The report provides a literature review with a thorough research about the philosophy of the lean management and its common concepts by providing a number of well-known companies’ examples. It also discusses and analyses how the Green Hotel organization implements the concepts within a lean management system in practice by organising a wedding occasion. Some calculations and other appendixes are provided in order to determine the extra resources and the scheduling of the work.
2.0 The Philosophy of Lean Management
Lean management system is one of the most innovative and popular management techniques, which many firms are using today. According to Plenert (2007), lean is a systematic approach that focuses the entire enterprise on continuously improving quality, cost, delivery, and safety by seeking to eliminate waste, create flow, and increase the velocity of the system’s ability to meet customer demand. It also means that the flow of products or services always delivers exactly what customers want, in exact quantities and exactly when needed at the lowest possible price.
The basic concepts of lean management are: value stream mapping, 5S’s, continuous improvement, flow, just-in-time (JIT), total quality management (TQM), waste minimisation and, in some applications, 6 sigma methodology. Pascal (2007) states that value stream mapping is an invaluable tool that helps organisations to grasp the current condition and identify improvement opportunities. In other words, it is a technique for dramatically representing a process, to aid critical analysis of the process by a team of knowledgeable people. According to Bicheno (2009) the main purpose of mapping is to design the future. This is done by establishing priorities for lean implementation, short and medium term. It is also a great tool for ideas generation in general. 5S is perhaps the most popular tool in lean. The typical Japanese 5Ss are generally translated into sort, simplify, scan, standardise and Sustain steps. The objectives of a 5S are to reduce waste and variation as well as to improve productivity. By implementing 5S concept, places are clean and clear, highly motivated employees are working according to an order without any stress or pressure. Chambers and Johnston et al (2009) argue that continuous improvement adopts an approach to improving performance that assumes a never-ending series of small incremental improvement steps. Goetsch (2013) agrees that continual improvement seeks to eliminate waste in all forms, improve quality of products or services, and improve customer reaction- and do all of this while at the same time reducing costs. With JIT concept, a business holds no stock and instead relies upon deliveries of raw materials and other resources to arrive exactly when they are needed. (BBC, 2014) Dell Inc. successfully applied JIM principles in order to be able to provide an exceptionally short lead times to their customers with quickly assembly and shipping. Many principles of flow are linked with JIT. According to Goetsch (2013) flow production means production that runs easily and steadily without disruption. Boddy (2014) describes TQM as a philosophy of management that is driven by customer needs and expectations and focuses on continually improving work processes. This concept also includes every person in organisation who develop the idea of continuous and incremental improvement. Six sigma also plays a significant role in the overall process. It is a strategy within the context of total quality that moves the target to a far higher level of quality than organisations have succeed in the past. The objective of lean six sigma is to make the organisation better in its routine work and processes, its products or services, and its business outcomes.
It is believed that the most significant part of the lean philosophy is its focus on the elimination of all forms of waste which does not add value. According to Slack et al. (2011) there are seven types of waste: over-production, waiting time, transport, process, inventory, motion and defectives. Bicheno et al. (2009) believe that the waste of overproduction is the most serious of all the wastes because it is the source of many issues and other wastes. Overproduction is all about producing more than needed by the next process in any operation. For instance, to print documents or process items before they are required by the next person in the process. The waste of waiting is probably the second most important waste. It usually appears due to broken machinery, lack of skilled staff and discipline or inefficient planning. For example, in a factory business, any time that an item is seen to be not moving is a sign of waste. Transporting waste cannot be fully eliminated but it is also a waste that should be reduced over time. This particularly includes pointless transfers or distance travelled by materials, information or people. Movement or process itself may be a source of waste as moving customers or products around the operation often does not add value. (Slack et al, 2011) The waste of unnecessary inventory (such as raw materials, work in progress and end items) also exists. Next in importance is the waste of unnecessary motions which refer to both human and layout. For instance, an operation may look busy but sometimes no value is being added by the work. The waste of defects also cost money, for example, Toyota philosophy is that a defect should be regarded as a challenge rather than something to be tradeoff against what is ultimately poor management.
