Operation Management of Hilton Hotel - Case Study Example

OPERATION MANAGEMENT OF HILTON HOTEL and Table of Contents Executive Summery 3 Introduction 4 Information and Analysis 5 Current Operations 5 Operational Management Activities 6 Capacity Planning 6 Manpower Planning, acquisition, and control 6 Scheduling 8 Managing for quality 9 Material Control 10 Cost Control 11 Training and development for employees 11 Facility location and layout planning 12 Conclusion 13 Recommendations 13 Bibliography 15 Appendices 17 Executive Summery Hilton Hotel located in London represents one of the biggest names in the hospitality and service industry in the United Kingdom and the world. This hotel is a franchise of the Hilton Hotels Corporation, which is one of the leading leisure and hotel companies in the world. This company started with a humble beginning in the year 1919, when Conrad Hilton bought the first of what would be an international chain of hotels and resorts. Hilton Hotel is well known for its effective and stylish services to its customers. This organizational establishment has been able to make a name for itself and has left a legacy of giving the best services and investing in innovation that aim at satisfying customers. They also offer affordable prices for its customers. Hilton Hotels and Resorts are well spread in countries all over the world in countries including the United Kingdom, Italy, the United States of America, China, and South Africa. This proves that Hilton hotel is a major service provider which allows customers to be loyal within and outside the country. Services provided by Hilton hotels include meeting rooms, business centers, rental, video conferencing, luggage storage, and lounge among other convenience and comfort services. The aim of Hilton hotel is to offer the best service to its customers that will lead to a long term loyalty to the brand. It is all about offering unique experiences that differentiate them with their competitors. However, in order to offer this experience, Hilton hotel needs to look at its operational activities. This paper looks at operation management of this company and looks at challenges it faces in every operational activity. Finally, the paper looks at ways that can help the organization to overcome the problems. Introduction The UK hotel industry has been growing rapidly over the past several years. This industry is based on two fundamental elements that include consumer and corporate. Operational management is a key factor in the success of any hotel. Operational management helps the management to careful manage processes to production and to the distribution of goods and services (MAHADEVAN, 2010). Activities related to operational management (OM) include quality control, purchases, inventory control, logistics, the evaluation process, and storage (GALLOWAY, 1996). Operational management is crucial in the service industry because this determines the quality of service provided. The performance of the service industry is in turn dependent on the quality of service provided to customers. High quality service attracts more customers to the company which in turn improves the performance of the company. This is the reason why it is crucial for any manager to understand this concept. Information and Analysis Current Operations Below is summary of operations undertaken by Hilton Hotel Operational Management Activities Capacity Planning Capacity is the maximum rate at which a transformation system processes inputs. Capacity planning is the process of determining the capacity level is needed and when. Capacity planning is important in helping organization predict future resource shortages and training people in advance. This also helps the organization get the right number of staff as demanded by the company. Hilton plans by looking at the activities involved in the company and comparing this with the number of employees it has currently. This planning helps the company to have enough manpower during peak and off-peak seasons. However, doing this calculation can be a challenge. There is need for management and other employees to determine how much work in terms of hours worked each employee need to work. This will help calculate how many employees will be required to work in a day at a particular department. By looking at the current staff members and the number of staff members needed, the company can be able to make any adjustments needed. Manpower planning, acquisition, and control Manpower planning involves projecting the number of personnel who have different skills that are required over time. This is deciding the number and type of human resources required for each job in order to do organizational activities. This can be viewed as forecasting the human resource requirements and the future supply in human resources, then making any adjustment needed (SHILLING, 2013). Manpower acquisition is getting the right mix of people to do the various organizational activities. This is mainly through the recruitment process. Manpower control is managing manpower in a way that manpower is used in an economical and efficient manner. Controlling and maintain employees in the hotel industry are crucial to the performance of a hotel. This is because there is a high cost in replacing and training new employees when there is a high turnover (ARTHUR, 2004). The hotel, leisure and catering industry usually have high turnover mainly because these are one of the lowest paying sectors as compared to other industries. People who are more qualified skip their current job and try to get better paying jobs in other industries. The Hilton hotel recruitment process starts by identifying a vacancy that needs to be filled up. After this has been identified, the position is advertised on its website where applicants submit their applications online. Once selected, successful applicants go for an interview and get selected upon succeeding in their interviews. Once the hotel has acquired new employees, it takes them through a training process to make sure that they know the processes involved in the organization and to maintain the quality of services it provides to its guests. Hilton Hotel acknowledges the importance of the proper recruitment process that will make sure that it gets the right people for the right position. Manpower control is mainly by finding strategies to maintain its employees in a competitive market. Hilton hotel faces this problem mainly because it is well located in central London where there are hotels around. These hotels may be great competition where they offer qualified