Ritz Carlton Case Discussion 5w3a3k

Ritz-Carlton

Prof. Silverman

p. 1

Ritz-Carlton •

Strategy –

– – – –

–

Operate hotels in the luxury segment of the market Focus on personalized service to customers Strive to improve operational efficiency Have procedures to ensure the highest quality standards Provide consistent quality at all properties (worldwide) Achieve high levels of service through: •

Building systems to measure service performance • Responding to problems quickly • Anticipating customer demand • Reacting quickly to that demand

p. 2

Ritz-Carlton •

Operations Strategy –

– – – –

–

Steadfastly collect data on guest preferences Continuous effort to develop novel approaches for improvement Hire people with an aptitude for service Strong emphasis on training across all departments Empowering employees to solve customer problems Reward structure that recognizes employee performance

p. 3

Ritz-Carlton •

Performance –

Won Malcolm Baldrige Award 1992 • •

Only hotel company to win this prestigious award Award criteria – – – – – – –

–

Leadership Strategic Planning Customer and Market Focus Information and Analysis Human Resource Focus Process Management Business Results

Proportion defects is only .0037

p. 4

P-chart 14 out of control days

p = .0037

0.035 0.03 0.025 0.02

p p-bar UCL LCL

0.015 0.01 0.005 0 -0.005

323

309

295

281

267

253

239

225

211

197

183

169

155

141

127

113

99

85

71

57

43

29

15

1

-0.01

p. 5

Occupancy Occupancy 600

100.00% 90.00%

500 80.00% 70.00% 400

60.00% 300

50.00% 40.00%

200 30.00% 20.00% 100 10.00% 0

0.00% Saturday

Friday

Wednesday

Thursday

Tuesday

Monday

Sunday

p. 6

Quality Problems by Defect Defects by Type 200

100.00%

180

90.00%

160

80.00%

140

70.00%

120

60.00%

100

50.00%

80

40.00%

60

30.00%

40

20.00%

20

10.00%

0

0.00%

p. 7

Quality Problems by Day of Week All Defects by Day 120

100.00% 90.00%

100 80.00% 70.00% 80

60.00% 60

50.00% 40.00%

40 30.00% 20.00% 20 10.00% 0

0.00% Friday

Saturday

Sunday

Tuesday

Thursday Wednesday

Monday

p. 8

Quality Problems as % of Occupancy All Defects as % of Occupancy by Day of Week 0.700%

100.00% 90.00%

0.600% 80.00% 0.500%

70.00% 60.00%

0.400% 50.00% 0.300% 40.00% 30.00%

0.200%

20.00%

0.100% 10.00% 0.000%

0.00% Sunday

Friday

Tuesday

Thursday

Saturday

Monday

Wednesday

p. 9

Room Clean by Day of Week Room Clean Defects by Day of Week 40

100.00% 90.00%

35

80.00% 30 70.00% 25

60.00%

20

50.00% 40.00%

15

30.00% 10 20.00% 5

10.00%

0

0.00% Sunday

Saturday

Friday

Monday

Tuesday

Wednesday

Thursday

p. 10

Incorrect Reservation by Day of Week Incorrect Reservation by Day of Week 30

100.00%

90.00% 25 80.00% 70.00% 20 60.00%

15

50.00% 40.00%

10 30.00% 20.00% 5

10.00% 0

0.00% Wednesday

Sunday

Saturday

Friday

Thursday

Monday

Tuesday

13 incidents on one Wednesday p. 11

14 Out of Control Days 14 Out of Control Days by Defect 30

25

100.00%

13 of these were due to a single incident on 3/12

90.00% 80.00%

70.00%

20

60.00% 15

50.00% 40.00%

10

30.00% 20.00%

5

10.00% 0

0.00%

• 105 Defects on 14 Out of Control Days p. 12

Room Clean p-chart

0.02 0.015

Sun

Sun

Sun

Fri

0.01

Fri

Sat

Sun

p

Wed

UCL

0.005

LCL p-bar 321

305

289

273

257

241

225

209

193

177

161

145

129

113

97

81

65

49

33

17

1

0 -0.005 -0.01

8 out of control days

P-bar = .0013 p. 13

7-Jan-97 12-Jan-97 14-Jan-97 15-Jan-97 17-Feb-97 12-Mar-97 20-Apr-97 27-Apr-97 15-May-97 4-Jul-97 13-Jul-97 25-Sep-97 1-Oct-97 7-Nov-97

9 8 7 7 5 15 6 5 7 10 5 7 7 7

O bs er va tio n

al s To t

Da te 2

14 Out of Control Days

Sunday

Presidents Day Sunday Sunday Independence Day Sunday

p. 14

Analysis •

Room clean largest problem • Room cleaning problems on Sunday • More problems on weekends • Room clean out of control on weekends and holidays • All defects out of control 50% of time on Sunday and holidays • Room assignment problem during the week

p. 15

Problems from Analysis •

Staffing on Sunday • Management on Sunday • Leisure vs. business customers • Room assignment problems may be caused by empowerment and reservation system • Check in/check out delays may be caused by leisure customers • Reservation system utilization causing incorrect reservations • Insufficient staffing or systems for wake-up calls

p. 16

Recommendations •

Sunday staffing –

– –

Management Housekeepers Rotation of Sunday assignments

•

Better coordination between front desk and housekeeping on room cleaning readiness • Better coordination for reservation systems • Computer backup for wake-up calls • Better management and training for housekeepers • More integration of housekeeping and engineering • Reserve specific rooms when so requested

p. 17

Ritz-Carlton Initiatives •

Room cleaning in teams of three –

– –

•

• •

Lower worker turnover Higher productivity Better quality

Display SQI (service quality indicator) throughout hotel so employees can monitor real-time guest service processes Developed POLO (protect our little ones), a child safety program in response to increased family travel Developed CLASS (customer loyalty anticipation satisfaction system) a company-wide database to meet and anticipate repeat customer’s preferences and requirements p. 18

Ritz Carlton Initiatives •

Segment check-in system –

–

•

•

Express for business travelers Pampered with champagne and a presentation of hotel services and amenities for leisure travelers

Merge deep cleaning housekeeping processes with engineering preventive maintenance schedule to ensure that all guestrooms are guaranteed to be defect free every 90 days Stagger lunch hours of housekeeping supervisors to streamline guest room inspection process. This reduces the problem of guest room readiness

p. 19