1、M E A S U R I N G A N D I M P R O V I N G P R O D U C T I V I T Y34Improving productivityThis session discusses the importance of balancing operational needs to improve productivity against customer needs for quality and accuracy. It also suggests techniques for improving productivity. Finally, it i
2、ntroduces four key elements for ensuring the success of a productivity measurement program. Allow at least two hours for this session. Any breaks should be decided at the trainers discretion based on the progress within the group.Review session twoIn session two we looked at a five-step procedure fo
3、r developing productivity measures. Those five were:Step 1: Define mission statement: major goals and customers Step 2: Identify customer expectations and quality needs Step 3: Identify and develop measures for key outputsStep 4: Identify and develop measures for key inputsStep 5: Construct a produc
4、tivity indexWe used these five steps to develop productivity measures for our individual departments. We have identified that hotels may be measuring production, whilst some are measuring productivity. Only a few claimed to do something with the information.Session3I C O N K E YShow overheadAsk part
5、icipantsGroup discussionWorkbook review35During this session, were going to be focusing on three things:the need to balance productivity improvements against customer needs,ways of improving productivity, and four tips for ensuring the success of your productivity measurement program. At the end of
6、session two we mentioned that sometimes changes to improve productivity might result in lower customer satisfaction levels. In our example of the restaurant, we said that we could improve our overall productivity ratio if we increased total orders and allowed more mistakes. However, customers are no
7、t going to be pleased if we tell them that their wrongly filled order or cold meal is the result of a change we made to improve productivity. While productivity measures are very useful for identifying ways we can do things better and for cutting costs, they cannot be the only criteria we use to mak
8、e decisions. As managers, we must balance the operational need to improve productivity against our marketing needs to satisfy customer needs. Lets look at this issue in more detail.Balancing operational and customer needsDuring session one we talked briefly about how services are different from manu
9、factured goods. We mentioned four characteristics of services they are perishable, heterogeneous, inseparable and intangible. The fact that we provide a service means we cannot simply make productivity changes without thinking about how the change will affect our customers. Remember: our hotel is ou
10、r factory floor our guests are part of our production process, our product is an experience. That experience is created in the interaction between our customers and our service system. This is very different from, for example, a detergent manufacturer: Customers who buy Sunshine soap might never see
11、 the inside of a Sunshine soap factory. Workers on the factory floor might never meet a customer who buys a Sunshine soap product. The manufacturers of sunshine soap can make many productivity improvements to their production process and the difference might never be apparent to customers. The custo
12、mers who buy Sunshine soap can judge its quality and value by its physical appearance, weight, look, feel, and packaging. 36As a service industry we do not have this luxury. Our customers judge us by the physical appearance of our premises and the skills and service of our staff. Our staff is consta
13、ntly in contact with customers. Our service system is interactive and provides a customised service for customers. If we change our systems, normally it means a change for our staff and a change for our customers as well.So, while operational efficiency might be crucial to our long-term competitiven
14、ess, we must always balance it against the effectiveness of our service system from the customers point of view. Sometimes this might mean we have to accept lower productivity in order to meet the quality standards of our customers that is the nature of our business. Lets now look at some techniques
15、 for improving productivity in our business. These techniques are adapted from the manufacturing sector.Manufacturing techniques for improving productivityIn 1967, a man named JD Thompson came up with the perfect world concept. The reason its called the perfect-world concept is because in a perfect
16、world, there would be no uncertainty. Outputs, inputs and quality would remain constant. Thompson said uncertainty creates business inefficiency. To improve efficiency, businesses must first reduce uncertainty. His suggestion for reducing uncertainty was to separate the technical core of the busines
17、s from the rest of the activities conducted by the business. The technical core is the place where the organisation conducts its primary operations. For us this is our kitchens, our laundries, the back office, our computer systems the places where we do our work. Companies should then focus on impro
18、ving productivity in the technical core by:keeping outputs, inputs and quality constant,setting up strict procedures and rules to reduce uncertainty, replacing people in low-skilled jobs with capital equipment, andacting as if demand will always equal supply that is, keeping output at full capacity.
