Prelim Operations Management 2024-2025 PDF

Operations Management in the Hospitality and Tourism Industry Monaliza C. Lealde 1st Term | AY 2024 – 2025 the  Operations management (OM) is a Introduction field of management concerned to Operations with designing, overseeing, and...

Operations Management in the Hospitality and Tourism Industry Monaliza C. Lealde 1st Term | AY 2024 – 2025 the  Operations management (OM) is a Introduction field of management concerned to Operations with designing, overseeing, and controlling the process of Management production and redesigning business operations in the production of goods or services. Importance in Hospitality and Tourism Industry ✓ Customer Satisfaction ✓ Efficiency and Cost Control ✓ Revenue Management ✓ Quality Control ✓ Supply Chain Management ✓ Technology Integration ✓ Sustainability ✓ Crisis Management ✓ Employee Management ✓ Guest Experience Key Functions Planning Organizing Leading Controlling  Planning is a fundamental management function that involves defining goals, establishing Key strategies to achieve those goals, Functions: and developing plans to integrate and coordinate activities. Planning  Importance in Operations Management: In operations management, planning is crucial for: Resource Allocation: Ensuring that human, financial, and physical resources are Key available and utilized efficiently. Goal Setting: Defining clear, achievable Functions: objectives for the organization or project. Risk Management: Identifying potential Planning obstacles and developing strategies to mitigate risks. Coordination: Synchronizing activities across different departments and functions to achieve a common goal. Performance Measurement: Establishing benchmarks and standards to measure progress and performance.  Organizing is a fundamental management function that involves arranging resources and tasks in a Key structured way to achieve the objectives of an organization. Functions: It includes establishing a framework Organizing for activities, assigning responsibilities, and coordinating efforts to ensure efficient and effective operations. Key Functions: Organizing Key Aspects of Organizing: 1. Division of Labor: Breaking down tasks into smaller, manageable components and assigning them to individuals or teams based on their skills and expertise. 2. Departmentalization: Grouping similar activities into departments or units to improve efficiency and coordination. 3. Hierarchy and Authority: Establishing a clear chain of command where authority and responsibility are defined at various levels of the organization. 4. Coordination: Ensuring that different parts of the organization work together harmoniously towards common goals. 5. Resource Allocation: Distributing resources such as personnel, budget, and equipment to different departments or projects.  Leading is one of the fundamental functions of management, focused on Key directing and motivating Functions: individuals or teams to achieve organizational goals. Leading Key Functions: 3. Leading Key Aspects of Leading: Motivating: Encouraging and inspiring employees to achieve their best performance. Communicating: Effectively conveying information, expectations, and feedback between managers and employees. Influencing: Shaping the behavior and attitudes of employees to align with organizational goals. Team Building: Creating a cohesive and collaborative work environment. Decision Making: Making choices that guide the direction of the team or organization. Developing: Facilitating the growth and development of employees’ skills and careers. Key Functions: Leading Leadership Styles: Autocratic Leadership: Centralized decision-making with little input from employees. Democratic Leadership: Involves employees in the decision-making process. Transformational Leadership: Inspires and motivates employees to exceed their own expectations and capabilities. Transactional Leadership: Focuses on routine, supervision, and performance- based rewards and punishments. Laissez-Faire Leadership: Gives employees a high degree of autonomy and responsibility.  Controlling is a fundamental management function that involves monitoring, evaluating, and regulating organizational activities Key to ensure that goals and objectives Functions: are achieved. It includes setting performance Controlling standards, measuring actual performance, comparing it with standards, and taking corrective actions if necessary.  Setting Performance Standards: Establishing benchmarks or criteria against which performance can be measured. Key Measuring Actual Performance: Collecting data and information to assess actual Functions: performance. Comparing Performance Against Controlling Standards: Evaluating the difference between actual performance and set standards. Taking Corrective Action: Implementing actions to address any deviations from the standards.  1. Planning What are the 2. Organizing four key 3. Leading functions of 4. Controlling Operations Management?  is the process by which an organization defines its strategy, or direction, and makes decisions on allocating its resources to pursue this strategy. Strategic management It involves setting objectives, analyzing the competitive environment, evaluating internal organizational structure, and implementing strategies across the organization to ensure long-term success and competitive advantage.  Operations Management Vs. Strategic Management Operations Management Strategic Management Planning: Forecasting demand, capacity planning, Strategic Planning: Analyzing internal and external production planning. environments, setting long-term goals, and formulating strategies. Organizing: Designing workflows, facility layout, resource allocation. Strategy Implementation: Allocating resources, establishing organizational structure, and managing Leading: Team leadership, communication, employee change. development. Strategy Evaluation: Monitoring performance, reviewing Controlling: Quality control, performance measurement, strategies, and making adjustments as necessary. cost control, inventory control.  