5.0 htm 209 – om delivery planning and control 111114

7/18/2019 5.0 HTM 209 – OM Delivery Planning and Control 111114

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HTM209 – Hospitality

Operations Management

Semester Two - 2014



HTM 209 – Hospitality

Operations Management

Tutor : Julian Galt

Room : B2-24

E mail : [email protected]



HTM209 Operations Delivery:

Planning and Control



Operations in Practice:Joanne manages the schedule – (Text page 289)

Consider, note and prepare to report as

follows...:

• What are the main activities of the planning

and control system that Joanne manages?

• How does Joanne attempt to meet the,

sometimes conflicting, requirements of

customers...

• ...and the workshop, as she manages the

planning and control system?



Operations in Practice:Joanne manages the schedule – (Text page 289)

Main activities of the planning and control system that Joanne manages?• The system m ust inter face with cus tomers. This customer interface is important

because it defines the nature of the customer experience. This is why Joanne

stresses the importance of managing customer expectations.

• The system inter faces with supp l iers – The timing and level of activities within the

operation or process will have implications for the supply of products and services tothe operation. In this case, the most important ‘supply’ will be the spare parts that

are needed

• The system perform s basic planning and control calculat ions – Planning and

control requires the reconciliation of supply and demand in terms of the level and

timing of activities within an operation or process.

• How does Joanne attempt to meet the, sometimes conflicting, requirements ofcustomers... and workshop, as she manages the planning and control system?• This involves at temp t ing to m aximize the ut i l izat ion of her works hop

resources whi le keeping c ustom ers sat isf ied. Partly, as previously mentioned,

this involves managing customer expectations. But also, in addition, Joanne tries to

build in as much flexibility as possible by getting customers to bring vehicles in as

early as possible and collecting them as late as possible.



Planning and Control• Planning

• A record of what is intended to happen at some

future time; an intention, but not guaranteed

• Control• Addresses the changes in circumstances that

arise during plan implementation

• Control Activities• Adjustments made to get a plan back on track,

in order to achieve the plan objectives



Planning is deciding

Control is

What activities should take place in the

operation?

When they should take place?

What resources should be allocated to

them?

Understanding what is actually happening in

the operation

Deciding whether there is a significant deviation

from what should be happening

(if there is deviation) Changing resources in order

to affect the operation’s activities

Planning and control(Continued)



Operation orprocessInput Output

Compare/

replan

Intervention Plans

A simple model of control

Monitor

Figure 10.15 A simple model of control



Balance between planning and

control activities... (ref pp 290-291)Planning and

Control

Forecast

Information

Focus of

Planning /

Control

Objectives

Resource

Planning and

Management

Contingency

Arrangements

Long term

Medium term

Short term



Balance between planning and

control activities... (ref pp 290-291)Planning

and Control

Forecast

Information

Focus of

Planning /

Control

Objectives

Resource

Planning and

Management

Contingency

Arrangements

Long term Aggregated

demandforecasts

Emphasis is on

planning rather thancontrol. Broad

rather than specific

individual needs

Focus will be on

volume andfinancial targets

Low priority

Medium

term

Partly

disaggregated

demand

forecasting

Increased detail.

Set objectives for

finance and

operations

management

Emphasis is on

specific resource

requirements and

contingency

plans.

Set to manage

minor deviations

from plans –

reserve resources

identified

Short term Fully

disaggregated

forecasts, and

actual demand

figures

Control priority; of

mix of operations

objectives –

balancing quality,

speed, costs etc

Adjust to manage

deviations from

plans

Manage variances

from plan to

achieve required

objectives



PLANNING

CONTROL

The balance between planning and control

T i m e

h o r i z o n

H o u r s / d a y s

D a y s / w e e k

s / m o n t h s

M o n

t h s / y e a r s Long-term planning and control

Uses aggregated demand forecasts

Determines resources in aggregated formObjectives set in largely financial terms.

Medium-term planning and controlUses partially disaggregated demand forecasts

Determines resources and contingencies

Objectives set in both financial and operations

terms.

Short-term planning and controlUses totally disaggregated forecasts or

actual demand

Makes interventions to resources to correct

deviations from plants

Ad hoc consideration of operations objectives.

Figure 10.2 The balance between planning and control activities changes in the long, medium and short term



Application: Air France... (Page 293)

With reference to the example;• Is the planning process described in the case short or

medium term?

• In what ways does the planning address the operations

management performance objectives of;• quality

• speed

• dependability

• flexibility

• cost

• What elements of the process represent planning, and

which incorporate monitoring and control measures?