Nowadays, many companies such as Nike, Intel, Ford, Toyota, Textron, Caterpillar Inc. and many others use lean management principles. For example, Nike worked with Fair Labor Association in order to create performance indicators and maintainable sourcing and launched the Sustainable Apparel Coalition with the US Environmental Protection Agency and other manufacturers, and in the process saved money on energy and waste materials. (Wilkes, 2013) Intel, the world’s largest computer chip maker company, had to spend 14 weeks to introduce a new chip to the factory, however, after using lean principles it takes only 10 days. The US Caterpillar machinery manufacturer admitted that pace is a critical characteristic of lean integration, and if project takes too long to complete, the business will fail. In order to be successful, projects must be quickly implemented.
The main benefit of the lean management system is that the work which is under execution is reduced. Lean management system increases the production level to a higher level. It also focuses on customer satisfaction. E.g. when the products or services are good quality and delivered on time, the company receives a positive feedback from the client. This feedback improves the sales of the product and also builds a strong trust relationship and a sense of need between the company and its customers. Leadership is an important part of lean management system; leadership helps to increase income of the company. A well-qualified and skilled professional who manages the company can provide a better development to the business. The lean management system is especially effective and productive when a task is performed by a group of members rather than individually. It is also useful for both small and large scale industry.
3.0 Application of concepts
The successful implementation of lean management philosophy to any organisation requires a thorough analysis and understanding of the current situation and possible valuable outcome. There are three concepts which are the most likely to be implemented in hospitality industry, particularly for the Green Hotel Company: value stream mapping, 5S and TQM.
Value stream mapping (VSM), the Japanese concept of Kaizen, is a tool that uses symbols to describe a value stream. Good mapping practice has four maps: current state, future state, ideal state, and action plan. It provides an opportunity to visualise a horizontal process view through organisational and functional structures in order to form a better understanding of the true value of each activity. (Aitken, 2014) One of the main advantage of VSM is that it provides a very clear focus to where the lean tools must be applied and ensures that the end to end process is optimised. Danaher Corporation have been using VSM as a tool in order to focus on activities in the pursuit of a lean organisation over the 5 years. It is not uncommon for processes with lead times in excess of 20 days to be completely restructured to less than 5 days over a period of 3-6 months, in addition to major decreases in inventory and batch sizes. (Source: http://www.oeeuk.com) VSM can help the Green Hotel organisation to guide creative thinking around process redesign and improvement options. For instance, the process of cleaning a hotel room can be easily analysed and planned with the help of value stream mapping. By implementing the VSM, the organisation can easily detect waste in a business process. Having a visual image may help the Green Hotel business to see the story of how the product or service makes its way to customers’ hands.
The 5S process is one of the most central and widely applied component of lean management. Five-S is considered as essential to continual improvement. (Goetsch, 2013) It is a method of doing things that eliminates waste and reduces faults, defects, and other damages. Benefits to the business from using the 5S methodology include improving quality, lowering costs, promoting security, building buyer confidence, increasing factory up-time, and lowering repair prices. A proper sortation of stock equipment such as spare tools, documentation and other items can help the hotel to identify the useless things and dispose it in order to save time searching around the work area. The useful items must be stored safe and kept in its place so that they are visible and immediately available to the workforce. This storage manner can comfort the hotel’s staff to access the needed equipment (extra chairs, bed clothes, detergents) by having it easily at hand every time it is needed. All of these lead to a cleaning work area around as the act of keeping everything clean becomes a form of inspection of machines, tools and environmental conditions. Standardize and sustain state for selecting the best practice and make sure that rules are followed and functioning well in organisation. The implementation of 5S can make hotel employees feel better about their work environment as well as improve productivity and reduce possible waste.
It is believed that TQM is a key concept of lean management and plays an essential role in improving the quality of products and services based on customers’ feedback. The Four Season Hotel is a good example of successfully implementing TQM methodology. Their golden rule is all about treating their guests with politeness and intelligence. They focus on listening carefully to the guests and meeting their expectations and needs. All Four Seasons hotels use a ‘guest history system’ to track guests’ preferences in order to prevent possible mistakes in the future. (Slack, N & Chambers, S; 2009) Ryanair, on the other hand, does not offer luxury service as they position themselves as a low-cost airline. Both companies describe quality as ‘getting the service you expect, given what you are paying’ by seeing things from a customer’s standpoint. The implementation of TQM methodology to the Green Hotel organisation can help to raise profitability, improve and increase customer satisfaction/loyalty, enhance market image as well as straighten competitive position. TQM covers all parts of the organisation and includes every person in the organisation as well as across the supply chain; it has clear systems and procedures to support quality and developing the idea of continuous improvement, implemented by teams; also, it tracks all costs affecting quality, especially those of failures and of getting things right first time. (Boddy, 2014)
4.0 Challenge Plan
This section describes the Green Hotel and provides a solution to the problem and a plan for running a wedding party for 120 guests in 8 weeks’ time. Some calculations, extra resources and scheduling of entertainment activities are analysed and prepared in clear details. Boddy (2014) states that planning sets out the overall direction of work which includes forecasting future trends, assessing resources and developing performance objectives.
