by Mark Heymann, ISHC - UniFocus Chairman & CEO
Over
50 years ago, when Quality Assurance (QA) approaches and concepts were
introduced to the market, most work was done in the manufacturing
sector. Manufacturing presents certain advantages regarding
productivity management and improvement, one of the most significant
being inventory. With inventory, the production process could be more
controlled and systematized.
When the customer was ready to buy, you went to a shelf and gave the
purchaser what they requested. Then as these QA concepts evolved,
production moved to a just-in-time management approach for greater
production optimization, with inventory still creating the buffer
between production and purchaser. Parts were made available, just at
the right time, to keep the production line flowing. Parts
inventory was better managed and operating costs better
controlled. Production performance was measured on total product
per person hour and machine output per hour. Measurement could
still be done in time frames such as weeks, as you could catch up
production tomorrow if you fell short today or if you didn’t meet your
production goals on a specific day. Inventory was still the
safety net. In essence, goods were produced at one point in time
and the service was delivered at a future point in time.
Turn now to the
hospitality industry, where just-in-time delivery is our operating
norm, as prompt service is a very significant part of what the customer
defines as the product they are purchasing. Service is also
important when you buy a car, but that is not your key measure of
whether you will buy another car of the same make and model. In
the hospitality industry, service perception surely is key to a
consumer’s repurchase decision. One of the challenges the
industry faces is that if production is missed on a specific day, in
many cases, catch up cannot be done the next day. You can’t check
someone in Wednesday, who arrived Tuesday. You can’t serve a
customer in the restaurant at night when they want breakfast. You
can‘t clean the checkout tomorrow if a guest is checking into the room
tonight. There simply is no inventory buffer as there is in a
manufacturing operation. Service by its nature necessitates
processes where resources (human and product) are available at the
exact time the buyer wants to purchase. That means production
planning must account for the product delivery moment, where the
product is a combination of goods and services bundled at the same time.
In the hospitality world, a key part of production planning is the
scheduling of one’s human resources. And as importantly,
measuring how effectively the resources are being used to maximize
productivity, which generally means that one is comparing production to
an established standard. Unlike manufacturing, where if you want
to produce 100 widgets per hour and you can control that production to
inventory, hospitality on the other hand requires a calculation of what
demand will be and matching your means of production to that
projection. In the end, production management requires real time
assessment of your performance and measurement to an established
target production rate.
What I have found
interesting in the last few months of assessing performance for various
clients and potential business “partners” is that performance
measurement is still frequently evaluated on a weekly and/or monthly
basis. While this approach can work in manufacturing, if you are
not looking at your productivity every day, I believe you are missing
key criteria by which to improve your business, either from a service
delivery standpoint or a pure resource use perspective. As noted
above, you can’t catch up tomorrow for under production today (wasted
hours) or for the service that wasn’t provided to the guest in a timely
manner. It’s the same with forecasting. Over a week, on
average you may be accurate, but if you are over 3 days, under 2, or
just about right on 2 days, can you really be cost effective and
meet your service delivery goals? After years of observation, the
answer is no, you can’t.
Whatever tools you
are using for “production” planning and measurement, they must focus on
daily results and in the best of cases, a part of day measure that
enables the operation to meet specific delivery and production
standards, JUST IN TIME. Because without this more
micro-approach, you are playing Russian roulette with your service
delivery. And especially in today’s challenging operating
environment, no one can afford to play that game!
This article appeared in Lodging Insider in the April 2009
issue.
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