Volume Variety Customer

responsive-

ness

Planning

horizon

Major

planning

decision

Control

decisions

Robustness

Low High Slow Short Timing Detailed High

High Low Fast Long Volume Aggregated Low

The volume/variety effects of planning

and control

Table 10.1 The volume –variety effects on planning and control



Volume and Variety...:Application issues... (Refer pp 192, 289, 292)

Compare the supermarket and dealership contexts...;

Factor BMW Dealership Tesco Supermarket

Operations

Management

ObjectivesVolume

Variety

Planning

Control



Volume and Variety...:Application issues... (Refer pp 192, 289, 292)

Compare the supermarket and dealership contexts...;Factor BMW Dealership Tesco Supermarket

Operations

management

objectives

Appropriate service provided

promptly. Customers requirements

met and kept informed. Flexibility

level high, speed of service is key.

Store well laid out; goods easy to find,

smooth flow. Maximise revenue per

square metre. Speed; avoiding long

queues. Transaction times

Volume Low daily volume; 40 – 80 jobs Very high daily volume of customers

Variety Wide range of requirements; from

scheduled maintenance to

emergencies, to pre-sale checks

Low variety of service, but a wide range

of product lines

Planning Sophisticated scheduling of

capacity. Multi-skilled staff. Have

loan-cars, to reduce schedule

pressure. Have “standard” times.

Hold inventory of parts

Plan to ensure smooth flow. Layout

planning crucial as is product location

and shelf positioning – impacts sales.

Plan to manage capacity flexibly; to

ensure service speed

Control Monitor against computer based

schedule. Also against standard

job times. Follow-up re-bookings.

Manage customer expectations

Use technology to count units in, to

accurately plan for checkout capacity to

reduce waiting times



Dependent and independent demand

Dependent demand

e.g. input tyre store in automobile plant

Demand for tyres is

governed by the numberof automobiles planned

to be made

For every automobile

that are planned to bemade, five tyres will be

needed



Demand for tyres islargely governed by

random factors

ACE

TYRES

Demand for tyres is governed by

the type of car arriving, the

fluctuations in the number of cars

arriving and how many tyres need

replacing

Dependent and independent demand (Continued)

Independent demand

e.g. tyre fitting service



“Planning and control systems should

distinguish between dependent and

independent demand” (Page 294)

Explain this statement through comparison of

how this concept applies in the contexts of;

• The car manufacturing example provided

• The BMW dealership

• The Tesco supermarket



“Planning and control systems should

distinguish between dependent and

independent demand” (Page 294)Explain this statement through comparison of how this concept applies in

the contexts of;

• The car manufacturing example provided• Demand forecasting for a car manufacturer is relatively straightforward, and

dependant on demand that is known. Throughput daily is predictable and partsvolume can be arranged with certainty; and scheduled accordingly

• The BMW dealership• Operate without certainty about what future demand will be; so subject to

independent demand. Do not have forward visibility of customer orders. Holds

parts in inventory, and manages scheduling to adjust to actual demand

• The Tesco supermarket• Have to cope with fluctuating demand, and due to independent demand, hold

high levels of items in inventory; which is planned and controlled. Can track

patterns and flows so can provide some forward visibility based on historic

trends – best guess... Plan to respond rapidly to fluctuations in demand.



Planning and control will vary;subject to how much work can be done

before demand is known...#1 (pp 295-298)The P:D Ratio• P = The total throughput time to produce the product (or

service)

• D = Length of customer wait, between order and receipt ofproduct

• Undertake a brief analysis, and comparison, of the six

systems and their associated P:D ratios, that are

illustrated in Figure 10.4 on page 296... Relate theexamples to the applicable volume / variety factors...

• Which system best represents...;

• A hotel restaurant operation

• A fast food take-away operation




before demand is known...#1.1 (pp 295-298)• Analyse, and compare, the six systems and their associated P:D

ratios, that are illustrated in Figure 10.4 on page 296... Relate the

examples to the applicable volume / variety factors...

Operation Type Vol / variety Characteristics P:D

Ratio

Example

Design, resource,

create, deliv. to order

Volume: Low

Variety: High

Resources assembled after

design is approved.