19、 Manufacturing techniques for improving productivity37Another strategy related to Thompsons perfect world, is the idea of the focused factory. Here an organisations activities are broken into sub-activities and different parts of the company develop expertise in performing one task only. The idea is
20、 that concentrating on and repeating one particular task only leads to improved productivity because the more we focus and practice, the more experience we have and the more effective we become at completing that one task. That is, focus leads to greater effectiveness and efficiency. The third manuf
21、acturing tactic for improving productivity is called the plant-within-a-plant concept. Its very similar to the focused factory concept.This is about breaking up large processes into smaller units separate from one another, and treating each unit as a separate activity. For instance, in our kitchens
22、the process of acquiring produce can be separated from storing and preparing the produce, cooking the produce, serving and presenting the meal, dealing with leftovers and storing finished products. The idea is that breaking up large processes into sub-activities allows companies to use tactics like:
23、Buffering: building up stores of inventories on either side of a process and introducing procedures for controlling quality of inputs and outputs.Smoothing: managing the environment to reduce fluctuations in demand or supply.Anticipating: planning for fluctuations in supply and demand.Rationing: dir
24、ectly allocating inputs and outputs when the demands placed on a system exceed the systems ability to handle them.In reality, its difficult to apply these three concepts (perfect world, focused factory, plant-within-a-plant) to improving productivity in service industries. Why do you think that is t
25、he case?In service industries, its difficult to separate production from the customerDemand for services varies every day, every hour. Its therefore hard to plan for capacity and use.Our business is full of uncertainties difficult to separate our technical core from the service system, since the ser
26、vice we provide is our technical core.38We dont handle a standardised product where all inputs and outputs can be held constant in fact, our service is customised for each guest.Its hard to control each customer interaction with our service personnel theyre all individuals, with unpredictable moods
27、and personal preferences.Smoothing and anticipation is difficult because customers arrive at different rates one minute our restaurants can be empty, the next they can be full. Some demand peaks are predictable, but not all are. Planning for the unpredictable peaks would be counter-productive, since
28、 the excess capacity might strain the whole system.Productivity solutions for service industries It may be hard to apply traditional manufacturing tactics to the service industry, but its not impossible. How can we learn and adapt these concepts?Seek responses from the group.Lets now look at some pr
29、oductivity solutions that might work for our industry. There are five tactics we can discuss:1.Isolating the technical core2.Production lining the whole system3.Creating flexible capacity4.Increasing customer participation in the service process 5.Moving the time of demand to fit capacityLets look a
30、t each one in a bit more detail.Isolating the technical coreIn our industry, one way of isolating our technical core without sacrificing customer service quality is to separate the technical areas of our business that generally involve low customer contact, from the high customer contact services. T
31、hen, high customer contact areas can focus on customer satisfaction rather than productivity. Improving customer satisfaction is, after all, an important way of improving quality and reducing the costs associated with errors or defective outputs.Service industry solutions39Low customer contact areas
32、 can focus on reducing uncertainty and improving productivity. Can you think of any ways of applying this approach in our business? Invite participants to write examples down in their workbook page 17 (similarly for the subsequent four solutions).Concentrate productivity improvement efforts on areas
33、 that have little customer contact. In the hospitality industry we often make the mistake of cutting high customer contact services when trying to cut costs. But such a tactic only hurts us in the long term. Isolating the technical core works best when we focus cost-cutting on back office procedures
34、 and on activities that dont have a significant affect on the quality of key outcomes that are valued by clients. Reduce personnel costs by reducing the amount of customer contact for some services remember, however, that the customer may actually prefer a higher level of customer contact for that s
35、ervice.Replace customer contact with an automated system for example, booking wake-up calls through an automated telephone system, or allowing clients to check and pay their bills through an automated telephone system. Review all activities from the customers point of view to determine the extent of
36、 customer contact they want. We might find that for some services, theyre happy to have less direct contact with our personnel. They may prefer to do business by mail, online or through intermediaries.Production-lining the whole systemThis second technique applies particularly to low customer contac
37、t activities such as laundry and housekeeping or engineering, or back of house services (kitchens, back-office.). It focuses on improving productivity in the technical core (that is low-customer contact areas) by using hard and soft technology. Hard technology refers to hardware or equipment used to
38、 provide standardised outputs. Soft technology refers to rules, regulations, and procedures that should be followed to produce the same quality of output. 40This approach works best for activities where customisation is minimal and standardisation is the rule. For example fast-food restaurants, wher
39、e the customer contact is kept minimal and there is a very limited product line for customers to choose from. Even incremental changes in processes can lead to significant changes in productivity. In what areas of our business is production lining useful?Back-office where standard computer systems o
40、r procedures could be introduced.Facilities management for example standardised showerheads that regulate water flow or a kitchen product that releases a standard amount of a certain ingredient every time.Soft technologies could include introducing checklists for housekeeping to ensure that all room
41、s adhere to the same cleanliness standards and all minibars are stocked with the same quantities and types of products. Or rules and procedures that must be followed on check-in, or when serving customers in our restaurants.Theres no point introducing a McDonalds style production system to our resta
42、urants because it doesnt fit with what Hilton stands for. However, we may be able to streamline some processes to improve the efficiency of our dining services. .Creating flexible capacityThis third tactic involves trying to match supply to demand. Demand can fluctuate a lot in our business. Flexibl
43、e capacity strategies aim to reduce personnel costs by catering for these fluctuations in demand. Flexible capacity strategies that have been used by service firms to improve efficiency include:using part-time or casual staffcross-training employees so that the majority of employee efforts focus on
44、customer-contact jobs during peak hours. This is most important because the customer contact areas are the areas that are highly visible to customers. sharing capacity with other firms: that is coming to arrangements with other hotels to carry our excess demand when we cannot meet it.41The advantage
45、s of these strategies are quite clear we have a skilled work force and a part-time team to help deal with changes in demand and amicable arrangements with other hotels to help out during times of peak demand.What do you think are the disadvantages of using these flexible capacity strategies?Part-tim
46、e employees may be less committed and so may deliver a lower standard of service that has a negative impact on our customers. They may be less able to deal with the stress and frustration associated with working with us at our busiest times. Its not always possible to identify the activities where c
47、ustomer contact is most needed. Customers have different standards some may wish to speak to laundry directly or discuss their wake up call arrangements with a person, rather than an automated system.It can be dangerous to share capacity because we cannot control the quality standards at the other s
48、ervice facility. It may lead to confusion in the customers mind about what exactly we stand for.The disadvantages dont mean these strategies have no relevance for us. Rather, they indicate points we may need to address through training, development and customer research to ensure that our flexible c
49、apacity strategies work for us.Increasing customer participationThe essence of this approach is to replace the work done by our employees with work done by the customer. For example, getting customers to make their own toast, using buffet service more or providing laundry facilities so they can wash
50、 their own clothes, providing irons so guests can iron their own clothes, getting clients to re-use towels and so on. This strategy focuses directly on reducing the costs associated with providing outputs for customers. Increasing customer participation means customers must change their behaviour an
