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MM 5004 Operations Management

Dermawan Wibisino, Phd Six Sigma Analyses in Hospitality Industry: In Room Dining Meal Experience in Hotel Industry

Prepared by: 29111311 Haidir Afesina

Executive 46 MASTER OF BUSINESS ADMINISTRATION 2012

EXECUTIVE SUMMARY This report is talking about Six Sigma analyses at Hospitality Industry especially dining in hotel`s restaurant. The place that will be taken as a case is Hilton Hotel Bandung. As one of the leading hotel industry with around 1500 employees, it has become a magnet in Bandung`s five star hotel category with their facilities to both of employee and customer. Also it is because the only one Hilton franchise in Indonesia. Moreover their all day dining restaurant, with buffet concept has become a baby booming for their first one year. It followed by famous authentic Italian restaurant and the bar that famous with their signature drink. In room dining or room service offer a variety foods and drinks from all food and beverage outlets. So that guest would be able to have their favorites while resting. However, this section got the lowest satisfaction score compare with others at Food and Beverage department. Therefore this report is tried to analyze the problem that meet at the room service using six-sigma formula to solve it i.e. DMAIC. The survey being used is taken from SALT and TMOS. These are Hilton Hotels survey tools. Both of theory from sixsigma quality and food and beverage service management are being used in order to create the effectiveness solution as a recommendation.

TABLE OF CONTENTS EXECUTIVE SUMMARY ...................................................................................... TABLE OF CONTENTS......................................................................................... I. INTRODUCTION ............................................................................................ 1.1 Background .................................................................................................. 1.2 Aim and Objectives ...................................................................................... II. FINDINGS ........................................................................................................ 2.1 Hilton Hotel .................................................................................................. 2.2 Pre Analysis Business Indicator ................................................................... 2.2.1 SALT ................................................................................................... 2.2.2 TMOS .................................................................................................. 2.3 Six Sigma ..................................................................................................... 2.3.1 DMAIC ............................................................................................... III. RECOMMENDATION .................................................................................... REFERENCES ......................................................................................................... 1 2 3 3 3 4 4 4 5 6 3 5 7 10

I. INTRODUCTION 1.1 Background The concept of the meal experience is central to the development of dining in hotel industry (Wood, 2003). Whenever dining out, the customer`s concern and their experiences are leading to three aspects. They are choices, menus and dining environment. Then service quality is the factor that supports those areas. Therefore having customer insight is a valuable thing for any food industry. Thus it is becoming a challenge for both of marketing and operation at the industry. In western world, it is a common and culture for people or family dines in their favourite restaurant at hotel especially on weekend. In contrast, people in Asia prefer to have it in a real restaurant not hotel`s restaurant. It seems that a barrier or gap between hotel and restaurant is happening. Most of the image and perception of people to hotel`s food in Asia is high price low quality. Then room service or in room dining is one of specialization that most of Asian people not use to. In fact that having in room dining will be expensive than have it at restaurant. Regardless of the price, it offers a personalized service i.e. food being served at the room. Thus the satisfaction level should be high. Therefore this report is focusing on in room dining meal experience in Bandung`s hotel with Hilton using Six Sigma methodology. Meal experience is the perception of their experience after having food. As one of the leader at the hotel, the author tried to implement the six-sigma formula by getting feedback from both of employee and customer. Six-sigma is believed to explore the hidden factors of the defects. Not only is the tangible aspect but also is the intangible aspect. Defects is simply any component that does not fall within the customer`s specification limits (Jacobs and Chase, 2011) 1.2 Objective The aim of this report is using Six Sigma to analyze the problem facing by Hilton Hotel. The objectives are; To define the problem in room dining meal experience To achieve the bench

II. FINDINGS 2.1 Hilton Hotel Conrad in the United States of America founded Hilton hotel in 1919. The hotel chain rapidly expanded across the United States during the first half of the century and in 1949, Hilton opened the first international hotel outside America. In 1964 Hilton International (HI) and Hilton Hotels Corporation (HHC) decided to spin it off as separate publicly owned. HHC took exclusive rights to the Hilton Brand in the USA, while HI had the same rights in the rest of the world. The only link between the two was Hilton Reservation Worldwide, an organization owned jointly. In January 1997, a historic marketing alliance brought Hilton International (HI) and Hilton Hotels Corporation (HHC) become one since global brand identity for the first time in 30 years. The two companies operate more than 450 Hilton hotels. Hilton Bandung first operated in March 21st, 2010. It is the only one Hilton franchise in Indonesia. It has 186 rooms and up till now the city`s largest and most luxurious guest rooms starting at 45 square meters. Located at Pasir Kaliki Street, Hilton Bandung is nearby to the Bandung`s big mall such as Istana Plaza and Bandung Indah Plaza. In addition, it has 7 meeting rooms and 3 ballrooms. The grand ballroom it self is able to accommodate 1500 people seating capacity with classroom style. The other facilities such as gym, business centre, pool and spa are equipped with new modern style. Therefore it categorized as business hotel. The overall experience is trying to be deliver according to its motto i.e. travel should take you places. Means that whenever we go from one place to another place, it should be the same with your home. Therefor in order to deliver the exceptional services, its mission is we will provide our Guests and Colleagues with memorable Hilton Moments through our sincere, cheerful and creative service delivery. Hilton Bandung has three food and beverage outlets and one special service i.e in room dining or room service. They are Purnawarman, Magma and Fresco. Below is the table of Hilton Bandung`s outlet.