employees better pay rate if they work for their companies. To be able to overcome this, there is need to make sure that employees are satisfied. This should be by comparing the monetary compensation of the hotel and other hotels, then by setting the compensation to be competitive when compared to other hotels. According to Abraham Manslows Hierarchy of Needs Theory, people are motivated by the needs which have not been satisfied. While all people are motivated through financial regards, the management needs to understand individual active needs of employees. Hotel managers need to understand that the total reward packages are more than money. Being in a service industry, employees interact frequently with customers who have different personalities. Employees may have stress from dealing with customers or may face unnecessary problems created from the working conditions. To overcome this, there needs to be communication between employees and management in order to avoid unnecessary issues that will lead to a high turnover. Scheduling Work scheduling involves formulating a time frame for employees’ work during a certain course of time. There are different types of scheduling which include fixed schedules that exist when employees are required by the organization to work the same number of hours every day on a continuous basis (HOLLEY, 2009). The second type of scheduling is the nonfixed schedule that occurs when factors determine when and how an employee performs her work. There is also a rotating work schedule that exists when there is a fixed schedule that is then followed by time-off after a certain period. Finally, there is a flexible schedule when the working hours vary on a daily, weekly, or monthly basis (NYMAN, 2001). While considering the work schedules, employees today need to make sure that they keep a balance between work and personal lives of their employees. Hilton hotel has a flexible schedule because employees are even given the option of working at home under the program called Hilton@Home. This helps attract talented people in the customer and reservations positions who prefer to work from home (HotelNewsNow, 2008). This flexibility helps employees to balance between their work and personal life. The main problem with this activity is monitoring the employees’ performance. These people interact with customers constantly as they do their reservation and need get some information. The way employees interact with customers determines if they will want services from the hotel. Managing for Quality Quality in the hospitality and tourism industry is crucial. This involves consistently delivering services and products to guests according to the standards expected. Delivery of quality standards is one of the most difficult things to do in the hotel industry. Managers need to prioritize on improving the quality of processes in their hotels. Improvement of quality can be done through regular training and empowerment of staff members that are service-oriented, trying to exceed the expectation of the guests, and through continuously improving products and services (KING, 2006). In this industry, stakeholders perceive quality service as value for their money, friendly staff, tasty food, and comfortable rooms. The future of any hotel depends on guests’ satisfaction, guest retention, and advertising through the word of mouth which in most cases is through referrals by guests. Hilton Hotel manages the quality of its services by making sure that its employees perform well in their various departments. The process of performance appraisal helps employees learn more about their position at the hotel. This also helps them locate areas where they need to make improvements. However, like any other hotel, Hilton hotel faces a challenge in maintaining the quality expected by guests. There is normally a gap between what customers expect and what the management perceives is expected from customers. This is mainly because of the management’s lack of full understanding of how customers formulate their expectations based on various sources like past experience with the hotel, advertisements, the hotel’s competitors, experiences from other people, and personal needs. To be able to overcome this problem, Hilton needs to formulate strategies that would help it close up the gap. This may include encouraging communication between management and customers, and improving on its market research. There is also problem in making sure that the delivery of services meets the expectations of the management. This is mainly caused by lack of teamwork, lack of employee performance feedback, and inadequate training of employees. To overcome this, management needs to commit to service quality by formulating ways that will improve service delivery (FORD, 2012). An effective performance appraisal process in the hotel will help the management identify training needs to improve service delivery. This will also provide feedback to employees in areas where they need to improve on. The management team also needs to encourage teamwork because employees have skills in different areas. However, when they put these skills together, the hotel can be assured of good performance of its employees. Material control Material control is a function that makes sure that there are sufficient goods in stock to meet the requirements of an organization without carrying unnecessary large stock. The main aim of material control is to make sure that no particular activity is interrupted because of lack of material. In the hospitality industry, inventory management involves tracking food and beverage consumption, and also involves tracking rooms. Hilton hotel Uses the Just-in-Time (JIT) method because it’s crucial for food to be fresh at all times in order to maintain the high quality of the organization. However, the main challenge of this method is that it increases the risk of delay because of delay in the acquisition and delivery time yet there is no stock for emergency. To be able to overcome this problem, there is the need to always forecast the demand per period to improve planning with suppliers. Cost Control Cost control is the process of controlling costs that are associated with processes, companies, and activities. In the hotel industry, costs are mainly high because of the costs of food. There is always the risk of the costs of food going up or down because of negligence by employees. Hilton hotel controls costs by buying supplies in bulk so that they can enjoy savings from discounts given to suppliers. This strategy helps the company reduce its costs of