V Low

P = D

Construction

project

Design, create, and

deliver to order

Demand confidence; then

hold transforming resources

Website

developer

Create and deliver toorder Standard products createdfollowing customer order House builder;standard designs

Partly create, deliver

to order

Predictable demand so

products created pre-order

Internet retailer;

e.g. Dell

Create to stock Standardised products,

made to stock; delivered

Appliance retailer

Collect from stock Volume: HighVariety: Low

Customers collect their ownproduct or service

V High CBD retailers




before demand is known...#1 (pp 295-298)

The P:D Ratio• P = The total throughput time to produce the product

(or service)

• D = Length of customer wait, between order and

receipt of product

• What is the business implication of a

high P:D ratio?• Why might a low P:D ratio not always

be advantageous?




before demand is known...#1.2 (pp 295-298)The P:D Ratio

• What is the business implication of a high P:D ratio?• Operations with a high P:D ratio will have a high level of

speculation for planning and control activities. Retailershave no certainty before purchasing stock that the

customers will want to purchase

• Why might a low P:D ratio not always be

advantageous?• Much uncertainty is removed, but although volume of work

is known, time is still uncertain – may be many iterations

with customer in order to complete; to secure feedback

and approval



Planning and Control Requirements

• Planning and control requires balancing of supply

and demand for;• Volume

• Timing

• Quality

• This is achieved through activities of• Loading

• Sequencing

• Scheduling

• Monitoring and control

• Approaches include use of techniques such as

formal project management...;



Scheduling Loading

SequencingMonitoringand control

When to

do things?

In what

order to do

things?

How much

to do?

Are activities

going to plan?

The activities of planning and control

Figure 10.6 Planning and control activities



Planning and Control Activities...;

• With reference to pages 299 – 312, briefly note the key

definitions and operations management focus and

priorities for;• Loading – including examples of finite and infinite

• Sequencing – and key approaches to priority setting; and

performance objectives

• Scheduling – and scheduling tools

• Monitoring and control – including the model of control,

“push”, and “pull” control; and the impact of “bottlenecks”

• Then outline the control issues illustrated in Figure 10.18

on page 315, and explain the various options



Planning and Control Activities...#1-1;

• With reference to pages 299 – 312, briefly note definitions

• Loading – Amount of work allocated to work centre; how much is to

be done? Finite – limited; for safety; or to booking schedule. Infinite

– copes with requirement; e.g. A&E, F. food

• Sequencing – The order work is done. May be based on• Physical constraints – mix of work arriving affects priority

• Customer priority – priority given to important customers; or

emergency situations – police, A&E; or complaining customers

• Due date, FIFO, LIFO, LOT, (Longest OT), SOT...(Shortest OT)

• Dependability , speed, and cost are important performance

drivers; meeting a due date; minimising throughput time;

limiting inventory and queues; and limiting cost of down-

time




• Scheduling – When things are to be done... Timetable for start toend of tasks. Volume and timing – as per bus timetables

• Forward scheduling; start as soon as work arrives

• Backward scheduling; start at latest feasible time to meet order

(JIT / Lean / MRP).

• Project planning techniques; Gantt Charts, network diagrams

• Shift and work scheduling – to match capacity with demand

• Monitoring and control – Are activities running to plan? Monitoring

against plan and correcting variances

•

Push system; activities are scheduled centrally, and completedwork is pushed on to the next stage – risk of queues and inventory,

down-time

• Pull system; pace set by the recipient of supplied content, with

demand being communicated back through the system

• Bottleneck = control point; this sets the pace for the system



Pull and push philosophies of

planning and control

Push control...

Work

centre

Work

centre

Work

centre

Work

centre

Instruction on

what to makeand where to

send it

DEMAND

FORECAST

OR

CENTRAL OPS. PLANNING AND CONTROL SYSTEM

P ll d h hil hi f



Pull control...

Workcentre

DEMAND

Pull and push philosophies of

planning and control (Continued)

Workcentre

Workcentre

Workcentre

Request Request Request Request

Delivery Delivery Delivery Delivery



Planning and Control Activities...;

• Then outline the control issues

illustrated in Figure 10.18 on page 315,and explain the various options

C t l i t l ti



Are objectives

unambiguous?

Is process

knowledge

complete?

Is activity

repetitive?

Is activity

repetitive?

Negotiated

control

Intuitive

control

Trial and

error control

Expert

control

Routine

control

Needs

‘political’ skills

Needs

decision skills

Needs knowledge

building skills

Needs networking

skills

Needs systematization

skills

Yes No

No

NoNo

Yes

Yes

Yes

Control is not always routine

Figure 10.18 Control is not always routine; different circumstances require different types of control




• Control issues are illustrated in Figure 10.18 on page 315,

• Difficulty with control based on the response to three questions:

• Clar i ty o f ob ject ives

• Level of process know ledge

• Level of repet i t iveness of act iv i t ies

• Where objectives are clear, effects of interventions in process are

known, and operation is repetitive, then operational control is

stra ight forward and rout ine .