Table 2.1 Hilton Bandung Food and Beverage Outlet

Outlet Purnawarman

Product Buffet Western and Asia (Sushi, Dim sum, Noodle) Authentic Italian Cocktail and Vintages Wine Breakfast menu, Lunch & dinner (restaurant menu), Supper (Chef specialty 11pm-6am)

Opening Hours Breakfast 6am-10am, Lunch 113pm, Dinner 6pm-10pm Lunch 12-3pm, Dinner 6pm10pm 6pm-12pm 24 hours

Fresco Magma Bar Room Service

2.2 Business Indicator Analysis In room dining or room service is a special service that provided to all in house guests. The guests are able to order food and beverage at any time without hassle. The process is very easy and simple. Just press 0 and it will be connected to operator called Magic (Managing All Incoming Guest Call). Magic is able to deliver all guest needs such as laundry, housekeeping, food and beverage. Therefore at any Hilton Hotels, there is only one number to call whenever in house guest need anything from their room i.e. 0 or Zero. Thus it becomes the differentiation and unique selling point compare with any other hotel.
Figure 2.1 Room Service SWOT analyses

Magic is the one who responsibility to all guest enquiries. In this case, whenever guest would like to order anything related to food and beverage to their room, Magic will delivered all the requests to room service. So that as order taker, the position of it is very central. However, it is the job of room service to execute the order within 15 minutes as the Hilton standard. Also the personalized services when the room service team member inside the room is ensure to be done i.e. engagement. During weekend, the complaint to room service is high. Therefore the food and beverage department has to think how to minimize the complaint and increase the satisfaction level, especially on weekend. There are two kinds of survey to find out the problem. It is SALT for customer or external and TMOS for team member or internal. In this report, the author as one of the leader is not allow describing each question on the survey, the calculation and also the exactly number, as it is based on antitrust policy that has been signed on the employment contract. Even though the author has an access to get the real data. However it is only the exactly number will be adjusted without changing the weight and the order of each points in every categories. 2.2.1 SALT The abbreviation of SALT is Satisfaction and Loyalty Tracking. It is the process of sending guest an email survey to find out the satisfaction of the guest during their stay. A third party company called Medallia. It is the one who managing the questioner. Thus it can guarantee the neutral and clean process in order to rank the best Hilton hotels around the world. In addition, Hilton has a standard or the minimum benchmark score to each department at every Hilton Hotels. Then the requirement of the survey is count 9`s or 10`s as passing scores. Therefore any survey that is returned with an 8 or below is considered failing or a Zero in that area. Every operation department or front of the house is being asked on that survey. They are Front Office (reservation, reception and concierge), Housekeeping (room and laundry), Leisure (gym, spa and pool), Security and Parking, and Food and Beverage (restaurants, banquet, bar and room service). The result will be send to all leaders at

every Hiltons to find out how good their position in the region. Moreover, the best one will get a bonus from the Hilton corporate. The survey at Food and Beverage consist of quality of food, varieties of food, level of service (friendliness of staff and speed of service, level of satisfaction) and ambience. As quality and variety of food is belong to Kitchen department, so that the focus is only on service that belong to Service department. Below is the monthly SALT score at Room Service on December 2011. The higher is the better i.e. 10.
Figure 2.2. Room Service SALT Score

December2011

The survey results from guest who filled the form December 1st to December 25th indicates that level of satisfaction are very low on their meal experience. Total respondent are 49. 2.2.2 TMOS TMOS is Team Member Opinion Survey. TMOS is conducted annually in every Hilton hotel to measure the level of employees satisfaction. This survey covers most of the areas that can contribute towards creating an environment, which leads towards their benefit. Thus the survey is conducted in a highly confidential manner and a third party does the tabulation of results as well. The questions consist of facilities, training, performance management and customer service. It is an annual survey.

