A Quality Improvement Business Management Strategy: Six Sigma in the Hospitality Industry - Research Paper Example

 How does the implementation of a quality management system such as EFQM or Six Sigma in the hospitality industry helps improve the performance of a location? The concept of quality emerged in the business world along with the evolution of business itself. No business can exist in the market, if it fails to meet the expectations of the customers. The reputation or the brand value of the organization has only secondary importance to the customers whereas quality and price like factors always taken seriously by the customers. All the prominent organizations may have a well defined quality management system in order to ensure the quality of all the products or services offered to the customers by the organization. Earlier, in most of the organizations, a quality control (QC) division was functioning whereas at present instead of QC, Quality Assurance (QA) division is functioning. The change from QC to QA reflects the importance and changing concepts about the quality in organizational world. Service sector is one area in which quality plays a vital role in determining the success and failures of an organization. For example, in hospitality industry, the customers often compare the quality of services they received from different organizations before they select one organization. European Foundation for Quality Management (EFQM) and six sigma (Developed by Motorola Corporation) are the major quality management systems implemented in the hospitality industry at present. Both EFQM and Six Sigma have some merits and demerits. This paper briefly analyses how the implementation of a quality management system such as EFQM or Six Sigma helps the hospitality industry to improve the performance. Six Sigma in Hospitality industry Six Sigma is a quality improvement business management strategy, developed by Motorola, in 1986. [update]It is currently used extensively in different organizations to improve the business management practices. The core of Six Sigma is the identification and elimination of the defects of an organization. Six sigma process expected to produce 99.99966% of the total products manufactured, to be free of defects. “To achieve Six Sigma, a process must not produce more than 3.4 defects/ million opportunities. A Six Sigma defect is defined as anything outside of customer specifications”( What is six sigma, 2010) (Jkerrigan, n. d) The basic architecture of six sigma includes five aspects; define, measure, analyse, improve and control. The organization which implements six sigma should define its objectives at first. Then the organization measures the output with the help of statistical analysis. If the output does not reach the six sigma mark, the process should be improved further and further till it reaches that mark. Proper control should be exercised while the organization strives for better quality and management practices. “Six Sigma is driven by the customer and thus aims to achieve maximum customer satisfaction and minimizing the defects. It targets the customer delight and new innovative ways to exceed the customer expectations” (Advantages and Disadvantages of Six Sigma, n. d).The focus of Six Sigma implementation is attached to the customer. In most of the modern quality management systems customers are at the central point. All the quality improvement activities are rotate around the customer since the customer is the one who is capable of making or breaking an organization. Starwood Hotels and Resorts have already implemented the Six Sigma approach. Six Sigma at Starwood has helped improve the financial performance of the group by ushering in the quality and consistency of the customers' experiences. Six Sigma has also provided the guidelines and tools to create a consistently superior guest experience at all properties, and simultaneously improve the bottom line. The Six Sigma organization in the group reports to divisional leadership and is aligned with the division’s goals and priorities (Six Sigma in the hotel industry, 2005) Customer feedbacks are important for the hotels to improve their service. Customer feedbacks usually obtained through surveys and questionnaires. Based on these feedbacks from the customers, the hotel management implement programs to improve the customer servicing. Hotel groups usually conduct studies yearly to evaluate the effectiveness of various quality policies implemented by them. In 1992, the Ritz-Carlton Hotel Company implemented six sigma and evaluated the performance of each hotel in its group. Toward this goal, each of the group’s hotels elected to champion a one-year research study on one of the critical processes that had been identified as vital to customers’ decision to continue patronage at their 30 properties worldwide. The Ritz-Carlton Dearborn in Michigan took on the process for “a clean, fresh, fully stocked guest room,” a process that could deliver better, faster, and cheaper housekeeping services within greater reliability (QFD and Six Sigma in Service Application, 2010) Even though six sigma provides many advantages to organizations, there are many disadvantages also. Applicability of six sigma in service organizations is difficult. It kills the creativity of an organization. The tight management frameworks, in which the employees forced to work in six sigma organizations, prevent them from using their own creative ideas in their work. The organization provides them the instructions and they should work like machines based on such instructions. In short, “Six Sigma gives emphasis on the rigidity of the process which basically contradicts the innovation and kills the creativity” (Advantages and Disadvantages of Six Sigma, n. d) It is difficult to achieve the target 3.4 defects or failures per million opportunities in service sector. In manufacturing units, most of the jobs were performed by the machines and it is possible to achieve the objectives six sigma. On the other hand in service sectors, instead of machines, most of the jobs were done by the humans. It may take too much time for service organizations to reach the targets fixed by the six sigma quality management systems. For example, Motorola is engaged in manufacturing microprocessor chips and most of the operations are performed by machines. On the other hand, in hotel industry, customer servicing is the vital function and it can be performed by the customer service executives alone. In short, the possibility of error is more in human activities than in the activities of machines and hence it is difficult to implement six sigma successfully, in service organizations. “Six Sigma implementation constantly require skilled man force. Thus control and employee dedication are hard to accomplish if it’s not implemented regularly”(Advantages and Disadvantages of Six Sigma, n. d). It is difficult for human to improve his performance beyond certain levels whereas machines can improve its performance