Operations Management Report

This report analyzes the operations management strategies employed by Podium Restaurant, a part of Hilton Hotel. It covers key areas such as inventory management, key operations, points of failure, and the lean approach to enhance service delivery. The findings emphasize the importance of effective management practices in achieving customer satisfaction and operational efficiency.

Operations Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK ..............................................................................................................................................3
1. Inventory management.............................................................................................................3
2. Key operations.........................................................................................................................4
3. Points of failure........................................................................................................................6
4. Lean approach..........................................................................................................................8
5. Findings....................................................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
Business operations are basically functions that are used for transforming inputs that is
resources into valuable outputs and products. Companies belonging to any industry be it service
or manufacturing has to adapt particular management strategies so that business objectives are
met easily. This report is based on operations management in a service and production industry.
Podium restaurant is a service system of Hilton Hotel that gives consumers best in class food and
services with banqueting facilities. The key operations and organisation's delivery system shall
be described in this assessment. A brief description of lean approach in production systems will
be given to create a better understanding about functioning of operations.
TASK
1. Inventory management
Restaurant is a production system that involves serving customers their desired food
items and beverages. Business objective or goal of achieving maximum customer satisfaction
can only be achieved when inventory and asset management techniques are efficiently managed
and applied (Slack, 2015). Podium restaurant has been experiencing increasing number of
customers and stakeholders after effective implementation of strategies. A systematic approach is
required to manage supply and demand in this industry. Forecasting, valuation, quality
management, asset handling, etc. are some operations which are classified in this category
(Zurich, 2016).
Podium restaurant being connected with Hilton hotel has a separate division where all its
supplies and raw materials are gathered. The basic purpose behind employing inventory and
asset management is to provide right commodity at right price and at right place. It can only
happen when things are organised and handled with extreme care and attention. Batch or lot
tracking is the first step in this production system administration (Krajewski, Ritzman and
Malhotra, 2013). The stock that is acquired in the restaurant is categorised according to their
attributes and amounts. Once this distribution is complete, a record system is generated that
looks after quantities of generated stock. This operation is necessary because employees will use
these items in producing dishes and beverages according to customer demands.
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Podium has just in time inventory management approach. It helps in reducing warehouse
space and costs for purchasing excess commodities. Managers take responsibility of identifying
need and then fulfilling them according to demand of time. Orders or demands of customers also
plays a significant role in arranging inventories and supplies (Karlsson, 2016). The company
uses a software which is specialised for handling these operations without creating
inconvenience for staff and employees.
Assets are the elements that can be helpful in generating profits either in future or in the
present (Subramanian and Ramanathan, 2012). There are different forms of an asset. It can be
inventory, human resource, property, excess profits, etc. Hilton Hotel's management includes
asset and inventory administrating system that takes care of business investments and profits. Lot
number or revision number is given to every item that is in the warehouse. It helps in tracking
the availability and accessibility of various items through this unique code. Podium has a billing
system that delivers respective bills to their customers after they make a purchase or complete
their respective meals. Bills and receipts are also a form or tool through which inventory is
managed (Brown, Bessant and Lamming, 2013).
Services that are to be provided to clients is an element of food production units. Waiters
and serving staff are counted as asset of the organisation because they are like sources of income.
Restaurant management can include service charges in their billing system so that better
recovery of investments is possible (Wang, O’brien and Li, 2010). Podium's service management
operations are also handled by the inventory management software. Despite of being a part of
service industry, this restaurant doesn't hold a product identification system because beverages
and food items which are prepared by the chef cannot be labelled. Hence, a separate menu is
prepared which contains list of items produced with their specific prices. Moreover, it would be
legitimate to infer that inventory and asset management system of Podium is smooth and
efficiently applied in Hotel's functioning structure. Optimisation techniques can also be implied
for forecasting future demands and order quantities (DeHoratius and Rabinovich, 2011). This
shall help in being prepared for sudden rise in customer requests during off-season times.
2. Key operations
Restaurant is a production system that involves real time dealing with customers and
fulfilling their expectations. Apart from food, ambience and human relations are two important
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components that are helpful in adding value to corporate image of the company (Mahadevan,
2015). Following are the main operations of Podium restaurant in Hilton Hotel:
1. Supplier management
2. Inventory control
3. Product development
4. Maintaining quality and pricing of food products
5. Updating menu items
6. Promotion and advertising
Suppliers are the key to raw materials. It is important for Hilton's managers to maintain
good relations with suppliers. These can be small scale agricultural producers, breweries, etc. For
ensuring unhindered supply of raw materials to restaurant, Hilton has to make efficient
strategies. This operation of managing supplies is essential because is the foundational process of
entire business functioning (Singhal and Singhal, 2012). Raw materials are now gathered and
kept at warehouse or store. Inventory or asset control software is implemented which can be used
for handling supplies and demands of customers.