Figure 2.4. Room Service TMOS Survey Rank

The survey above was taken from December 1st -20 December 2011. The total respondents are 7. They are room service team member. It indicates that the team is lack of training. 2.3 Six Sigma Haizer and Render (2006) defined Six-Sigma as a program designed to reduce defects to help lower costs, save time and improve customer satisfaction. Each activity in a company represent an opportunity for defects to occur and six isgma program seek to reduce the variation in the processes that led to those defects (Jacobs and Chase, 2011). In addition, Jacobs, Chase and Aquilano (2009) said that to achieve sustaining business success, six-sigma is a comprehensive system consists of strategy, a discipline and set of tools. Implementing six-sigma is a big commitment. Not only because its a long term project but also related to the strategic decision of a company. Therefore Shim, Siegel, and Shim (2011) said that management directed, team based and expert lead approach are needed in this system. The methodology to six sigma projects is the DMAIC i.e. Define Measure Analyse Improve Control. 2.3.1 DMAIC Define It is tool to identify the customer and their needs. Thus we are able to see the critical point that become a problem that lead to the most impact on quality (Jacobs and Chase, 2011). Below is the SIPOC flow chart for room service process. It is a simplified version from the sop of service.

Figure 2.5. SIPOC

SIPOCServiceatRoomservice
Supplier Input Process Output Customer

Restaurant Bar

Food, beverage, cutleries

Food delivery

Billbeing signed

Guest

Confirming order

Setup trolley& cutleries

Presentthe food

Checkguest satisfactionandoffer anyassistance

Fond farewell

Figure 2.6. Handling Complaint Flow chart Guest complaint


Clarify Explain

Apologize

Listen

Glitch Report Yes

Compli mentar y

Manager onDuty

No

GM FollowUp

Glitch report is a report that documented any complaint. It is become an archive for the improvement. The most problem happening during handling complaint is that many guest want to talk straight away to GM instead of MOD (manager on duty). In December, the total room service deliveries were 67 (figure 2.7). Then the average for the last four months is 45 room service orders. Figure 2.8 show the average minutes late is 19 minutes. However, the maximum of Hilton standard time is 15 minutes up to the room.

Figure 2.7 Room Service Orders

Figure 2.8 Room Service Timeliness Average

Measure It is the tools to measure the process and the performance. Pareto charts will be use to organize problems or defects in order to help focus on problem solving efforts. The concept of pareto is 80/20. So that 80% of problems are results of only 20% of the causes (Heizer and Render, 2006). Below is the pareto chart of room service complaint on December 2011.

Figure 2.9 Pareto charts of Room Service Complaint

There were 55 complaints during the month of December 2011. The 80% mark on pareto charts above indicate that both of timeliness and product knowledge on the 80% portion. However, product knowledge is the first and the most important cause that result to guest complaint. Therefore the majority of complaints will be eliminated when this one cause is corrected. Analyse The tool determines the most like causes of problems. It helps to find out why problems or defects are generated by identifying the key variables that most likely to create process variation (Jacobs and Chase, 2011). Cause and effect diagrams or called fishbone diagram will show hypothesized relationship between the potential causes and the problem under study. There will be four M`s causes categories: material, machine, manpower and methods. They provide a checklist for initial analysis. Below is the fish bone diagram

Figure. 2.10 Fish bone diagram of Timeliness of Room Service on Weekend


Machine WarmerCartunplugged Poor Scheduling Liftisbusy PoorBriefing PoorPreparation Lackofcoordination Analyze Unabletohandleorders HighOccupancy Lotsof order Weekend/Hig hturnover NewStaff/ Parttime Lackof Experience Weekend/High turnover PoorPreparation PoorTraining Foodisrunningout Noteamwork People LackofStaff Lackofexperience Low Pay Highturnover Workloads Lowskill PoorTraining

Poortraining

Longhours

Timelin eson weeken d

PoorSetup NewMenu

Poortraining Methods

Materials

From the above fish bone diagram, it can be concluded that most of the problem from Methods, Materials, People and Machine is poor training and poor mise en place or preparation. Training is a must in any of activities. It is the one that contribute to the performance of the team and the person itself. Then, in hotel industry, mise en place or preparation to both of service and production (kitchen) is the most important aspects; it cannot be wrong or missing something. It will be effect to the operation.