all the time because of the introduction of new technologies. For example, current computers and mobile phones are thousands of times better than the computers and mobile phones a couple of decades before. This is because of the constant improvement taking place in science and technology. On the other hand, it is difficult for the current generation to perform like the older generation as far as the physical effort is concerned. Older generation had fewer facilities and they forced to work hard physically to improve their living standards. The better living standards made the current generation lazier and it is difficult for the current generation to match with the older generation. In short, machines always improve its efficiency whereas same thing cannot be said about manpower. Service sector is dominated by manpower rather than machines and it is difficult to achieve the objectives of six sigma from service sector, just like the manufacturing sector. EFQM in Hospitality industry “The EFQM Excellence Model is being implemented by over 30 000 organizations in the world. It is a non-prescriptive assessment framework that can be used to gain a holistic overview of any organization regardless of size, sector or maturity” (The EFQM Excellence Model, n. d). The EFQM helps the management process in general and the leaders and the employees in particular. It helps the management process to improve the strategy, operations, implementing change etc. Leaders use it for identifying their roles, making strategies and developing sustainable business practices whereas employees use it for contributing to the progress of the organization and to recognize the impact of their actions. The following figure illustrate the various aspects of EFQM. (EFQM Excellence Model, 2008) EFQM can be used a tool for self evaluation. Both the employer and the employee in service sector can evaluate their performances properly and rectify their mistakes using EFQM strategies. Customer focus is one of the major elements of EFQM. According to the modern business principles, customers are the most important stakeholder for an organization. In hospitality industry also customers are getting big recognitions. EFQM provides a benchmark to the employees and the employers with respect to the performances of other organizations in customer servicing. It also helps to identify the areas of improvements for an organization. “The concept of People Development and Involvement was one of the key features of the EFQM”(EFQM shares what works, n. d. p.1). The performances of the employees play a vital role in customer servicing in hospitality industry. If the employees in a hotel behave improperly to customers, customers will never return to the same hotel again. On the other hand, if the employees behave properly or service the customers properly, the customers will be tempted to visit the hotel again and again. EFQM helps the hospitality industry employees in improving their productivity. Thus the competitive power of the organizations will be improved with the introduction of EFQM. EFQM also helps the organizations in hospitality industry to improve their profitability and reduce their staff turnover. EFQM recognizes the outstanding performances of the employees and complement them with rewards and higher career prospects. The employees who get proper recognition from the employer will never think of leaving the organization. Moreover, their loyalty towards the organization will be increased one they get proper recognition from the organization. If not implemented properly, EFQM model can cause troubles also. Senior management should demonstrate strong commitments towards the implementation of EFQM excellence model. Lip services will never help the organizations in achieving long term benefits. Proper training should be given to the employees for developing new skills and their communication abilities. A potential drawback from using a tailored version of the EFQM Model is that it may no longer be possible to make comparisons with other users so effectively. A bigger problem, though, is to try to create a personalized Model right at the start (Medhurst & Richards, n. d. p.5) It is difficult to implement a standardized EFQM model in all service sector organizations. Based on the nature of the organization and the services provided, custom made EFQM model is used for each organization to reap the maximum profit out of it. For example, in hotel industry, there are four star, five star and seven star hotels. It is difficult for a four star hotel to provide the same services of a seven star hotel. The four star hotel management should make certain changes or customizations in the standard EFQM model, in order to make it suitable to its requirements. Conclusions Implementation of quality management systems like EFQM and six sigma can definitely help the service organizations like the hotel groups to improve their performances. It helps both the managers and the employees immensely in delivering better performances and improving the productivity of the organization in different ways. It also assists the organizations in evaluating the current trends in the market and to fine tune their management strategies based on that. At the same time these quality management systems have certain drawbacks also, especially in service industry. Applicability of quality management systems in service industry is difficult because of the increased role of human element in service sectors compared to the manufacturing sector. In service sectors, customers are the important stakeholder and it is difficult to meet their needs with the help of machines alone. Standardization of quality management programs in different service sector organizations is also difficult. References 1. Advantages and Disadvantages of Six Sigma, (n. d). Retrieved from http://www.sixsigma.in/advantages-and-disadvantages-of-six-sigma.html 2. EFQM shares what works, (n. d.), Retrieved from http://www.efqm.org/en/PdfResources/Failte%20Ireland.pdf 3. EFQM Excellence Model, (2008) Retrieved from http://www.bita-center.com/efqm 4. Jkerrigan (n. d), Royalty-Free (RF) Clipart Illustration of Colorful Circling Control, Define, Measure, Analyze And Improve Arrows, Six Sigma Business Strategy Retrieved from http://www.clipartof.com/details/clipart/82702.html 5. Medhurst D & Richards D, (n. d.). HOW MANY REASONS FOR NOT USING THE EFQM EXCELLENCE MODEL ARE JUST EXCUSES? Retrieved from http://www.ddexcellence.com/Downloads/Reasons.pdf 6. QFD and Six Sigma in Service Application, (2010). Retrieved from http://www.qfdi.org/who_is_qfdi/newsletter_archive/qfd_and_six_sigma_in_service.htm 7. Six Sigma in the hotel industry, (2005). Retrieved from http://www.sixsigmablog.org/2005/12/six_sigma_in_th.html 8. The EFQM Excellence Model, (n. d). Retrieved from http://www.efqm.org/en/tabid/132/default.aspx 9. What is six sigma, (2010). Retrieved from http://www.isixsigma.com/index.php?option=com_k2&view=item&id=1463:what-is-six-sigma?&Itemid=155 Read More