Product development operation of Podium restaurant involves innovation. Once, raw
material is gathered; the company needs to find out alternatives that will help in devising new
products and innovative services (Jacobs, Chase and Lummus, 2014). For instance, Italian
cuisine is offered as a special item on the menu. Target markets must be aware about this
speciality and features of the restaurant. Hence, product development operation is continuously
applied. Brand name can only be acquired when stakeholders are aware about the specialities of
restaurant (Earle, 2013).
The next operational stage after product development is Quality and price maintenance.
Hilton hotel's luxurious services and best in class internal environment has helped the
organisation to acquire sufficient customer share. This is also possible due to effective strategies
regarding pricing and quality management (Phillips and et. al., 2016). Standards set for pricing
commodities helps in creating labels which are not too costly or too low. Recovery of expenses
which are involved in the production process is entirely based on the pricing of products. In
addition to this, quality is another factor which needs to be preserved and controlled for incurring
benefits. Menu is a kind of structured document that helps company to communicate the
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products and services with their priced labels, to the consumers. It is the responsibility of
manager that menu cards or booklets are efficiently updated and structured (O'Reilly, Kumar and
Adam, 2015).
Customers are highly impressed when hotel staff is elegant, polite and professional. Their
behaviour and attitudes help in managing customer services fluently. Podium restaurant has to be
assured that their customers are not ill-treated or exploited. Promotion and advertising strategies
is the marketing operation of a business system (McGinnis, 2014). Although production systems
do not include such things, it is important for the functioning of business. A good consumer
experience means word-of mouth publicity which helps in delivering the quality and quantity of
services to potential customers. Podium already has a testing marketing plan which involves
rigorous promotions of restaurant with hotel through digital marketing techniques. This operation
helps in understanding the structure of target market with an analytical view of potential
customers and their interest levels in a particular set of service and product (Uphoff, 2013).
Restaurant production system works with this operational strategy for meeting its
business objective of delivering best in class services to customers without compromising in
profits and popularity (Piercy and Rich, 2015). Out of the above mentioned operations, Podium
can experience declination in its market share and competition value because of ineffective food
costs control.
3. Points of failure
Delivery system in service industry is can fail at any point due to following reasons:
1. Poor training and development practises.
2. System requirements are not managed appropriately.
3. Internal faults.
4. Lack of promotional activities.
Employees are the most important medium for delivering services to customers and
clients. When training and development programs are initiated in the organisation regularly,
skills and knowledge of human resource is enhanced and fabricated (Fullerton, Kennedy and
Widener, 2014). They are enabled to perform their daily operations easily and efficiently.
Podium's poor training practises can lead to failure of delivery system in this production
operation. For instance, a customer demands a beverage in Spanish language and the serving
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staff of restaurant is incapable to understand or communicate with this foreign customer. Then a
systems failure is generated and delivery is interrupted. If effective training in languages which
are more common amongst customers is given to employees and managerial position people then
chances of this failure are minimised (Carlborg, Kindström and Kowalkowski, 2013).
It is not necessary that needs and demands of only customers are to be given preference.
In the priority hierarchy of needs, it is possible that customers may be considered first and later
the employees. System requirements refers to the needs of components which are involved in the
operations and business functions of the company (Drohomeretski and et. al., 2014). It is
possible that the manager has presented incorrect assumptions regarding particular requirements
of the restaurant. This misleads strategies and the overall decision making process gets affected.
On the other hand, business engineering is disturbed due to such an in appropriate approach for
meeting business objectives.
The most important thing that can lead to failure of delivery system and sometimes the
entire strategy is employee satisfaction and interest level towards the job. Unhealthy working
conditions and insecurities amongst staff members are the internal faults which need to be
managed by the company (Maurer, 2014). Productivity can increase only when working
conditions are good enough. Podium restaurant has to manage their operations in such a way that
smooth execution is guaranteed. Apart from being the duty of manager, business owners and
leaders also have to actively participate in recognising the faults or sources of failures in
delivering efficient services.
As stated before, promotional activities are play a crucial role in product cycle. Once, the
product is manufactured and sent to the markets; it has to be promoted and advertised on large
scale. Marketing adds value to the product and services (Oropesa and et. al., 2016). Moreover,
they are like strategies to attract potential customers with a vision of gaining maximum profits.
Hilton's marketing or promotional strategies are highly efficient in meeting business objectives.
Inappropriate or unethical promotional events leads to legal complications for the company.
People should not be mislead by the activities which are specifically related to marketing of a
product or service of the company. Customers' rights and safety is threatened when unethical
marketing is used (von Thiele Schwarz and et. al., 2016). Moreover, the delivery of services is
hindered because of decreasing customer share. Henceforth, it is quite clear that aforementioned
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four factors are responsible for failure of delivery systems in this organisation of service
industry.