Improve This phase is to remove the causes of defects. It results to modifying or redesigning the existing procedure for a better result based on standard. Based on the analysis from fishbone diagram supported with TMOS Hilton`s internal survey result, the first priority to improve is training. Therefore the author creates a training plan and procedure based on training need analysis along with feedback from the team. Hilton online internal training website (OnQ) as a source for the team member development, is not really work in the service department especially room service. From the interview survey, all of team member (7 people) agreed that they rarely have a proper training for the whole team because of the busy operation. In addition, the internal website has not been socialize within the team itself. Therefore there are two points in order to deliver the training to the room service team. First is Hilton training SOP in a class (weekly) and one on one (daily) along with the socialization of OnQ to the team. The team has to complete all necessary training and will be audited. Second, the team leader gathers the data of individual training needs and wants. It is very good for their own development along with their capability to give a good performance at work (Wibisino, 2011). This it is believed by survey that it improves team member`s morale as their confidence will be high on their routines. (Wood, 2003).
Figure 2.11 Opportunity flow diagram 1
Training R.S.Team Member

ONQTest

Yes

Ableto work

No No

Evaluatio n&Audit

Yes Certified Personalized training

Then the communication between magic (operator) and service (service) has to be improved, especially to kitchen that provide and prepare the food. The product knowledge has to be shared within the team accordingly. Also every new menu from the kitchen, it will be tested to all team at room service and magic. So that every team member will find out the taste, the appearance and also is the standard to be followed. In addition, the menu substitution has to be communicated effectively.
Figure 2.12 Opportunity Flow Diagram 2

Guest

Magic

Identify availabilit y

Yes

Room Service

No

No

Confirmin gto Kitchen

Yes

Report task

Deliveredto theroom

FoodReady

The room service has to be proactive check every hour to the kitchen regarding their menu availability. Then when the food is not available, room service contact the guest to explain, this is also the chance for upselling and giving recommendation. Control This is the phase to control the new process to make sure performance levels are maintained. As a international franchise hotel, the benchmark in every section is becoming the control system. Then the audit of monitoring and controlling the progress of the performance are the tools. Therefore, every two weeks the management create a meeting called customer meeting and service leader event. These two meeting is talking about the position of SALT at every department. Then the action plan along with the progress of the team will be shared and get the

feedback from the audience. Here is the place that everybody ideas are a gold. Thus, Hilton Corporate create a rewards for every Hilton Hotels and each department that showing the significant improvement. Hilton Bandung is also doing Kaizen for small case, such as inventory system and organizing working area. Therefore the management together with Human Resources are doing the site inspection on weekly basis. Not only that but also to ensure the improvement of the speed is increasing, the mystery guest is being applied. The mystery guest is ordering the food from the room and check how the SOP is being applied. The report is being shared every two weeks. Lastly, to have a real control, the management has provided a phone escalation for the room service team and also magic together with all of director accordingly. So that once the delivery is late, it will alert automatically to every leader through sms every minutes. Magic as an operator will start count time when the order is confirm to be made.
Figure 2.13 Speed Control
Ordertobe made Magicstartthe15 minutescounting ReceivedbyF&B Leader

Magic

Deliveredtoleader &director

No
15minutes

Apologize Guest

Yes JobDonetobe sent

III. RECOMMENDATION In this case, the speed of delivery is really important in order to give a good meal experience. Therefore to ensure that team is able to perform based on standard, the training should be done regularly. Ensure that all the team has the same level of product knowledge. Also being proactive to inform any unavailable item to both of kitchen and magic (operator). The performance of the hotel is shown by the result of satisfaction level from the guest. Ensure all the team aware to the standard and the benchmark that set by Hilton Corporate. In addition, the report of every single data should be filed effectively. Thus the management would be able to create the plan in order to improve the performance and reduce the defects. All the feedback is also should be surveyed to both of guest and team member. Wibisino (2011) said that by having the real standard of working measurement, the company will be able to find how good their performance is.

REFERENCES Wibisino, Dermawan (2011) Manajemen Kinerja Korporasi & Organisasi: Panduan Penyusunan Indikator, Jakarta: Erlangga Jacobs, Chase, Aquilano (2009) Operation & Supply Management, New York: Mc Graw Hill Jacobs and Chase (2011) Operations and Supply Chain Management, New York: Mc Gra Hill Jay, Heizer and Render Barry (2008) Operation Management, 9th Ed, Pearson Education International Shim, Jae K, Siegel, Joel G, Shim, Allison L (2011) The Vest Pocket MBA, 4th Ed, New York: Penguin Sunyoto, Danang and Wahyudi, Danang (2010) Manajemen Operasional, Teori, SoalJawab, & Soal Mandiri, Jakarta: Caps Wood, Roy C, (2003) Strategic Questions in Food and Beverage Management, Oxford: Butterworth Heinemann