• In situations without routine control, the control may be;

• Expert – acquiring, and then integrating expertise internally

• Trial and erro r – learning control through experience

• Intui t ive – objectives clear; based on judgement and insight

• Negotiated – objectives unclear; consensus - power structure



Application:Planning and control at OpCo...#1;

With reference to Akroyd and Maguire, “The roles ofmanagement control in a product development setting” ,

prepare notes for discussion of the following with regard

to the OpCo case study:

• Outline the business focus and structure of OpCo, and• The approach taken by the authors to research the issue of

management control in this context

• Note definitions for;

• “Practice theory”?

• “Ethnomethods”?

• “Communities of practice”? How many COP’s are identified at

OpCo, and what are the characteristics of these groups?



Design Stages in NPD...;Objectives, and focus for each stage...

1 • Concept generation...;

2

• Concept screening...;

3 • Preliminary design / planning...;

4 • Evaluation – testing / improvement...;

5 • Prototyping and final design...;




With reference to Akroyd and Maguire, prepare notes fordiscussion of the following, regarding the OpCo case study:• Outline the apparent dynamic that exists between...;

• Creativity in NPD

•

Control• Cost implications

• Management control (MC) is identified as being the process used

by managers to ensure efficient and effective use of resources for

achieving an organisations objectives...

• What other advantages of MC are identified?

• Why is “goal-congruence “important”?

• Explain the importance and role of input, process and output

controls in the OpCo context

•

Contrast incremental and radical NPD as applicable to OpCo




With reference to Akroyd and Maguire, prepare notes for

discussion of the following, regarding the OpCo case study:• OpCo has 5 stages and 4 gates in the NPD process

Assess the focus and importance of the key planning and control

processes that are applicable during the...;• First half of NPD: idea generation to project screen gate, and;

• Second half: feasibility to product launch

• Evaluate the effectiveness of OpCo’s processes for securing

• Goal congruence• Management control – input; process; output

• Risk management



QUALITY MANAGEMENT

Planning and Control



Direct

Design Develop

Deliver

Operationsmanagement

Quality

management

Quality

management

The operation supplies...the consistent delivery of

products and services atspecification or above

The market requires…consistent quality of

products and services

Figure 17.1 This chapter covers quality management



Quality Management:

Consider in your groups, note and prepare toreport as follows...:

• When you purchase a service, such as a meal at

a restaurant, how do you judge the quality of the

experience?• In what ways is your judgement different if you

compare your experience at an upscale restaurant

with that at a fast food outlet?

• What factors may you judge quality by when

purchasing a tangible product? What about...• A new cell phone?

• A replacement washing machine?



Quality characteristics of goods and services

Functionality – how well the product or service does the

job for which it was intended.

Appearance – aesthetic appeal, look, feel, sound and

smell of the product or service.

Reliability – consistency of product or services

performance over time.

Durability – the total useful life of the product or service.

Recovery – the ease with which problems with

the product or service can be rectified or resolved.

Contact – the nature of the person-to-person

contacts that take place.



In Chapter 17 – Quali ty management – Slack et al.

ident i fy the fol lowing key quest ions …

What is quality and why is it so important?

How can quality problems be diagnosed?

What steps lead towards conformance to specification?

What is total quality management (TQM)?

Key operations questions:



Quality & Competitive Advantage

With reference to Slack et al., pages 534 – 539...;

• Note the potential impact of quality improvements on

revenues and costs...

• What is an operations management view of “quality”?

• Why are the following terms relevant to quality...;

• Customer expectations?

• Conformance to specifications?



Quality & Competitive Advantage...1-A


Note the potential impact of quality improvements on revenues and costs...

Increased Revenue Reduced Costs

Faster response time Faster response time

Improved brand recognition Fewer errors

Increased customer service Less re-work

Increased volume of sales Lower customer compensation

Reduced price competition Increased productivity

Increased revenues Lower costs

Improved profitability



Customers’expectations

for theproduct or

service

Customers’perceptions

of the

product orservice

Gap

Expectations > perceptions Expectations =perceptions

Expectations <perceptions

Perceived quality is governed by the gap between

customers’ expectations and their perceptions of

the product or service

Gap

Perceived quality ispoor

Perceived quality isgood

Perceived quality isacceptable


for theproduct or

service


of theproduct or

service


for the

product orservice


of theproduct or

service

Figure 17.3 Perceived quality is governed by the magnitude and direction of the gap between customers’

expectations and their perceptions of the service or product



Quality & Competitive Advantage...2-A


• What is an operations management view of “quality”?