4. Lean approach
Kaizen or lean approach of continuous improvement is a technique which can be implied
for overcoming or avoiding failures which can lead to disturbances in the production system. As
discussed above, there are two major factors which can lead to failure of delivery system in
restaurant that is Podium. Managers and leaders of the company are responsible for this failure
due to lack of knowledge and operations management strategy. Hence, kaizen can be applied to
business operations for gaining better results and flawless delivery of services (Kaizen with Six
Sigma Ensures Continuous Improvement, 2017).
The lean approach of enhancing production system proposed for deteriorating agents is
continuous improvement i.e. kaizen. Basically organisations employ kaizen with six sigma to
manage their operations efficiently. Productivity can be improved if skills and knowledge of
employees or human resource is enhanced and updated. This is possible only when training and
development activities are regular. The principle of kaizen is to decrease hard work and increase
smart work (Buzztime, 2013). It helps in managing operations right from the beginning which
means that no chaotic situations or incorrect arrangements take place during execution.
Continuous improvement cycle is classified into seven stages or phases which are described as
below:
1. Identification of opportunity
2. Process analysis
3. Finding solution or alternatives
4. Implementing solutions
5. Evaluating results
6. Aligning with standards
7. Creating plans for future
This lean approach is selected for Podium restaurant because there is lack of participation
and leadership skills amongst employees. People are performing their tasks without natural
spirits and with low enthusiasm. When continuous improvement system is configured in the
business functioning, participation is encouraged. Training sessions when arranged on a regular
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basis helps in engaging staff members within company activities (Fullerton, Kennedy and
Widener, 2014). Their interest levels increase and job satisfaction is achieved. This automatically
leads to increasing productivity and efficiency of restaurants.
There are some more parameters which are enhanced with help of Kaizen. These include
quality management, cost effectiveness, smooth delivery systems, effortless management and
increased safety. For instance, Podium restaurant is facing certain issues in customer satisfaction.
After conducting a strategic analysis it was realised that products that were given to consumers
where not meeting their expectations. This means that chefs and serving staff has to undergo
training. Once training is effectively delivered to respective staff members it becomes easy for
them to handle customer demands and needs (Carlborg, Kindström and Kowalkowski, 2013). No
compromise is further made in acquiring maximum customer satisfaction. Hence, Kaizen
became the most convenient operations management technique or lean approach in handling
failures.
Podium restaurant must use Kaizen that is continuous improvement approach in handling
factors which can lead to failure of delivery systems. It will help in developing quality of
products and efficiency of labour force. Moreover, on the spot correction of committed mistake
helps in seeking perfection. Customer satisfaction levels will increase and as a result, the
corporate image of this organisation shall improve (Drohomeretski and et. al., 2014). Working
environment, products, practises and processes will witness improvements with help of this
technique. Implementation process of Kaizen is to be done in three stages that is present
situation, desired improvements and the steps through which this can be achieved. The strategists
and analysts working with kaizen have to evaluate proper measures and preventive steps so that
company doesn't get affected by same defects or flaws in the future.
5. Findings
Once a production system has been devised, it is important to check its reliability so that
a conclusion can be reached. This destination or conclusion is the pre-defined parameter which
can be used for comparing the relativity of applied approaches with operational performance
measures (Maurer, 2014). The lean approach that has been proposed for Podium restaurant is
Kaizen. It is basically a continuous improvement technique that needs to be implied in operations
management strategy for gaining better productivity and reliability over the production system.
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Reliability refers to the accuracy which is attained whenever a new improvement or
strategy has been deployed in business functioning (Oropesa and et. al., 2016). Kaizen's
reliability can be measured with help of comparison which can be made with previous results
and present outcomes. If growth graph is not on an increasing mode then, it implies that
proposed strategy is not reliable. Furthermore, the accuracy which is obtained in estimated
results and actual outcomes also relates to reliability. Supply chain of this production system
must be flexible and spontaneous in every situation after kaizen lean approach is implied. The
extent up-to which supplier relations with the restaurant have transformed helps in understanding
reliability of the approach. This finding determines the level of appropriateness which helps in
aligning operational performance measures.
Responsiveness can be considered as the second finding through which relativity of
kaizen with operational performance of the restaurant is judged. The training and development
sessions which are organised for improving effectiveness and productivity of employees helps in
meeting needs and requirements of the organisation (von Thiele Schwarz and et. al., 2016). It is
important that authorities must identify correct needs and make appropriate assumptions. The
purpose behind implementation of Kaizen is quality management. Whenever a mistake or fault is
detected in the operating system, quick actions are taken in handling these mistakes. When
people won't have the required skill or talent for coming up with alternatives and solutions then
no progress or advancement will takes place (Kaizen with Six Sigma Ensures Continuous
Improvement, 2017). Hence, kaizen has helped in achieving better responsiveness with value
addition to growth and development of the company.
