Operations Management: The New Mauritius Hotels Ltd - Essay Example

 Operations Management: The New Mauritius Hotels Ltd. Executive Summary The success of a business organization largely depends on the strategies established to govern the operations within the company. The various processes and activities that take place on a daily basis inside a company or organization play a crucial role in influencing the outcome in terms of sales and the overall performance. It is important the most appropriate methodologies which do not only enhance the quality standards within the organization but also the effectiveness of the process. In this report, we analyze the concept of operations management with reference to the New Mauritius Hotels Limited, a hospitality industry based in the country. The costs of quality refer to the cost incurred by a company when defects are present in the products released to the market. There are various types of costs of quality incurred by New Mauritius Hotels Ltd. which include prevention costs, appraisal costs, internal and external failure costs. In order to deal with this challenge, the hotel management has remained active with its quality management strategies which involve incorporation of innovation and resource management approaches. The production process at the hotel follows the basic channel where raw materials are obtained from the local environment before being subjected to a series of processes within the organization. For the cuisines, the needed elements are obtained through locally available channels. The process types are effective hence the good return on investment. The productivity ratios are mainly pegged on the level of demand for particular products or services. For instance, the hotel offers on-site restaurants to the clients who make these orders. This minimizes on the cost of production. The plant layout of the organization is such that the work environment is made safe, healthy and spacious enough for the human resource. Table of Contents Title page………………………………………………………………………….1 Executive Summary……………………………………………………………….2 Introduction……………………………………………………………………….4 Quality Management………………………………………………………………4 Process Design…………………………………………………………………….7 Aggregate Planning………………………………………………………………..9 Productivity and Supply Chain Strategy…………………………………………..12 Plant Layout………………………………………………………………………..14 Conclusion………………………………………………………………………….20 References………………………………………………………………………….21 Introduction It is often a key requirement for the management of an organization to put in place the most effective strategies which would enhance the flow of processes, proper analysis of performance trends as well as an effective maintenance of the quality standards within the organization. These entire aspects boil down to the concept of operations management within organizations which encompasses the elements of quality control, aggregate planning, productivity and supply chain strategies, an organization’s plant layout as well as the process design employed to enhance operations. In this report, we analyze the concept of operations management with reference to the New Mauritius Hotels Limited, a hospitality industry based in the country. Quality Management The New Mauritius Hotels Ltd. is one of the fastest growing organizations working within the field of hospitality in the counter. It operates under the brand name of beachcomber hotels. The organization does not only own but also manages various hotels both within the country and on international fronts for instance in Morocco (Bernhard, 2008). Due to the nature of its organizational structure, all the company’s subsidiaries operate under the same brand name. This strategy enables an easy control of operations in addition to other processes taking place within the company. Quality management is a crucial element effectively considered by the organization’s management. Just like any other business organization, the NMH LTD incurs a number of costs of quality. The cost of quality in this case involves the costs that the hotel incurs when implementing processes intended at minimizing defects to the products released to the consumers at the end of the production chain. The hotel also provides various services to a variety of clients. As such, there is an inevitable need for professionalization and personalization of process in order to ensure that services are offered to clients at the highest quality levels (Brotherton and Wood, 2008). Based on the research findings about the organization, it was deduced the costs of quality incurred by the New Mauritius Hotel Ltd. can be categorized into four main types namely; prevention costs, appraisal costs, external failure costs and internal failure costs. To begin with, the prevention costs are the costs incurred by the hotel in in a bid to prevent poor quality products or services from reaching the consumers. In order to minimize the defects on the final products, the hotel management uses various tools such as staff training and exposure, maintenance engineering as well as the strategy of process control. Through the process control tools, it is possible to deduce and hence adjust the processes that are out of control. Such situations may be as a results of wrong interpretations by machines and miscalibration which may result in wrong component ratios and hence a defect on the final product (Carliss, 2000). Each of these stages may involve the use of resource and human expertise like the quality circles hence the presence of the costs. The second cost of quality is the appraisal cost. Before transferring the final products to the consumer, they are always taken through a rigorous process of inspection. This level is always aimed at identifying products with defects and hence removing them from the final shipment. The process involves a team of inspectors hence the resources and amounts used in appreciating the services of the food inspectors at the New Mauritius Hotels Ltd amounts to the appraisal costs. The third type of cost is the internal failure cost (PKF Hospitality Research, 2011). The hotel incurs this cost when the defects detected are to be eliminated before the products reach the consumers. This process may include re-processing the products or adjusting the quality levels which may alter the downtime. When the quality control processes are effective, the defects can be detected at an early stage before handing the products to the consumers (Cohen, 2008). When the goods reach the consumers with defects, then they are likely to be rejected or returned for re processing by the consumers. Such a scenario leads to product recalls, replacements as well as repairs. The costs incurred by the company