingly successful operations management that has seen it expand its operations over the last two decades since its establishment. An example is given of the operations at Amwaj Rotana, one of its outlets. The steady expansion of the facilities of the organization is described easily by the principle of ‘getting it right’ first time and every time that has been applied by the team of management professionals (Rotana Hotel Management Corporation Ltd, 2012a). Realizing this kind of impressive growth requires the organization to understand the trends in the Arab hospitality industry including the lifestyle of the potential clients as well as the local eating habit. As such, Rotana Hotel Management Corporation Ltd has four hotel brands that meet the targets of each client: Rotana hotels and resorts, Centro Hotels by Rotana, Arjaan Hotel Apartments by Rotana and Rayhaan hotels and resorts by Rotana (Rotana Hotel Management Corporation Ltd, 2012a). Guest meeting rooms that are fully equipped, gym, and leisure facilities are some of the services offered by the company (Ancell, 2006). Brands like Centro by Rotana provide mid-market accommodation to the customers around the Sharjah Airport (MEED, 2007). 2. Input-Process-Output diagram Input In the diagram, input point to the situation that called for an action. In the hospitality industry, the clients bank so much on the quality of the services that they receive from the service providers. They will be attracted to organizations that have reliable, efficient, and sufficient services with quality staff. The organization needs information about the clients and how to meet these needs. The management of the organization would also want to maximize the returns from the investment of the stakeholders in the company while still having a competitive advantage over the competitors. This can only be achieved by providing quality services to its clients in order to attract and retain these clients. The materials are scarce and needs to be used optimally. The employees also need to be satisfied with the working conditions. Processes These refer to the mechanisms that were applied or are to be applied by the management of the organization. Processes are a series of actions or interventions that the management of the organization employs to ensure that its desired objectives are realized. These include the identification of the core business processes and scheduling activities with the allocation to the available resources considering their capabilities. The changing needs of customers can be identified through market and marketing research. During the operations, orders are received from the clients to the resort in advance to facilitate scheduling of activities. A monitoring and evaluation scheme is then developed to check if the processes are executed as planned and possible adjustment made. Output This refers to the results that are achieved or likely to be achieved through these interventions. Output is the ultimate/desired outcome realized and includes customer satisfaction, optimal use of resources, profit maximization, and employee satisfaction. The organization is able to cut down operations costs, provide quality services, retain customers, and thus achieve the desired objectives of maximizing returns. 3. Planning and Control 3.1. Essence of planning and control The development of business processes as a component of the management processes in a hotel involves the description, establishment, and direction of the processes involved in transforming inputs into output (Drljaca, n.d., p.758). Planning and control in a given business company involves establishment of a positive compromise between the demands of the organization’s customers and the ability of the organization to provide quality products and services. The planning process involves establishment of the goals and objectives of the organization, examining the current situation in the organization, focusing on the resources that can help in achieving the objectives, identifying the potential barriers to realizing the objectives, and developing a set of actions that can help achieve the objectives. A schedule will outline the sequence of activities that are to be carried out in the future and the necessary resources linking it to inventory management (Wild, 2002, p.381). Controlling becomes essential after the planning process and activities have been scheduled to take place in some order. It involves monitoring and evaluation of the performance of the processes and making appropriate adjustment (if the performance is not adequate) in order to ensure that the desired goals are achieved (Lester, 2006). In other words, ‘control is the process of coping with changes to the plan and the operation to which it relates’ (Slack, p.293). It is particularly important because the future situations cannot be predicted precisely to allow for exact allocation of resources. It is developed on the assumption that a standard plan has been developed from which some level of performance can be evaluated to make appropriate decisions (Bragg, 2004, p.1). Several avenues of fluctuations may be encountered in the implementation of the activity plan. The overall effectiveness of control system will depend on the components of the system like planning and measurement (Flamholtz, 1983, p.157). 3.2. Strategic planning at the organization The success of the organization can be achieved if it is able to utilize its available resources to achieve the highest possible level of performance. This ability will form its operational strength. The management of the organization has realized that their sustainable development can be achieved if much research and development is carried out in order to improve the operational efficiency without affecting negatively the quality of their services to the clients (Rotana Hotel Management Corporation Ltd, 2012b). The planning strategy that the organization employs involves an identification of new areas that can promise improved performance for every property that is within the company’s portfolio. The management then analyses the operational costs that can be cut down from the management of these new contracts across the regions that it operates (Rotana Hotel Management Corporation Ltd, 2012b). 