Customer share can increase only when their expectations and demands are met easily. It
is important that restaurant authorities are aware about these parameters and they devise the
strategies in accordance with this perspective. Kaizen approach of operations management helps
in aligning production system with the operational performance measures. It helps in making
continuous improvements until the desired level of satisfaction is not achieved. The faults and
defects which occur in the delivering system are handled effectively when kaizen approach is
implied (Buzztime, 2013). It doesn't wait for actual outcomes and corrects the production process
right at the required moment. Henceforth, the application value of this approach helps in
attaining business objectives as well as customer expectations smoothly.
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It can be recommended for Podium restaurant or strategists of Hilton Hotel that kaizen
must be implemented with six sigma. Existing processes are improved with this approach and
performance is handled effectively (Uphoff, 2013). Moreover, cost savings and effectiveness of
applied strategies is also attained with help of these approaches. Adherence to company
objectives and customer orientation of strategies will only help in meeting operational
performance without any disruptions and failures.
CONCLUSION
This report helps in understanding operations management in the production system of a
restaurant that is Podium. Since, it is a part of Hilton's entire functioning, the level of
responsibilities and dedication of staff from this function is quite as compared to other
operations. Through this report, it can be inferred that the knowledge of key business operations
and inventory management is essential in smooth functioning of the company. There are certain
factors which can lead to failure of delivery system in this production line. Some of these can
even ruin business operations at international level. But Podium can adapt aforementioned lean
approaches for gaining an edge over competition and finally resulting in better management and
control over activities.
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REFERENCES
Books and Journals
Brown, S., Bessant, J. R. and Lamming, R., 2013. Strategic operations management. Routledge.
Carlborg, P., Kindström, D. and Kowalkowski, C., 2013. A lean approach for service
productivity improvements: synergy or oxymoron?. Managing Service Quality: An
International Journal. 23(4). pp.291-304.
DeHoratius, N. and Rabinovich, E., 2011. Field research in operations and supply chain
management.
Drohomeretski, E. and et. al., 2014. Lean, Six Sigma and Lean Six Sigma: an analysis based on
operations strategy. International Journal of Production Research. 52(3). pp.804-824.
Earle, R. L., 2013. Unit operations in food processing. Elsevier.
Fullerton, R. R., Kennedy, F. A. and Widener, S. K., 2014. Lean manufacturing and firm
performance: The incremental contribution of lean management accounting practices.
Journal of Operations Management. 32(7). pp.414-428.
Jacobs, F. R., Chase, R. B. and Lummus, R. R., 2014. Operations and supply chain management.
McGraw-Hill Education.
Karlsson, C., 2016. Research Methods for Operations Management. Routledge.
Krajewski, L. J., Ritzman, L. P. and Malhotra, M. K., 2013. Operations management: Processes
and supply chains (Vol. 1). New York: Pearson.
Mahadevan, B., 2015. Operations management: Theory and practice. Pearson Education India.
Maurer, R., 2014. One small step can change your life: The kaizen way. Workman Publishing.
McGinnis, L. F., 2014. Ubiquitous Operations Research in Production Systems. In Essays in
Production, Project Planning and Scheduling. Springer US. pp. 7-28
O'Reilly, S., Kumar, A. and Adam, F., 2015. The role of hierarchical production planning in food
manufacturing SMEs. International Journal of Operations & Production Management.
35(10). pp.1362-1385.
Oropesa, M. and et. al., 2016. The management commitment and its impact on economic and
competitive benefits gained by the implementation of kaizen in the industry. Handbook of
Research on Managerial Strategies for Achieving Optimal Performance in Industrial
Processes. 428.
Phillips, J. R. and et. al., 2016. Method and system for monitoring food packaging operations and
collection and dissemination of data related thereto. U.S. Patent Application 15/006,103.
Piercy, N. and Rich, N., 2015. The relationship between lean operations and sustainable
operations. International journal of operations & production management. 35(2). pp.282-
315.
Singhal, K. and Singhal, J., 2012. Opportunities for developing the science of operations and
supply-chain management. Journal of Operations Management. 30(3). pp.245-252.
Slack, N., 2015. Operations strategy. John Wiley & Sons, Ltd.
Subramanian, N. and Ramanathan, R., 2012. A review of applications of Analytic Hierarchy
Process in operations management. International Journal of Production Economics.
138(2). pp.215-241.
Uphoff, N., 2013. Agroecological innovations: increasing food production with participatory
development. Routledge.
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