during this process are referred to as external failure costs. In a bid to minimize the occurrence of these costs through the reduction of defects, the New Mauritius Hotel Ltd has upheld various total quality management strategies. One of the most common strategies applied by the organization involves the use of quality circles. The quality circles involve individuals who meet regularly to deliberate on methods of improving quality (Collings and Wood, 2009). The outcome of these meetings is presented to the board who in return implement them at the right stages of production in order to reduce or completely remove the defects. The other approach in aiding the TQM drive involves the use of statistical process control methodologies. Through this strategy, the less effective elements during the production process are identified and replaced with more result oriented methods. The approach in this case may involve replacing old machines, doing away with outdated menus and cuisines and introducing food stuffs and additional services which adequately meet the consumers’ demands. The hotel administration which also uses the just in time system also conducts empowerment of suppliers in addition to staff training and motivation on quality issues. The technical support given to the suppliers plays a crucial role in ensuring the materials received by the organization for the production process are of the right quality and required standards (Connell and Page, 2010). In order to improve quality, the hotel can invest more on the quality circles and increase the number of personnel whose sole duty within the organization will involve quality enhancement. The company can also carry out more staff empowerment procedures through training exhibitions and conferences. Through these avenues, the workers are exposed on the need to stay responsible in their lines of operation and ensure quality standards in the processes they are involved in (Chase, 2007). Finally, quality within the company can also be improved my ensuring the right machines and other resources are used during the production process. Bad machines, for instance, may lead to miscalibration, mistiming and improper mixing of ingredients leading to low quality outcomes. Process Design The hotel which is one of the largest companies listed in the country stock exchange market uses a standard process of production across all the hotels owned and managed by the organization. The production process involves various channels since the organization does not only deal with foodstuffs, drinks and beverages. The hotel also offers other hospitality services which include overnight accommodation and on-site restaurants. In the production of food, the process basically starts form the kitchen staff where raw materials are received. The personnel then prepare the meals under the guidance of clearly stated recipes and outlines depending on the cuisine in use. To ensure the quality of the final products, the ready foods are taken through a series of inspection processes by qualified personnel operating within the quality circles. Once a menu has been passed as satisfactory, the food is then passed to the consumers. This basically ends the chain of the production process (Daft and Armstrong, 2009). Apart from the outdated manual food processing methods which involve the use of human force, the hotel management has since introduced alternative methods in the production process. These approaches are aimed at improving the quality of products and services availed to the consumers at the end of the day. In the past, the hotel management mainly used human power in most phases of the production process (Giddens, 2008). With the emergence of technology, the organization has secured more state of the machines to replace the formerly used human force. Despite the fact that these machines still rely on human operation, they have greatly reduced the downtime and improved the speed with which the foods are prepared. The alternative methods have also been crucial in enhancing the quality of production since minimal errors are made by machines as compared to cases involving the use of human effort. In addition, the alternative methods have greatly reduced production costs incurred by the organization. For instance with the emergence of food preparation machines, the number of workers have been cut down which in turn lowers the costs the organization would incur in a bid to reward them (Domine, 2008). In order to transform the raw materials into finished products, the company mainly uses three types of production process. First of all, the job production process is employed to minimize irregularities and ensure that the experts concentrate on one particular production before passing their attention to the other. This process may involve either an individual or a group. The second type used by the company is batch production. In this case, a variety of products are produced at the same time within one production process. For instance, the hotel management prepares food stuff and beverages as well as drinks within the same production system. The machines are regulated and programmed so that they produce various foodstuffs at different levels of the production process (Edmondson, 2006). The last type of production used by the organization is referred to as flow production. It is the basic approach used by most hotels affiliated to this organization. This type involves the flow of processes from one end to the very last. For instance, the raw materials are received and passed through various physical and chemical processes in a continuous flow of activities. In order to reduce the costs involved in production as well as improve on the time take to complete the various production processes, there is need for adjustments on the organizations’ approaches. To begin with, the organization ought to replace the human labor with more machine operated procedures. Using machines instead of man power in the production process would not only make the work easier but also ensure that the production duration is reduced. In addition, using machines reduces the likelihood of defects occurring on the final products which in turn reduces production costs and maximizes the return on investment (Edwards and Edwards, 2007). The second approach that would help on enhancing the processes within the organization would be proper maintenance of current resources. This idea involves the constant servicing of machines and replacement of old ones with new ones. The approach reduces the occurrence of quality issues that would accompany the use of faulty machines in the production process. The third method would involve staff empowerment. The