“Consistent conformance to customers expectations”

May be considered as the degree-of-fit between customer

expectations and customer perceptions of the product or service• Poor qual i ty; percept ion s fal l below expectat ions

• Good qual i ty; percept ions are above expectat ions

• Why are the following terms relevant to quality...;

• Customer expectations – Service or product must be

produced by taking the views & expectations of customers

into account; and quality for a customer is whatever the

customer perceives it to be

• Conformance to specifications – quality requirements are

built into processes used to produce the goods or services



Quality Expectations;and the Four Seasons Canary Wharf #1

With reference to Slack et al., pages 535, 536...;

Read the case-study and note responses to the

following...

1. The company has what it calls its Golden Rule;‘Do to others (guests and staff) as you would wish

others to do to you’. Why is this important in

ensuring high-quality service?

2. What do you think the hotel’s guests expect fromtheir stay?

3. How do staffs using their own initiative contribute to

quality?



Quality Expectations;Four Seasons Canary Wharf...#1-A1

Case-study

1. The company has what it calls its Golden Rule; ‘Do to others (guests

and staff) as you would wish others to do to you’. Why is this

important in ensuring high-quality service?

‘It may be a simple rule, but it guides the whole organization’sapproach to quality’ as the hotel manager says. The golden rule

means treating guests with courtesy and intelligence. It also means

that treating employees with humanity and respect encourages

them to be equally sensitive to the needs and expectations of

guests. It will also encourage a culture of caring. Certainly, it wouldbe difficult to treat guests appropriately if, behind the scenes, there

was constant friction and conflict.

Slack et al., pages 535, 536,




Case-study

2. What do you think the hotel’s guests expect from their stay?

When guests come to a Four Seasons Hotel they need to have the

assurance that they are going to get exceptional food, great service,

anything they need from the 24 hour concierge service. Mostimportantly they will want the basics of the service to be faultless.

This means a great night’s sleep with no administrative errors or

failures. Hotels in this category are not trading in service quality

gimmicks. They focus on giving what they call ‘the exceptional

basics’.So they listen very carefully to their guests, give a lot of thought to their

needs, and provide what they really need.





Case-study

3. How do staffs using their own initiative contribute to quality?

Four Seasons understand that there is nothing more important than

their staff in achieving such high-quality of service. The culture of

the organization encourages creativity, initiative and attitude. (Themost important of these is att i tude . You can teach people the

technical skills of the job but it is the attitude of our staff that sets

them apart from any other hotel chains.).


A ‘Gap’ model of quality



The operation’s domain

Management’sconcept of the

product or service

Thecustomer’s

domain

Previous

Experience

Word-of-mouthcommunications

Image of productor service

Customer’s own

specification ofquality

Organization’sspecification of

quality

The actual productor serviceGap 1

Gap 2 Gap 3

Gap 4

A Gap model of quality

Customer’sexpectationsconcerning a

product or service

Customer’sperceptions

concerning theproduct or service

Gap?

Figure 17.4 The customer’s domain and the operations domain in determining the perceived quality,

showing how the gap between customers’ expectations and their perception of a service or product could

be explained by one or more gaps elsewhere in the modelSource : Adapted from Parasuraman, A. etal . (1985) A Conceptual Model of Service Quality and Implications for Future Research, Journal of Marketing , vol. 49, Fall.

Th ti t ti



The perception –expectation gap

Gap

Action required to ensure high

perceived quality

Main organizational

responsibility

Gap 3 OperationsEnsure actual product or service

conforms to internally specified

quality level

Gap 4 MarketingEnsure that promises made to

customers concerning the

product or service can really be

delivered

Gap 1Ensure consistency between

internal quality specification and

the expectations of customers

Marketing, operations,

product/service

development

Gap 2Ensure internal specificationmeets its intended concept of

design

Marketing, operations,product/service

development



Quality Expectations;and the Four Seasons Canary Wharf #2

With reference to Slack et al., pages 535, 536, 538, 539...;

Read the case-study and review the “Perceived Quality” information

• On what basis is the business rated as, “Top hotel chain”?

• What does the company do to minimise or avoid the following potential

expectation and perception gaps?

• Organisation specification of quality vs.: The actual service

• Management’s service concept vs.: Organisation quality specification

• Customer quality specification vs.: Organisation quality specification

• Service image vs.: The actual service




Case-study, and the “Perceived Quality” information...;

• On what basis is the business rated as, “Top hotel chain?

