ORM Presentation - Final

7/31/2019 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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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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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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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


Sea food Gross requirement 1 1 1 1 1 3LT = 2 days Scheduled receipts 1 1Order quantity = lot-for-lot Projected available balance



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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

Documents

ORM Presentation - Final