human resource form the basic part of the production process, In addition to servicing the machines, there is an inevitable need for staff empowerment and motivation (Everett, 2004). This can be achieved through training, conferences and exhibitions where the production team gets their skills horned and new ideas put across to them. Furthermore, the organization needs to continuously motivate the workers through stable reward schemes based on performance and achievement of quality standards. Rewarding good performers in the production process would definitely encourage the other members within the team to constructively engage in the various production processes. This in turn enhances the outcome of these process which results in an overall improvement in the organizational performance. Aggregate planning The organization is keen on maintaining a stable market for its products and services. As such, the operations manager through the help of the other portion of the management team careful analyses the market situation, consumer preferences and customer feedbacks in order to deduce the right demand options to purse. The company pursues pricing as a demand option. By carefully regulating the prices of the goods and services offered in the various hotels across the country, the organization has managed a firm client base (Grey, 2013). The second demand option is promotion which is mainly done through online platforms in addition to other approaches. The company uses the media to inform the users of its products and services as well as the adjustments in prices. Promotion is also carried out through discounts on products, free samples and advertisement mainly on television, radio and newspapers. The third demand option currently pursued by the New Mauritius Hotels Ltd is new demand. In this case, the management team analyses the trends in the market and customer response in order to identify the most current demand trends. The products and services are therefore prepared such that they adequately address this new demand (Harper, 2009). The organization uses a number of capacity options in a bid to maintain the right standards in the process. An example involves maintaining a stead output rate through staff empowerment, management of knowledge and dissemination of skills. There also the approach of hiring and laying off of workers which ensures that the organization only has the number needed within the human resource and not a lesser value. The other capacity option involves subcontracting. In this case the hotel management contracts out projects to other developers outside its human resource fraternity. The approach is effective when the project is a temporary process hence no need of permanent employment. The company also uses inventories which does not only enhance accountability but also places the company records in a comprehensible manner (Johnson and Robinson, 2007). These records can in turn be used to identify the areas in need of adjustment hence an eventual improvement in quality. Lastly, the organization maintains a level workforce and uses a combination of decision variables. Despite the hierarchies in the organizational structure, all workers through their team leaders can have their opinions incorporated in the decision making process. This does not only create a level workforce but also improves the quality of the work environment and hence an improvement in performance (Plunkett, 2012). Both demand and capacity options have a special link to a company’s understanding of its market. The demand option pursued by a company has a special way of influencing the nature of reception given to the products or services. At the same time, the capacity options undertaken by the company do not only change situations within the workplace but also influences the output. In order to enhance the organization’s capacity planning, it would be a crucial step to come up with a standard pricing method for both products and services across all the hotels managed by the company. This enhances consistency (Joseph, 2004). In addition the pricing policies ought to be in conformation with the government set standards. Observing this avoids the penalties associated with breach of authorities. The company can also develop and improve their online platforms in order to ensure that it is interactive and user friendly. This would make the process of promotion easier, faster and more effective. In order to maintain a level workforce, the company needs to practice more of knowledge management to aid in the dissemination and transmission of ideas from one employee to another. This improves the general quality of the final production outcomes (Katz, 2003). To improve the organization’s capacity planning, there would be more need to empower the employees through training and incentives. Capacity planning could also be improved by enhancing the infrastructure within the organization and on its environs. Effective communication is a crucial element in a success production system. Through effective tools aided by the incorporation of technology, information can be easily passed to the workers and consumers. Through such interactions, the clients’ feedbacks can be used to note demand trends especially the new demands. The organization can then establish its capacity planning strategies with reference to these feedbacks. Capacity planning could also be improved by enhancing a proper work environment through the provision of the necessary resources and maintenance of good health and safety standards. This strategy plays a key role in enabling the New Mauritius Hotels Ltd. to maintain an output rate which is not only stable but also consistent (Malakooti, 2013). Productivity and Supply Chain Strategy The New Mauritius Hotels Ltd largely depends on the two main types of production ratios used by most organizations in the corporate world. Firstly, the organization sets the total productivity ratio. In this case, the value of all output is related to the value of all input hence the ratio is given by total output over total input. The second type of ratio set by the organization is the partial productivity ratio. In this type, the organization relates the value of the total output with the value of some of the main categories of the input. The ratio is therefore obtained by dividing the total output with the partial input (Medlik, 2003). By deducing the relationship between the value of total inputs and outputs, it can be possible to note the areas in which the company can adjust in a bid to enhance its productivity. Productivity can be improved through variation of the output value. This implies increasing the output value while keeping the input values