Many awards, and one of Fortunes “100 best companies to work for”

• What does the company do to minimise or avoid the following potential

expectation and perception gaps?• Organisation specification of quality vs.: The actual service

Have developed consistent operating standards; empowered

employees to deliver personalised and high quality service; treat staff

well, customers in turn are then well treated (Gap 3)

• Management’s service concept vs.: Organisation quality specificationCareful staff selection. Aim is for service oriented motivated, happy

and well trained employees; company runs career development and

training programmes in-house in dedicated facilities. (Gap 2)

Slack et al., pages 535, 536, 538, 539...;




Case-study, and the “Perceived Quality” information...;

• Customer quality specification vs.: Organisation quality specification

Aim is to exceed customer expectations... Maintain customer

database to record all feedback; analyse to identify service gaps;maintain a record of guest history (Gap 1)

• Service image vs.: The actual service

Quality service image provides the business with competitive

advantage. Business uses database records to provide individualisedattention to guests; based on previous preferences and feedback

comments. Focus is on providing exceptional service resulting in

repeat business (Gap 4)

Slack et al., pages 535, 536, 538, 539 (Figure 17.4)...



Customer Quality Expectations;Operations Management Responsibilities #1

• Four Seasons Canary Wharf provides an example of a

business responding to “customer perceived quality”...;• Managing the potential gap: expectations vs. perceptions of service

• Managing customer perceived quality;• Requires operations managers to take responsibility for designing a

service (or product)..., and then specifying it’s quality...

• Customer expectations may be determined by;

•

Previous experiences with the service – in this case at the FourSeasons Hotel

• The organisation’s marketing strategy

• What others who have experienced the service are saying



Customer Quality Expectations;Operations Management Responsibilities #2

• Potential expectation and perception gaps..:• Gap 1: Customer specification vs. Operations specification

• Mismatch between internal quality, and customer specifications

• Gap 2: Concept vs. Specification

• Mismatch between P/S concept, and the specification of quality• Gap 3: Quality specification vs. Actual quality

• Mismatch between specification of quality, and actual quality of P/S

• Gap 4: Actual quality vs. Communicated image

• Mismatch between marketing communication & actual delivery

• Consider these mismatch scenarios, and then develop an example

for each perception gap, in the context of;• Purchase of a new laptop computer

• Purchase of a restaurant meal



Customer Quality Expectations;Operations Management Responsibilities #2-2

(Slack et al., pages 540 - 541...)

Perceived Quality Gap Computer Purchase Restaurant Meal

Gap 1: Customerspecification vs.

Operations specification

Gap 2: Concept vs.

Specification

Gap 3: Quality

specification vs. Actual

quality

Gap 4: Actual quality vs.

Communicated image



Customer Quality Expectations;Operations Management Responsibilities #2-2A

(Slack et al., pages 540 - 541...)

Perceived Quality Gap Computer Purchase Restaurant Meal

Gap 1: Customer

specification vs. Operationsspecification

Expectations about level of

functionality – memory sizefor example

Customer may have been

expecting a certain type offood – but it’s not on the menu

Gap 2: Concept vs.

Specification

The computer concept is for

high levels of connectivity, but

it’s really only average

The owner intends to offer an

upbeat efficient service; but

staff are slow, and low key

Gap 3: Quality specificationvs. Actual quality

The battery is supposed togive power for five hours, but

runs out in four

The meal received does notmatch menu specification; thin

rather than creamy soup

Gap 4: Actual quality vs.

Communicated image

A rather dull machine; not the

status building, ego improving

device hoped for

Service was opposite to the

fast, efficient, friendly service

advertised on the website



Conformance to Specification;Four Seasons Canary Wharf #2

With reference to Slack et al., pages 535, 536, 541 - 548...:

Review the case-study and read the “Achieving Conformance to

Specification” information in the text...;

• Explain and provide examples for how the hotel is achieving theconformance to specification steps;i. Defining service quality characteristics

ii. Measuring quality characteristics

iii. Setting quality standards for each characteristic

iv. Controlling quality against the identified standards

v. Finding and correcting causes of poor quality

vi. Making continuous improvements



Conformance to Specification;Four Seasons Canary Wharf #2-A

Application of “Achieving Conformance to Specification”...;• How is the hotel is achieving the conformance to specification “steps”;

i. Defining service quality characteristics – Guiding principle, to make service

quality a competitive advantage. Seek new ways to better serve customers.

ii. Measuring quality characteristics – Have developed and documented

standards for all service operations; and then closely monitor customer

perceptions of delivery of these

iii. Setting quality standards for each characteristic – Employees encouraged

to ensure good service against standards, and use judgement, creativity.

iv. Controlling quality against the identified standards - Individual customer

responses are recorded, reviewed, tracked and acted on. Aim to exceed

expectations of hotel guestsv. Finding and correcting causes of poor quality – Constantly seeking service

gaps in order to remedy these

vi. Making continuous improvements – Depend on staff, so recruit with care

and provide training and career development. Develop quality culture.