operations. However, one problem in controlling costs is still seen in cost of food. There is normally wastage of food by employees where they prepare more that what is demanded per day. To be able to overcome this, employees need to constantly look at the books of records containing the number of guests available per day. This will help employees estimate the amount of food to prepare and avoid too much spoilage. There is also need to forecast periods where the number of guest visits the hotel in high numbers or low numbers to also incorporate non-residing customers who visit the hotel. Training and Development for Employees Employee training and development is crucial in the ongoing success of every organization. This process gives employees the chance to develop their skills and competencies that will in turn help performance well especially when there is change in technology within the company. The hospitality industry is very competitive market that faces rapid changes. Employees also have constant interaction with customers who can determine the success or failure of an organization. Employers who train their employees reap benefits of improves quality of products and services, customer satisfaction, and an improvement of productivity. Training should not only focus on the new employees but should also consider old employees in order to keep their skills up to date. Hilton hotel recognises how crucial it is to train its employees. The hotel has departmental supervisor who is responsible for staff training because they are well aware of the training needs (WALKER, 2010). From the kitchen department, employees are trained in First Aid, save energy, and recycling. However, there are some challenges in training where employees complain that training take too much of the time that they would have used to do their tasks. This is because employees can take the whole day in the training room while their work piles up. To overcome these challenges, it is crucial for management to do proper planning so that employees are able to balance time allocated to work and training. Facility Location and Layout Planning Facility location refers to the place where an organization does its businesses. The location is crucial in the success of an organization. A good location is where customers are able to access the facility with ease. In the hotel industry, a good location can also be described as those which are surrounded by attractive sceneries that will make tourist re-visit the hotel. Hilton London Hotel is located in the city where guests can access it with ease. Like other Hilton hotels, it is designed in a modern and contemporary style and has a bar, restaurant, and over 200 rooms. Layout planning involves how the particular facility has been designed. In the hotel industry, there is a great demand of rooms because of many people travelling. It is for this reason that hotels offer different types of rooms to cater for the needs of customers. Hilton hotel offers a wide variety of experience for its guests that include conference rooms, all-suit hotels, destination resorts among other choices. Hilton hotel experiences very high competition from other hotels because of where it is located. In this case, other hotels are also attracted with the demand from tourists on business and vacation travel. High competition can affect the performance negatively because customers may opt to go to other hotels. To be able to overcome this, the management needs to put effort in making sure that its quality in service delivery is high. Efforts can be through staff training that will make sure that employees perform well. Efforts can also be done in constantly researching on the expectations of customers in service delivery. Quality services will make sure that customers will be satisfied with the services provided and will remain loyal. Conclusion In general, Hilton hotel needs to focus on its operational activities in order to perform well because they are directly linked to the quality of services provided which in turn affects the performance. This company is able to perform well in the market by taking advantage of its strength and opportunities. For example, being a brand, Hilton hotel needs to take the advantage to attract many consumers. Being in a busy location where there are many tourists, Hilton hotel can take advantage of this opportunity by providing high quality so that this becomes the most preferred hotel. Recommendations In order to improve service delivery at Hilton hotel, below is a summary of recommendations. 1. Management needs to make sure that employees in monitory form or otherwise so that employees are encouraged to stay in the company. This will reduce the rate of turnover. 2. In Hilton hotel, most workers interact directly with guests. To make sure that the company does not lose customers, there is the need for employees to be monitored and trained on a continuous basis on how to deal with employees. 3. Communication is key in this industry and thus should be encouraged by management so that they care able identify and solve issues that may affect the performance of employees. 4. A system of inventory management needs to be developed to avoid delays that may be caused by lack of stock due to spoilage or because of peak seasons. Bibliography ARTHUR, D., 2004. Fundamentals of Human Resources Management. 4th ed. s.l.:AMACOM Div American Mgmt Assn. FORD, R. Et. Al., 2012. Managing quality service in hospitality: how organizations achieve excellence in the guest experience. Clifton Park, N.Y.: Delmar, Cengage Learning. GALLOWAY, R., 1996. Operations management: the basics. London: International Thomson Business Press. HOLLEY, W. Et. Al., 2009. The labor relations process. Mason, Ohio: South-Western Cengage Learning. HotelNewsNow, 2008. Hilton launches work-at-home program. [Online] Available at: http://www.hotelnewsnow.com/Article/38/Hilton-launches-work-at-home-program [Accessed 10 01 2014]. KING, J. H. &. CICHY. R., 2006. Managing for quality in the hospitality industry. Upper Saddle River, N.J: Pearson Prentice Hall. MAHADEVAN, B., 2010. Operations management: theory and practice. Upper Saddle River: Pearson. NYMAN, D. &. LEVITT. J., 2001. Maintenance planning, scheduling, and coordination. New York: Industrial Press. SHILLING, D., 2013. Complete guide to human resources & the law 2014. s.l.:Wolters Kluwer. WALKER, J. R. &. MILLER. J. E., 2010. Supervision in the hospitality industry: leading human resource. s.l.:Hoboken, N.J., J. Wiley. Appendices JIT- Just in Time OM – Operational Management TECH - Technology Read More