3.3. Scheduling of operations Concept planning is carried out at the launch of every property of the organization. Thus, in the establishment of every facility of the Rotana hotel group, the operations are scheduled in some definite order. a. Identification of a location and potential property The initial step in establishing a facility is identification of a property to be developed or expanded and its geographical location taking into account their potential. The company seeks to increase the returns of the stockholders as well as the returns on leadership by increasing its premises and areas of operations in regions of Middle East and North Africa (Rotana Hotel Management Corporation Ltd, 2012b). The company examines the location of a given property, launch timing, and its feasibility in business. It understands the need to study the potential of the market in which the property is located as well as the state of the property itself. The prospective properties are then given extensive development and renovation by an executive team of professionals who ensure that its infrastructure is improved to the conventional standards. The organization understands the changing needs of the clients. One of the latest facilities developed by hotel group is the Rose Rayhaan Hotel in Dubai that is described as an alcohol free hotel and located just few minutes away from other two hotels of the group (Murray, 2009). Through identification of these potential areas as well as property, the Rotana Hotel group has entered a deal with Summit Hotels, a hotel management company in the Middle East, to establish a 5-star hotel in Baghdad, Iraq (Ferguson, 2009). Even though the region is war-torn and may not be fit for foreign investment, the organization has identified a location that has high security in the center of the city. The facility that was scheduled to start operating in 2012 will have rooms and suites, conference facilities, restaurants, and bars (Ferguson, 2009). b. Measuring the space requirements Space to be occupied by a hotel facility is one of the success factors in this hospitality industry. The company employs proper facility design to ensure that the guests receive the necessary comfort from the facilities and that the space is used effectively without compromising the net revenue as well as health and safety of the clients and employees (Rotana Hotel Management Corporation Ltd, 2012e). c. Prescribing foods and beverages Food and beverages form fundamental components of a hotel and will influence the overall quality of services. The company constantly reviews its food and beverage outlets to inject new concepts whenever necessary. Food and beverage in conjunction with the marketing departments conduct marketing research to understand customers’ changing needs, the management conducts staff training to improve their productivity, and the quality control sections contribute to development of new ideas through ensuring control over quality. d. Prescribing the guest facility needs A number of facilities will be necessary to ensure the comfort of the guests when on board. These include health facilities, sports and recreation facilities as well other business solution services. The appropriate facilities will depend on the region. e. Property design The above analysis form guidelines to be applied by the architects and the interior designers. They are used in the development of a new facility or in renovating an existing property to meet the specifications. The proprietary Rotana building and management systems that operate according to the property needs are applied in the progressive evolution of the core values of the property to ensure that it lasts for a lifetime (Rotana Hotel Management Corporation Ltd, 2012e). 3.4. Scheduling of operations at Amwaj Rotana After the establishment of every facility, the operations are carried out according to the laid procedures. The management at each outlet outlines a schedule of activities that are to be used by the employees. Scheduling on operations involves matching labor resources to the customer demands (Young, 2009, p.188). It gives time and sequence of activities to be executed (Shim & Siegel, 1999, p.362). An example is the work schedule that is used at Amwaj Rotana, one of the group’s outlets located in Dubai, UAE. The facility at Amwaj Rotana is situated at Jumeirah Beach with restaurants, sauna, fitness center, massage, outdoor swimming pool, shops in a hotel, business centers, and internet service centers among many others (AME Info FZ LLC, 2007; Booking.com, 2011). The operations at Amwaj Rotana are executed according to the pre-established schedules that are also applicable in other hotels and resorts of the Rotana group. Much of the activities are performed on regular basis. The hotel has a manual that defines the performance standards for service of food and beverage. The arrival of guests is irregular and so a response is given when there is demand. The regular activities are scheduled as below. Preparation of the service team including hiring and training of the staff (performed in the first few weeks) Estimating the expected hotel occupancy and allocating the necessary resources (labor and other operating costs) Keeping record of the available inventory to ensure that what will be required is available (continuous) The guests to book online via credit cards, through phone or postal address in advance so that arrangements