(Slack et al., pages 535, 536, 541-548)



Quality Expectations;Four Seasons Canary Wharf #3

With reference to Slack et al., pages 535, 536, & 541 - 544...;

Read the case-study & review information on quality characteristics

• Then for the Four Seasons Hotel, complete the following table:

Quality

Characteristic

Hotel Customer

Transformation

Variable Attribute

Functionality

Appearance

Reliability

Durability

Recovery

Contact



Quality Expectations;Four Seasons Canary Wharf #3-A

Quality

Characteristic

Hotel customer

transformation

Variable Attribute

Functionality – how well

service performed

Efficiency of check-in;

suitable room; meals

Time taken to check in

and access room

Staff were attentive

and knowledgeable

Appearance – appeal,

look, feel, characteristics

Decor & presentation

of facilities. Ambience

Time taken to make-

up rooms

Rooms attractively

presented

Reliability – service

performance over time

Room availability;

consistent services

Number of times room

unavailable when

requested

Feedback data

consistently positive

Durability – useful life of

the service

Service reflects

current trends

Number of repeat

bookings

Brand loyalty

Recovery – ease of

problem resolution

Problems and issues

resolved effectively

Number of complaints

identified/resolved

Staff provided

efficient assistance

Contact – nature of

person to person contact

High levels of

personalised and

attentive service

Number of guest

feedback cards

analysed

Staff were polite



Variablesthings you can measure

Attributesthings you can assess

accept/reject

Quality

fitness for purpose

Reliability

ability to continue

working at accepted

quality level

Quality

Quality of Design

degree to which

design achieves purpose

Quality of Conformance

faithfulness with which the

operation agrees with design

Total quality management



What does total quality management include?

Total quality management

Includes all parts of the organization

Includes all staff of the organization

Includes consideration of all costs

Includes every opportunity to get things right

Includes all the systems that affect quality

And it never stops!

Total quality management is a natural extension of



earlier approaches to quality management

Quality is strategic

Teamwork

Staff empowerment

Involves customers and suppliers

Quality systems

Quality costing

Problem solving

Quality planningStatistics

Process analysis

Quality standards

Error detection

Rectification

Prevents ‘out of

specification’ products and

services reaching market

Solves the root

cause of quality

problems

Broadens the

organizational

responsibility for quality

Makes qualitycentral and strategic

in the organization

InspectionQuality

control

Quality

assurance

Total quality

management

Figure 17.7 TQM as an extension



Total Quality Management (TQM) #2

With reference to Slack et al., page 548...;• Note the main objectives of Total Quality Management

• Integration of quality development, maintenance and

improvement in an organisation; putting “quality” at the

centre of all processes• TQM stresses the following;

• Meeting customer needs and expectations

• Application to all parts of the operation

• Inclusion of everyone in the organisation• Examination all costs relating to quality, and quality failure

• Systems and processes that support quality and improvement

• Continuous improvement



Achieving Your Objectives…#1

Assume for the purpose of TQM discussion, that your

group has purchased a small business (café-bar / light

manufacturing), that you intend to operate and

develop over the next three years. Due to his financial

difficulties the previous owner has sold the business toyou at an attractive price; and you now have the lease

of a facility, equipment, four full-time staff, and five part

time casual employees.

Before long you begin to understand the reason for thelow price – you encounter many problems of poor and

uneven quality. The business operates at the

“Inspection” stage



Achieving Your Objectives…#2

Assume for the purpose of TQM discussion, that your

group has purchased a small business (café-bar / light

manufacturing)… Discuss and prepare to report as

follows:

• Develop a strategy to improve quality in the operation

over the next 1 – 2 years

• What will you do, and how will you go about

achieving progression from…;

• Inspection to quality control

• Quality control to quality assurance

• Quality assurance to TQM?





With reference to Slack et al., page 548 - 549...;

• Assess and rate the application of this approach as applicable

to the following examples;• Penang Mutiara (page 64)

• Four Seasons Canary Wharf (page 535)

• Long Ridge Gliding Club (page 91)

• Service Adhesives (page 274)

• Locate each operation against the criteria included in the rating

scales on the next slide...;

• Then for each organisation, indicate whether you consider them

to be at the stage of;• Inspection

• Quality control

• Quality assurance

• Total quality management

TQM and Case-study Examples ;



TQM, and Case study Examples...;

High LowMeeting customer needs and expectations

High Low Application to all parts of the operation

High LowInclusion of everyone in the organisation

High LowExamination all costs relating to quality

High LowSystems and processes that support quality

High LowContinuous improvement



Total Quality Management (TQM) #3-A

Objectives of Total Quality Management• Integration of quality development, maintenance and

improvement in an organisation; putting “quality” at the

centre of all processes

(Slack et al., page 548...)