Service operations refer to the management and execution of activities involved in delivering a service to customers. Service Operations Key Service operations in the hospitality and Characteristics tourism industry possess several unique of Service characteristics that distinguish them from other types of operations. Operations  Intangibility: Unlike physical goods, services cannot be seen, touched, or stored. The value of the service is in the experience provided to the customer. Inseparability: Services are typically produced Key Characteristics and consumed simultaneously, meaning that the delivery of the service cannot be separated of Service from its consumption. Variability: Service quality can vary greatly Operations depending on who provides the service, when, where, and how it is delivered. Perishability: Services cannot be stored for later use; if they are not sold at a specific time, the opportunity to sell them is lost. Customer Participation: Customers often play a role in the delivery of the service, whether through interaction with employees or through self-service technologies. Key Aspects of Service Operations Service Design: Planning and organizing the resources, processes, and systems needed to deliver a service. Capacity Management: Ensuring that the service provider has the right amount of resources to meet customer demand without excessive delays or idle resources. Service Quality: Ensuring that the service meets or exceeds customer expectations. Customer Relationship Management (CRM): Managing interactions with customers to enhance their experience and build loyalty. Service Delivery: The actual process of providing the service to the customer. Process Improvement: Continuously analyzing and enhancing service processes to increase efficiency and customer satisfaction. Components of Service Operations: 1. Service Blueprinting: A visual tool for mapping out the service process, identifying key touchpoints, and ensuring a smooth customer journey. 2. Queue Management: Managing customer wait times and service lines to improve the customer experience. 3. Service Recovery: Strategies for addressing service failures and restoring customer satisfaction. 4. Technology in Service Operations: Utilizing technology to enhance service delivery and operational efficiency. Capacity Management in Hospitality and Tourism Services Capacity management is crucial in the hospitality and tourism industry, where businesses must balance available resources with fluctuating demand to maximize efficiency and customer satisfaction. Effective capacity management ensures that hotels, restaurants, airlines, and other service providers can meet guest needs while optimizing resource utilization. Understanding Capacity in Hospitality and Tourism Services Capacity in hospitality and tourism refers to the maximum amount of service output a facility can handle within a given period. This includes the number of rooms in a hotel, seats in a restaurant, or passengers on a flight. Types of Capacity: 1. Physical Capacity: The tangible assets, such as the number of rooms, tables, or seats available in a facility. 2. Labor Capacity: The number and skills of employees available to deliver services. 3. Operational Capacity: The efficiency and capability of the operations to deliver consistent service, which may include kitchen speed, housekeeping turnaround, or flight boarding processes. Strategies for Capacity Planning: 1. Demand Forecasting: Anticipating future customer demand based on historical data, market trends, and external factors such as events or seasonality. 2. Flexible Capacity: The ability to adjust capacity in response to changes in demand. 3. Capacity Cushion: Maintaining extra capacity to handle unexpected increases in demand or service disruptions. 4. Yield Managemen: Optimizing revenue by adjusting prices based on demand and capacity utilization.  What is Overbooking Implications of Overbooking: 1. Positive Impacts: 1. Maximized Revenue: By overbooking, hotels, airlines, and other service providers can ensure full utilization of resources, thereby maximizing revenue. 2. Risk Mitigation: Helps offset the financial impact of no-shows and cancellations. 2. Negative Impacts: 1. Customer Dissatisfaction: Overbooking can lead to situations where more guests arrive than the available capacity, resulting in some customers being turned away or “bumped,” which can harm the brand's reputation. 2. Operational Challenges: Handling overbooked scenarios requires quick decision-making, finding alternative arrangements, and potentially offering compensation. 3. Legal and Ethical Issues: Overbooking can lead to legal disputes and may be seen as unethical if customers are not informed in advance or compensated adequately. Supply Chain Management in Tourism and Hospitality Supply Chain Management (SCM) is a critical component in the tourism and hospitality industry, where the seamless coordination of various elements ensures the delivery of high-quality experiences to customers. SCM in this sector involves managing the flow of goods, services, and information from suppliers to the end customers, with an emphasis on sustainability and efficiency. Supply Chain Management in Tourism and Hospitality SCM in tourism and hospitality involves the strategic management of all activities related to sourcing, procurement, production, and logistics to ensure the efficient delivery of products and services to customers. It includes managing relationships with suppliers, distributors, and other stakeholders to optimize the value chain. Importance of SCM in Tourism and Hospitality: Customer Satisfaction: Effective SCM ensures that the right products and services are delivered at the right time, meeting customer expectations and enhancing their overall experience. Cost Efficiency: By optimizing procurement processes and logistics, businesses can reduce costs, increase profitability, and offer competitive pricing. Competitive Advantage: A well-managed supply chain can provide a competitive edge by ensuring consistent service quality and the ability to adapt to market changes quickly. Risk Management: SCM helps mitigate risks such as supply disruptions, quality issues, and fluctuations in demand, ensuring business continuity. Sustainability: Integrating sustainable practices in the supply chain contributes to environmental protection and enhances the brand’s reputation among eco-conscious consumers. Key Components of SCM: 1. Suppliers: Suppliers provide the necessary goods and services required by tourism and hospitality businesses, such as food, beverages, cleaning products, linens, and more. 2. Distributors: Distributors are intermediaries that facilitate the movement of goods from suppliers to the end customer or to the businesses themselves, such as food distributors, beverage suppliers, and equipment rental companies. 