ORM Presentation - Final
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Group 4B
Bibek Samantaray (B10075)
Parag Jain (B10094)
Pinaki Majumdar (B10095)
Smriti Mehrotra (B10111)V S Rama Krishna Chava (B10116)
A STUDY OF OPERATIONSMANAGEMENT IN HOTEL JK
RESIDENCY
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Hotel Industry in India Tremendous boom in recent years due to thriving
economy and increased business opportunities
Supply of 110000 rooms and shortage of 150000rooms currently
Demand to exceed supply by 100% in next 2years
Hotel rates in India to rise by 25%
Occupancy of hotels to rise by 80% 60000 rooms in planning and development
stages
Huge growth expected in budget and mid-market
hotel segment
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JK Residency Located in Sakchi, Jamshedpur
Started around 5 months back
37 elegantly furnished rooms
Tariff range: Rs 2000 Rs 6000 Restaurant (Appetite) that can seat 120 people
Conference Hall (Concurrence) 60 peoplecapacity
Rooftop Banquet (Steelscapes) 200 peoplecapacity
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Service Process Matrix
HOTELS
The Service Process Matrix is a classification matrix ofservice industry firms based on the characteristics ofthe individual firm's service processes
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Managerial Challenges ServiceFactory
Low labor intense firms Infrastructure choices are extremely important
Inflexible capacity
Scheduling service delivery is more important
Low customer interaction firms Relatively more marketing challenges
Attention to physical surroundings required to keeptrack of constantly evolving industry standards
SOPs can be used Organizational structure with many layers and a
rigid relationship between layers is appropriate
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Residency
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Organization Structure
Total no. of employees : 120Total no. of Administrative staff : 25
Heads:
General Manager: Mr. Saikat Chatterjee
Food & Beverage Production (Head): Mr. RanjitSharma
Food & Beverage (Head): Mr. Hemant Gupta
Room Division (Head): Mr. Saikat Chatterjee
Housekeeping Department(Head): Mr. Paramjit Singh
Finance & Accounts (Head): Mr. Barwa, Mr. Chinmaya Safety and Security (Head): Mr. Lakhanpal
Front Office (Lead): Mr. Niranjan Baid
Maintenance (Head): Mr Anurag Jain
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Core functioning departments (1/3)
Food & Beverage Department Responsible for food and beverage services to the
guests
Second largest revenue generator for the hotel
Separate sub-departments for restaurant, banquets,room service etc.
Food & Beverage Production Department
Responsible for preparation of food items.Dish Type Process Type
Indian Dish Assemble to Order
Chinese Dish Made to Order
Continental Dish Made to Order
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Core functioning departments (2/3)
Front office department Most important department of the hotel
Largest revenue generator
Responsible for processing guest reservations,
registering incoming guests, settling guestaccounts, checking out guests etc.
Housekeeping Department
Responsible for cleanliness of guest rooms andpublic areas
Employs maximum number of people
Safety & Security Department
Responsible for security of the Hotels guests and
employees
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Core functioning departments (2/3)
Finance & Accounting Department Responsible for accounting work
Responsible for managing required finances for dayto day operations
Cost control
Maintenance Department
Responsible for maintaining exterior and interiorfacilities of the hotel
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Forecasting Major business operations revolve around
forecasting right amount of occupancy
Manpower planning and food preparation in therestaurant is based on forecasts ofRoom/Restaurant/Conference Hall/Banquet Hall
occupancy
Demand Management
JK Residency follows Active Demand Management
Discounts to students (for e.g.: XLRI students)
Organizing special functions on festival days
Attractive discounts on bookings of conference hall/banquethall
Maintaining a superior quality of service and food
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Basic components of forecasting -Hotel
Raw material forecast for the kitchen Affected by
Room occupancy
Banquet Hall/Conference Hall bookings
Restaurant traffic
Linen forecast
Affected by
Number of rooms
Room occupancy Laundry service quality
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Forecasting methodology at JKResidency
Qualitative forecasting employed Historical Analogy
Seasonality Factor Analysis Past 5 month data
Month Actual Sales(Rs lakhs)
Average Sales
(Rs lakhs)Seasonality
factorNovember 5 5.65 0.885December 5.4 5.65 0.956January 5.75 5.65 1.018February 6.2 5.65 1.097March(Projected
)5.9* 5.65 1.044
Total sales 28.25 28.25
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Seasonality Factor
y = 0.046x + 0.8619
R = 0.786
0
0.2
0.4
0.6
0.8
1
1.2
0 1 2 3 4 5 6
SeasonalityFactor
Months
Seasonality factor
Seasonality factor
Linear (Seasonalityfactor)
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Inventory Control (1/2) Linen Inventory
Bed sheets, blankets and drapes are unique toeach room
Absolutely necessary to maintain a minimum
inventory of these items Fixed Order Quantity model employed
Grocery Inventory
Agreement with private contractors
Price of the items fixed Contract renewedannually