• Assess and rate the application of the TQM approach as

applicable to the following examples;• Four Seasons Canary Wharf - TQM

• Long Ridge Gliding Club - Inspect ion

• Service Adhesives – Qual i ty contro l

• Ocado online supermarket – Quality assurance / TQM?



TQM Quality Costs...#1;With reference to Slack et al., pages 535-536; 551-552; 274-276...;

• Note examples of the four main categories of quality costs, asapplicable to the following service and manufacturing examples

Quality cost category Four Seasons Hotel Service Adhesives

Prevention costs –

prevention of errors andfailures

Appraisal costs –

identifying errors during

production, delivery

Internal failure costs –dealing with cost of

internal errors

External failure costs –

error going from the

operation to the customer



TQM Quality Costs...#1-A;

With reference to Slack et al., pages 535-536; 551-552; 274-276...;

• Note examples of the four main categories of quality costs, as

applicable to the following service and manufacturing examples

Quality cost category Four Seasons Hotel Service Adhesives

Prevention costs –

prevention of errors andfailures

Service design and

specifications. Costs ofrecruitment, training

Product and process design.

Training and supervising staff.Statistical process control

Appraisal costs –

identifying errors during

production, delivery

Staff time attending to monitoring

and adjusting service delivery.

Collecting, analysing feedback

Sampling of outputs for

conformance to specifications.

Analysing test data

Internal failure costs –dealing with cost of

internal errors

Costs associated with re-work, orerrors in service delivery

Rework - wasted materials . Losttime fixing processing errors or

problems. Repair costs

External failure costs –

error going from the

operation to the customer

Costs associated with managing

customer complaints; public

relations costs

Costs of re-work, costs of

remedying mistakes. Time lost

resolving complaints



TQM Quality Costs...#2

With reference to Slack et al., pages 552-553

• Using the information on these pages for

guidance,• Explain the trends and the differences illustrated in

Figure 17.8 (a), and 17.8 (b);

• ...and then account for the differences between the

two views of costs, effort, and errors; with reference

to the TQM opinion of traditional costing logic...

• Compare the traditional quality approach with theTQM approach

• How does TQM address and reduce the costs of

appraisal, and internal/external failure?



TQM Quality Costs...#2-A

With reference to Slack et al., pages 552-553• Explain the trends and the differences illustrated in Figure 17.8 (a), and

17.8 (b); - Optimal quality effort – and diminishing returns as costs will

exceed benefits, vs. TQM approach; that errors are not inevitable

• ...and then account for the differences between the two views of costs,

effort, and errors; with reference to the TQM opinion of traditionalcosting logic... TQM: Failure is unacceptable; costs of quality are hard to

measure are often not accounted for; if quality is part of everyone’s

work, don’t need inspection processes: – therefore there is not an

optimum level of quality costing...

• Compare the traditional quality approach with the TQM approachTraditional – reactive; TQM, is proactive

• How does TQM address and reduce the costs of appraisal, and

internal/external failure?

Error prevention reduces these costs – prevention costs increase, for

training, but overall quality costs are reduced

Supporting



pp g

Quality &

Improvement...#1

S ti Q lit & I t #2



Supporting Quality & Improvement...#2

Supporting Quality &



Supporting Quality &

Improvement...#3

With reference to Slack et al., pages 554-555• Outline the origins and also the key objectives of the

ISO9000 approach

• If you are going to use this methodology to improve

quality for the cafe-bar scenario that was discussed at thelast session; what will implementation of ISO 9001...;• Require in terms of information?

• Require you to develop operationally?

• Require of you as a manager?

• What advantages may the ISO approach have?

• Drawbacks or criticisms?

Supporting Quality:



Supporting Quality:

Lean Synchronisation

Consider “Lean”; Slack et al., pages 464 - 467...;• Key elements of the approach, and advantages for

operations and quality management?

• Compare the traditional with the lean processes, (Figure

15.2); and assess the advantages and disadvantages...

• Explain the contrasting approaches to efficiency

between traditional and lean systems – what changes

occur to the “motivation structure”?

• Explain the linkages between the interrelated ideas in

Figure 15.3 and text, on page 467

• Inventory provides a “blanket of obscurity...”. How?

5.0 htm 209 – om delivery planning and control 111114

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