Lean in Hospitality
The Indian hospitality industry is growing at an incredible rate! The 2014 report published by the Ministry of Tourism, Government of India states that the number of domestic tourist visits to all states and union territories is 1282 million and is growing at rate of 11.9% annually. The advent of the online world has made it a real flat world. Yatra.com, Trip Adviser, Hotels.com, Make My Trip, Zomato, and so many others have given the platform to the people to find, select, rate and criticize Hospitality & Service Industry. It is evident that people are traveling more often these days, stay at hotels and dine at restaurants. Most of us are fond of food, love variety and continually find better eating spaces more so as the Indian cuisine offers a plethora of options.
It means a lot more inventory will be needed and stored so as to cook enormous varieties of food. This inventory is an endless list of quality items which are brought from various sources. Some of these items have short shelf life and some are very expensive. A good amount of cash is spent buying and managing the inventory. Any wastage must be reduced because any saving adds to our margin. Yesterday, no one cared about a bad omelet, stinking sink or dubious tariff cards however, today people have the master-key with them. They go online and compare. Service & Operational Excellence is no longer an exclusive feature, it is a necessity rather crucially vital for today and tomorrow’s market.
In order to sustain this kind of growth and development in the industry, the hoteliers need to take lead in making improvements in the quality of service and adopt best practices to optimize their operations. This will help them in winning the confidence of the domestic tourists as well as enhance their reputation and be competitive in the industry. However, if the Enterprises concentrate only on monetary gains, it reveals that they lack sensitivity towards organizational growth in terms of system, process and people development. It will force them out of the race.
The problems of the Industry or BITING THE BULLET
In the hospitality industry,a product is processed just like it is done in any manufacturing company. This industry has similar quality, cost and delivery pressures as in any other segment of business. The constraints are the same and generally as follows:
- Variation in demand – customer’s expectations are increasing with the change in global living conditions. High standards and disposable incomes have given to rise to behavioral changes in the customer who keeps looking for an out of the box experience.
- Competitive pricing – new channels of hospitality have opened offering from home stays to heritage hotels which cater all kinds of sections of people
- Fixed supply of resources and high operating cost
- No multi skilling–a cook will only cook and not clean will make the job a lot tougher for the helping staff to maintain the work-stations neat and clean. Similar jobs can be combined to efficiently utilize time and deliver to the customer.
- Seasonality – the changes in climate, holidays and vacations cause the ups and downs in business and buying patterns of the customer
- Organizational learning – management fails to learn from best practices adopted across the globe. The change in culture can help achieve competitive advantage.
- High rate of attrition–organizations fail to engage and involve all employees early in the process and this results in people doing unnecessary and meaningless work causing them to leave the job. Low Labor costs are also one of the causes.
Customer Requirement versus Organizational capability
Hospitality is the process of relationship between a customer and the service provider. A customer, fundamentally, requires a physical product or quality service in a welcoming and clean environment. However, there are other factors too which discreetly determine the customers’ requirement:
- Receiving special attention towards his personal needs
- Honest and just treatment which reassures feeling of importance
- Efficiency and patience of the staff serving affects customer’s behavior and decision making.
- Courtesy and warmth offered by both management and the staff
- Being kept informed
- Lastly, an invitation to come again
An organization’s capability is determined by its ability to manage resources like employees effectively in order to gain competitive advantage in the market and meet customer demands. However, an organization does not take decisions by itself, or allocate resources; it is implemented by the people. So, it is essential to highlight here that people are the core of processes. The capability building must augment the process of building better products or services through its people. Organizational Capability enhances perceived customer value in following ways:
- Competitive Advantage – focus upon improving internal processes and systems through Strategic planning gives
- Flexibility & responsiveness – meeting customer needs quickly and supreme quality
- Knowledgeable workforce – employee skills and efforts
- Improved Customer Relationships -
The solution –implementing Lean in Hospitality!
Lean focuses on creating VALUE from the customer’s perspective and eliminating process generated WASTEfrom the organization. These are generally invisible to customers. The concept of Kaizen or continual improvement helps to integrate & sustain the strategies by taking small steps towards perfection.
Hotel Sukh-SagarNX in Malegaon is in the initial stages of their Lean – Kaizen journey. The hotel comprises two service sectors – a 100 seater vegetarian restaurant and 21 rooms lodging facility. The restaurant runs seven days a week opening at 8 AM and closes by 11 PM. Home deliveries and parcels are two of its additional services. The kitchen is fully equipped with 12 burners that run throughout the day cooking colossal amounts of Indian food including Punjabi, South Indian, Chinese, Snacks, and Juices etc. The preparation for the day’s operations starts quite early.
The management seeks to institutionalize the principles of continual improvement and thus a cultural transformation is in progress with the goal to become “World Class”. The aim is to improve space utilization, reduce material search time, and create a system for a “place for everything and every useful thing in its place”. The objective is to develop a clutter free & service oriented work place which promotes a healthy and safe working environment. 5S is the starting point towards increasing efficiency and achieving workplace excellence.The 5Sprinciples of this tool are:
- Sorting –keeping only the necessary items in place
- Systematic arrangement – a place for useful things and everything in place
- Spic and Span – promote a clean and safe working environment
- Standardization – waste free processes
- Self-Discipline –moving towards perfection
We kicked off this process by implementing 5S principles in the hotel stores because the food production cycle begins with the procurement of items needed for cooking. Here are a few problems that were recorded systematically and the benefits gained after implementation of the technique.
“Talk about Sudhakar – personal benefits”
Sudhakar is the stores-in-charge. There are more than 200 items stored ranging from exotic spices, dry fruits to vegetables and fruits etc. Sudhakarwas phlegmatic initially since he had already spent considerable time arranging things according to his understanding and usage of items. During the Gemba Kaizen Workshop, he started finding solutions with the implementation of 1st S that is sorting, because he could really red-tag the items which were not needed at all in the stores.
- Time Saved – Before the implementation of Kaizen, Sudhakar used to spend an hour taking daily stock looking for items to be refiled. After implementation every item could be visually located and listed for daily or weekly purchase.
- No. of Items Stored – after implementation of 1st S and 2nd S, which is PEEP or (place for everything and everything in place) more space got created and new items could be added to present inventory. The items which were lying on the floor and some stocked outside like bags of rice and oil containers etc. were brought in and stored a fixed locations.
- Improved delivery – Before Kaizen much time was consumed to fulfill an order placed by the kitchen supervisor like refilling a daily requirement of crushed masalas of different kind and likes. Initially, Sudhakar could not identify easily because the containers used for storage were opaque and unlabeled.
- Physical Stock Taking – has made identification of items easier with the introduction of Visual Management system
- No Stock Out and No Overstocking – both at once
“It took us Five Days, first day was full of apprehension, then slowly it grew strong, lots of complain, then benefits convinced them and others also participated”. The kitchen staff saw the transformation of stores and how Sudhakar had been able to supply to their needs at beck and call. We helped them do some sorting and red tagged some of the unwanted items. The kitchen equipment maintenance is new item on our agenda. We will help the kitchen staff run their machines effectively. Our focus is upon creating a culture of ongoing improvement resulting in profitability and prosperity. The simple truth is that implementation explained to all of us that problems do exist. It became easier to acknowledge and see through the Lean-kaizen eyes that simplicity is the answer to our obstacles. Our utmost focus should be on creating only “value” for customers by making improvements continually through teamwork where Together Everyone Achieves More.
The journey ahead is quite exciting as we look forward to seeing a world class hotel in Malegaon. So when are you implementing Lean in Hospitality?