3. Information Systems: Information systems are the technological tools that manage and track supply chain activities, providing real-time data and analytics for better decision-making.  What is the term Quality mean? Quality The ability of a product or service to consistently meet or exceed customer Management expectations.  Involves systematically managing and Quality improving service delivery to ensure Management customers consistently receive high-quality experiences. Quality Assurance Vs. Strategic Approach Quality Assurance: Strategic Approach: Emphasis on finding and Proactive, focusing on correcting defects before preventing mistakes from reaching the market occurring.  a methodology focused on improving efficiency and effectiveness by eliminating Lean waste, optimizing processes, and delivering value to customers. Core Principles of Lean Operations 1.Value Identification: Understand what is valuable to the customer and focus on activities that enhance that value. 2.Value Stream Mapping: Visualize the entire flow of processes from raw materials to customer delivery to identify and eliminate non-value-added activities (waste). 3.Flow Optimization: Ensure that processes flow smoothly without interruptions, delays, or bottlenecks. 4.Pull Systems: Produce goods or provide services based on actual customer demand rather than forecasts. 5.Continuous Improvement (Kaizen): Continuously seek to improve processes, reduce waste, and enhance value through incremental changes. 6.Perfection: Strive for perfection by eliminating all forms of waste and optimizing processes to achieve the highest possible efficiency and quality. Key Lean Tools and Techniques for Operations 1. Value Stream Mapping (VSM): Identify all the steps in a process, highlight waste, and create a future state map to improve efficiency. 2. 5S (Sort, Set in Order, Shine, Standardize, Sustain): Organize and maintain the workplace to improve efficiency and reduce waste. 3. Kanban: Manage workflow and inventory based on demand to reduce excess inventory and improve efficiency. 4. Just-in-Time (JIT): Reduce inventory levels and produce items only when needed, minimizing waste and storage costs. 5. Poka-Yoke (Error Proofing): Prevent errors and defects by implementing fail-safe mechanisms. 6. Root Cause Analysis: Identify the underlying causes of problems to address them effectively and prevent recurrence. 7. Standard Work: Document best practices and procedures to ensure consistency and efficiency in operations. 8. Cellular Manufacturing: Arrange workstations in a cell configuration to improve workflow and reduce cycle times. 9. Quick Changeover (SMED - Single Minute Exchange of Dies): Reduce the time required to switch from one production setup to another, improving flexibility and reducing downtime.  Case Studies: Marriott International Implementing Lean Principles for Enhanced Efficiency Background: Marriott International, a global leader in the hospitality industry, aimed to enhance operational efficiency and improve guest satisfaction by applying Lean principles to its hotel operations. Challenges: Inefficiencies in housekeeping operations leading to delayed room readiness. Long wait times during peak check-in periods. Excessive inventory and waste in the supply chain. Implementation: Value Stream Mapping (VSM): Marriott mapped out the entire housekeeping process, identifying steps that added no value and created delays. This led to a redesign of cleaning procedures and better allocation of resources. 5S System: The housekeeping staff implemented the 5S system to organize their supply rooms, reducing time spent searching for cleaning materials and improving overall efficiency. Kanban System: A Kanban system was introduced to manage inventory levels for cleaning supplies, ensuring that materials were replenished based on actual usage rather than forecasts. Results: Reduced room turnaround time by 15%, improving guest satisfaction. Decreased inventory costs and waste by optimizing supply chain management. Enhanced efficiency in housekeeping operations, leading to better overall service delivery.  Case Studies: The Ritz-Carlton Background: The Ritz-Carlton, known for its luxury service, sought to further enhance its guest experience through continuous improvement initiatives. Challenges: Variability in service quality across different locations. Opportunities for process improvements identified through guest feedback. Implementation: Kaizen Events: The Ritz-Carlton conducted Kaizen events to address specific service challenges identified through guest feedback. These events involved staff at all levels and focused on incremental improvements in service delivery. Standard Work: The hotel developed and standardized best practices for key service areas, such as guest check-in/check-out procedures and personalized guest interactions. Results: Achieved a significant improvement in guest satisfaction scores. Fostered a culture of continuous improvement, leading to ongoing enhancements in service quality. Standardized best practices across different locations, ensuring a consistent luxury experience.  Case Studies: Hilton Worldwide Background: Hilton Worldwide, a major player in the global hospitality market, faced challenges related to excess inventory and high storage costs for hotel supplies. Challenges: High inventory levels leading to increased storage costs. Inefficient supply chain management resulting in frequent stockouts or overstocking. Implementation: Just-in-Time (JIT) System: Hilton implemented a JIT inventory management system to align supply orders closely with actual usage and demand. This involved close coordination with suppliers and real-time tracking of inventory levels. Process Redesign: The company redesigned procurement processes to ensure that supplies were ordered and delivered just in time for use, minimizing storage needs and reducing waste. Results: Reduced inventory levels by 20%, lowering storage costs and waste. Improved efficiency in supply chain management, leading to more timely and accurate replenishment of supplies. Enhanced operational efficiency and cost savings.