Fixed Order Quantity model employed - order ismade when the grocery inventory reaches a
minimum threshold
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Inventory Control (2/2) Beverage Inventory
Procured through a local distributor
Fixed Order Quantity model is employed
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Manpower Planning
Months November December January February
Days 25 27 26 24
Full time employees 100 120 122 130
Full time days 2500 3240 3172 3120
Salary expense of full time workers 400000 480000 488000 520000
Number of special occasions 5 9 10 12
Expense on contract workers(per day) 250 250 250 250
Contract Workers 35 63 70 84
Salary expense of contract workers 8750 15750 17500 21000
# Full time employee salary is Rs.4000 pm# No. of contract workers required per special occasion is
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Materials Requirement Planning (1/5)
Final Output Food produced in the restaurantkitchen
Rough estimate of daily requirement of raw materialsprovided below
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Materials Requirement Planning (2/5)
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Materials Requirement Planning (3/5)
Based on raw material data, a sample materialrequirements planning schedule was created
Non-Vegetarian
ItemDaily Order
Quantity*Special Order
QuantityLead Time
Chicken 4 kg 21 kg 1 dayMutton 2 kg 8 kg 1 daySea Food 1 kg 3 kg 2 days* Special Order Quantity refers to the occasions when both of theirBanquet halls are occupied (as seen earlier one has a capacity of200 people & another of 60 people)
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Day 1 Day 2 Day 3 Day 4 Day 5 Day 6Chicken Gross requirement 4 4 4 4 4 21LT = 1 day Scheduled receipts 4Order quantity = lot-for-lot Projected available balance
Net requirements 0 4 4 4 4 21Planned order receipts 0 4 4 4 4 21Planned order releases 4 4 4 4 21 4
Mutton Gross requirement 2 2 2 2 2 8LT = 1 day Scheduled receipts 2Order quantity = lot-for-lot Projected available balance
Net requirements 0 2 2 2 2 8Planned order receipts 0 2 2 2 2 8Planned order releases 2 2 2 2 8 2
Sea food Gross requirement 1 1 1 1 1 3LT = 2 days Scheduled receipts 1 1Order quantity = lot-for-lot Projected available balance
Net requirements 0 0 1 1 1 3Planned order receipts 0 0 1 1 1 3Planned order releases 1 1 1 3 1 1
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Materials Requirement Planning (5/5)
Industry Type Expected benefits
Assemble to stock High
Fabricate to stock Low
Assemble to Order High
Fabricate to Order LowManufacture to Order High
Industry Applications & Expected Benefits
The Restaurant business is basically Assemble toOrder in nature, hence the benefits from MRP ascan be seen from the following table are HIGH
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Raw Material Security (1/2) Most of the raw materials locally procured Sea food and Dry fruits procured from other cities
through intermediaries
Assured & continuous flow of raw material isrequired as inventory cannot be maintained dueto the perishable nature of raw materials
Raw Material Procurement Method followed:
Fixed Period Contracts Provides Raw material security
Provides insulation from price changes over thetime period
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Raw Material Security (2/2)
Raw Material Type Period of Contract Other Salientfeatures
Contract
selectionVegetables Monthly Price Fixed at the
start of the monthLowest Bid
selectedNon-Vegetarian
itemsMonthly Price Fixed at the
start of the monthLowest Bid
selectedGrocery Yearly Price Fixed at start of
the year, Mid-year
price review also
done
Lowest Bid
selected, also
Parties allowing
Mid-year price
review given
preferenceBeverages Yearly Price Fixed at start of
the yearLowest Bid
Selected
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Quality Management Customer satisfaction key priority Restaurant
Inspection of raw materials for quality
Quality ingredients used for preparing dishes
Inspection of dishes before serving to customers Rooms
Cleanliness of rooms ensured
Clean linen used
Perfect room service Overall hygiene is given very high importance
Customer feedback on Quality solicited & utilized
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Suggestions :Standard processes formaintaining quality(1/2)
ISO 22000 Standard on issues related to food safety It consists of:
Interactive communication system management
Pre-requisite programs HACCP
Hazard Analysis Critical Control Point (HACCP) Systematic preventive approach to food &
pharmaceutical safety Addresses physical and biological hazards by tackling
them through prevention techniques rather thaninspection
To reduce/eliminate the risk of hazards before they arerealized
Used at all stages of food production and preparation
processes including packaging & distribution
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Suggestions :Standard processes formaintaining quality(2/2)
Seven Principles of HACCP Conduct a hazard analysis
Identify critical control points
Establish critical limits for each critical control point
Establish critical control point monitoringrequirements
Establish corrective actions
Establish record keeping procedures
Establish procedures for ensuring the HACCPsystem is working as intended
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A study on day to day operations
Check-in and Check-out processCheck-in 5 10 15 20 25 60
Personal Information & Security
Deposit collection
Luggage Check-in into the room
Room service
Check-out
Resolving outstanding guest
account balances.