It is obvious that the wedding party is usually celebrated on Friday-Sunday week days. According to the information produced, the average bedroom occupancy is 60% Friday to Sunday what makes it easy to locate 120 guests in 30 bedrooms hotel:
30 bedrooms – 100%
x bedrooms – 60%
30*60/100=18 (bedrooms) – It means that 60% of occupancy takes 18 bedrooms.
30 bedrooms – 100%
12 bedrooms – x %
12*100/30=40 – It means that the rest 12 bedrooms (out of 30) takes 40%.
Besides, most rooms are refundable if someone cancel it 48h ahead of check-in process.
All produce is sourced from suppliers within a 50 miles area. This supports their “Green ambitions” and helps to minimise their carbon footprint. Delivering smaller quantities more frequently can reduce inventory levels and shorten lead times. It will take approximately 2 hours for a vehicle driving 50mph in both ways, stuff loading may take around 1.5-2 hours as well as unloading:
2+ (2*2) =6 (hours) – All the stuff delivery takes maximum 6 hours in a day.
According to the fact that the busiest days are Fridays-Sundays, it is more advisable to do any delivery processes on Mondays-Thursdays as it is more convenient for the working staff to meet their time management and set priorities correctly. However, food must be delivered as close to the wedding party day so that it will stay fresh.
The main resources list includes:
Food and Beverages (hot and cold) (480 portions of dishes- three course lunch & buffet, 108 alcoholic bottles for cocktails and etc., 240 bottles of soft drinks)
Extra furniture (chairs x 120, tables x 30, outdoor seats x 10)
Extra kitchen dishes and table clothes (plates x 120, glasses x 290, knives & forks x 290, napkins etc.)
Extra bedclothes x 120
Large TV screens x 2
Music and sound equipment (microphones, loudspeakers) x 1 set
Other (fireworks, flowers, grill etc.) x quantity by request
The following graph below illustrates the delivery dates during the 8 weeks’ time.
Every wedding occasion requires a variety of entertainments for adult and their children. The Green Hotel can provide an outdoor ceremony for newlyweds and their guests as well as an outside party with different snacks, beverages and buffet facilities. There is a need to hire more bartenders and runners who can serve food and cocktails as well as do cleaning at night. Another activity for adults is a large TV screen with photo collage showing the bride’s and groom’s life. Different musicians, DJs or showgirls may cover the background and make the event especially memorable and lively. The Green Hotel also provides a large dance floor with disco ball and other decorations. Activities for children are also included, for example, a game room and an outdoor swings. Any other entertainments or decorations facilities can be booked outside of the Green Hotel. The graph below shows the supposed entertainments timescale during the wedding event.
ISO 9000’s operating principle (Plan-Do-Check-Act) will help to guarantee that the products or services provided by organisations are regularly fit for the intended purposes. Plan-Do-Check-Ant cycle result in continual improvement for products/services, processes and systems of processes. (Goetsch, 2013) By establishing objectives and developing the future plans, and putting it into action, it is easier to measure the result of action or were the objectives met? It will help to learn from the results and make any necessary changes to the plan and repeat the cycle. The implementation ISO 9000 to the Green Hotel’s wedding occasion will help to set priorities and improve client satisfaction as well as achieve continual improvement of organisational performance and competitiveness. The cycle below illustrates the implementation of ISO 9000 to the wedding party at the Green Hotel.
The main aim of the lean system is to eliminate waste so as to improve productivity – the only effective strategy under the new economics. Lean activities are interrelated and mutually supportive and are informed by the same way of thinking. The positive goals of lean production include creating flow so that the customer can pull and involving the workers in improvement activities. (Pascal, 2007) This report also produced a solution to a planning problem at the Green Hotel by providing a list of needed resources and its quantities, schedule of delivery dates and wedding entertainment activities.
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