are made. guests to notify the management of the hotel on their estimated arrival time (Booking.com, 2011) Reception of guests: Check-in begins at 1400 hrs and the guests have to present the credit cards used for this booking. The entry of children below the age of 12 is allowed between 900 hrs and 1700 hrs when they in the company of some senior (Booking.com, 2011). The check-in includes allocation of hotel rooms to the guests. The guests are guided on the available facilities and services at the resort and the location of each of the facilities Checkout: this is carried out up to midday every day. Includes checking the conditions in the facilities that were being used by the guests to ensure they are in place. Update the inventory record appropriately (a continuous process) Then there is regular maintenance of the facility in readiness for the next guests’ arrival (a continuous process) 3.5. Reordering of products The company applies modern technology in the management of its inventory across the various groups of resorts and hotels. The company’s procurement processes are governed by the simple principle that ‘proper financial management can only be achieved through complete transparency and total control’ (Rotana Hotel Management Corporation Ltd, 2012d). The organization has advanced ERP systems that give consistent information to the stakeholders on the occupancy trend, employee productivity, or cost efficiency in their property. The company carries out continuous review and evaluation of the management and operations performance through the integrated information systems, practical policies and a two-tier audit process (Rotana Hotel Management Corporation Ltd, 2012d). In the procurement process, the management of the company is concerned with exercising effective control over the operating costs like transportation or maintenance of an inventory. The proper control over every operating cost is achieved through the company’s operations manual and authorization systems (Rotana Hotel Management Corporation Ltd, 2012d). There is also the corporate materials department that seeks information globally on the quality and prices of products to ensure that the company procures the best quality of products at good prices (Rotana Hotel Management Corporation Ltd, 2012d). With these strategies in place, the organization has been able to maximize growth of its sales with controlled operating costs. 4. Conclusion The company has an excellent planning and control mechanism that has seen it expand its operations into many countries in the Middle East and Africa. It applies an organized strategic plan in identification of the potential area for expansion of its outlets. The operations at each of the outlets are carried out according to the manuals on established performance standards. These are used by different departments like the materials department, quality control, and food & beverage among others. The activities in the outlets are performed according to a predefined schedule with possible adjustment to the schedule. The company also applies enterprise resource planning ERP) system in the management of its inventory. This ensures that reordering of products is carried out at the appropriate time so that costs are minimized while satisfying the customers. Reference List AME Info FZ LLC. 2007. New opening at Jumeirah Beach- Dubai, Amwaj Rotana Resort. (Online) Available at http://www.ameinfo.com/113601.html [Accessed January 24, 2012] Ancell, H. 2006. Travel Trade Gazette UK & Ireland, Sep 2006 Supplement. http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=6&hid=126&sid=0ea621ec-95fc-4038-a0ce-5fc4c6e38e0a%40sessionmgr112 [Accessed January 24, 2012] Booking.com. 2011. Amwaj Rotana, Jumeirah Beach-Dubai. (Online) Available at http://www.booking.com/hotel/ae/amwaj-rotana-resort.en.html [Accessed January 24, 2012] Bragg, S. 2004. Controller’s Guide to planning and controlling operations. New Jersey: John Wiley and Sons Drljaca, M., N.d. Methodology of business process development in a hotel. Creating customer value in Tourism and Hospitality Industry, pp.752-763. (Online) Available at http://www.hdmk.hr/Dokumenti/Drljaca_Miroslav-Methodology_of_Business_Process_Development_in_a_Hotel.pdf [Accessed January 24, 2012] Ferguson, M. 2009. Rotana steps up Iraq plans. Travel Trade Gazette UK & Ireland, Iss.2848. (Online) Available at http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=7&hid=126&sid=0ea621ec-95fc-4038-a0ce-5fc4c6e38e0a%40sessionmgr112 [Accessed January 24, 2012] Flamholtz, E. 1983. Accounting, Budgeting and Control systems in their organizational context: theoretical and empirical perspective. Accounting, organizations and society, 8(2-3); pp153-169. (Online) Available at http://www.mgtsystems.com/media/1476.pdf [Accessed January 24, 2012] Lester, A., 2006. Project management, planning and control: managing engineering, construction and manufacturing projects to PMI, APM and BSI standards. Oxford: Butterworth-Heinemann MEED. 2007. Sharjah boosts hotel capacity. MEED: Middle East Economic Digest, 51(18). (Online) Available at http://web.ebscohost.com/ehost/detail?vid=6&hid=126&sid=0ea621ec-95fc-4038-a0ce-5fc4c6e38e0a%40sessionmgr112&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bth&AN=25093035 [Accessed January 24, 2012] Murray, R. 2009. Rotana hotel to be 'world's tallest. Travel Trade Gazette UK & Ireland, Iss. 2890. (Online) Available at http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=7&hid=126&sid=0ea621ec-95fc-4038-a0ce-5fc4c6e38e0a%40sessionmgr112 [Accessed January 24, 2012] Rotana Hotel Management Corporation Ltd, 2012a. Rotana: Development-Expansion http://www.rotana.com/expansion [Accessed January 24, 2012] Rotana Hotel Management Corporation Ltd, 2012b. Rotana: Development-Strategic planning. 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