Updating room statusinformation.
Creating guest history records.
Feedback
Housekeeping activities
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Day to day operations
Housekeeping Responsibility of the housekeeping is to provide
with clean rooms
JK Residency runs a good practice of distributinga room cleanliness rating card
Some issues noticed:
In some rooms, glass windows at both wall sides
where curtains cover over are not well dusted andcleaned
Lack of proper inspection
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Day to day operations Outsourcing of laundry
Advantages - Convenience and low cost
Disadvantages Checking laundry quality is not possible
Hotel staff cannot spend time in checking every item Random checks may not give a proper picture
Defects occur during cleaning process or transportationwhich will not be under the control of hotel
Damaged items cannot be fixed and are very costly to
replace
To avoid these issues, JK Residency adopted anin-house laundry system
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Day to day operations
Laundry Inventory Controlling items such as bedspreads, curtains
Inefficient supervision leads to extra costs
Loss and damage to be recorded immediately
Use, Balance and Supply levels form criticalcontrol information to ensure availability whenneeded
JK Residency keeps 3 times the number actually
required Set 1 - Used in the room
Set 2 Laundry
Set 3 - Spare
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Day to day operations - Maintenance
Furniture care and maintenance: Interior furniture has a significant impact on the
guests perceptions of the hotel
Preventive maintenance is essential andinstructions on wooden items, glass ware should bestrictly practiced
Laminated tops are an essential element of mostinstitutional furniture - spilled drinks and beveragerings would quickly mar the finish
Furniture might get damaged while vacuuming thefloor
Electrical Maintenance Regular check-ups of lighting and other electrical
equipment in the guest rooms Plumbin Maintenance
Fi i d fi
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Fire equipment and fire
procedures
Following equipment are installed Emergency lighting system
Automatic fire alarm system,
Complete automatic sprinklers
Room smoke detector
Exit signs and external escape stairs
Access to fire equipment stations are kept clearand available at all times.
Regular inspection of the equipment conducted toensure that all are in working condition
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Fire drills and procedures
Fire safety information and emergencyinstructions, emergency contact numbers areprovided in guest rooms
Floor diagram and assembly exits are clearly
guided
Fire drills for all staff are conducted in the hotelregularly
Staff are given clear instructions aboutappropriate use of fire extinguishers to differenttypes of fire
Issues noticed:
Portable fire extinguishers in between guest rooms
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Security
A separate security section Surveillance cameras, intercoms, public address
system installed
24x7 manned control room
Regular training sessions conducted for securitypersonnel
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Suggestions(1/3)
Performance Management System- BalanceScorecard
Best way to improve service quality is to instituteperformance management systems
Implementation of Balance Score Card strategicperformance management tool
Helps to gauge the efficiency the hotel from both
the owner's and manager's viewpoints Financial parameters
Customer perspective related Measures
Internal Business Process related Measures
Learning and Growth related Measures
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Suggestions(2/3)
Implementing Proper Yield ManagementSystems
Yield management - Process of allocating theright type of capacity to right type of customer at
the right price and time to maximize revenue oryield
PRICEFIXED VARIABLE
DURATION
PREDICTABLE Quadrant 1:Movies,
Stadium/Arenas,Convention
Centres
Quadrant 2:
Hotels,
Airlines,Rental cars,
Cruise linesUNPREDICTABL
EQuadrant 3:
Restaurants, Golf
courses
Quadrant 4:
Continuing
carehospitals
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Suggestions(3/3)
Implementing Proper Yield ManagementSystems
Restaurant business falls in the 3rd quadrant
Improvising the business by controlling durationof indeterminate time to determinate time.
Example - Following a fix time reservationplanning - It will ensure that the reservations are
not blocking our manpower & capacity beyond atime.
Yield from such an investment in capacity will beenhanced
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THANK YOU