at lower levels leads to a higher productivity ratio. The output of the workers and the machines can be improved through appropriate working environment (Montgomery, 2012). This strategy may involve human resource motivation as well as maintenance, repair and replacement of old or obsolete machines. In addition, the organization can increase its output value through staff empowerment which may involve approaches such as training and knowledge management. Improvement of infrastructure, incorporation of more IT related tools in operation and use of effective communication methods are other methods the company can use to enhance productivity (Norman, 2013). Due to the dynamic nature of the demand trends and the global economic situation, it has always been the desire of every manager to come up with supply chains strategies that are aimed at reducing the cost of inventory and production. One of the supply chain strategies at the New Mauritius Hotel involve adopting a supply chain plan which is driven by the current demand schedules, insights as well as shaping. In addition, the company management has developed a supply chain which is adaptive to the business environment, consumer needs and the logistics involved in production (Pannerselvam, 2004). This way, the organization ensures that the supply chain used in enhancing operations minimizes on production costs and maximizes the return on investment. The other strategy used by the company involves optimizing the design of the products and services through extensive innovation which in turn increases profitability. The company has also aligned its supply chain with the core organizational goals, a strategy which ensures that all operations adequately aid in the achievement of the business objectives. The appropriateness of a supply chai largely depends on its sustainability and the extent to which it enhances profitability within the organization. The current supply chain used by the organization, despite its effectiveness so far can still be improved for better outcomes. To begin with the company leaders ought to embrace sustainability as a core value in the supply chain strategies. This approach may involve meetings by experts and discussion of methods in which the supply chain could be enhanced to achieve better output. Secondly, the company’s professionals could use the real time and achievable aspects to obtain quick outcomes. This strategy would be helpful in reducing the consumption of energy, less travel and transportation expense and a minimal and controlled use of resources (Pizam, 2010). In addition, the company management can use approaches such as knowledge management, systematic measurement as well as audit reports to ensure continuous improvements on the operation process. Incorporation of best practices, effective use of knowledge in addition to benchmarking are the other approaches which the company’s management can incorporate in order to improve the current supply chain. Lastly, the company managers can device the best strategies for responding to change associated with the ever dynamic market environment. It would therefore be important to come up with flexible supply chain strategies which would easily run in conformation with these changes. Finally, the strategies ought to be such that they support each other. This way the company is likely to incur less cost which mostly comes with complex multi-channel chains. Plant Layout The company’s layout takes the shape of a simple straight line flow. The plan adapts to the building design. The layout begins at the receiving dock where shipments containing raw materials, new machines and related resources are received. The materials are then moved to the operating offices consisting of various sub-assemblies characterized by different processes. The flow then proceeds to support, maintenance and finally through quality inspection before the final products are packaged and branded ready for consumption (Pilcher, 2012). The plant lay out incorporated by the organization involves a single line flow. However, it the strategy is relatively rigid and time consuming since the layout gives room for the production of one product at a time. The layout can therefore be improved to involve more subassemblies. Through this, it can be possible to produce more than one product at the same time which in turn reduces the cost of production and the time taken to complete the process of production (Roger, 2006). The other suggestion would be to improve the building design such that the sub-assemblies are placed near the production offices to reduce the distance of movement. When the distance between amenities within the layout is reduced, the cost of movement and transportation is in turn minimized too. This strategy would be helpful in doing away with the production costs related to transport and flow of processes within the chain. The plant layout can also be improvement through proper spacing which in turn enhances the quality of the working environment. When the working surface is spacious enough, mobility within the organization is equally enhanced. Good spacing reduces congestion and thereby improves the down time. Proper design of amenities has a special way of improving convenience for instance; the components of production are made more accessible. In addition, the plant layout can also be improved by creating a perfect balance between the machine aided operations and the processes involving human effort. The necessary areas in need of adjustment can be identified for instance, the human aided processes can be replaced with more machine oriented approaches to improve the production time and cost. Finally, the New Mauritius Hotel’s plan layout can be improved through the incorporation of IT in enhancing communication and the general infrastructure within the organization. Instead of the cumbersome physical movements between the phase of production, the organization can use computerized systems through which signals are sent and processes controlled from a central source. Conclusion Organizational performance is always pegged on a number of factors which must always be considered and implemented by the management. One of the core requirements for a smooth flow in activities within an organization would be skilled and dedicated human resource. When each member of the work force has a thorough knowledge in their field of operation then the quality of delivery is also likely to be held. In addition, there is need for the availability of the enough resources not only to aid in the production process but also ensure that the work environment is healthy and conducive enough. 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