Six Sigma Presentation Hospitality

Six Sigma in Hospitality

What is Six Sigma?

How Six Sigma works?

Six Sigma as a Metric.

Role of Six Sigma in Business

Six Sigma as a Process Improvement Methodology.

Characteristics of Six Sigma

Basic Implementation Roadmap

Impact of Six Sigma.

Why Six Sigma Works?

Role in Six Sigma Project

Six Sigma in Hospitality.

Benefit from Six Sigma

Examples

Six Sigma in Starwoods Hotel.

Some areas where Six Sigma adds value in Hospitality industry.

Need for using Six Sigma in Hospitality Industry.

Content

Six Sigma training is the best thing that had

happened to our employees, it is even better

than sending them to Harvard business school.

Statement by Jack Welch, former CEO of GE

What is Six Sigma? Sigma is a yardstick on which the performance of the process and improvements can be gauged upon. Six Sigma is an Improvement methodology which uses a structured approach to drive business improvement.

Six Sigma is a

Measure for Quality

Process For Continuous Improvement

Enabler for Culture Change.

Six sigma is a business strategy which deploys various set of tools, techniques & methodologies to bring in –

Rapid & Breakthrough process improvement.

Enhanced customer focus.

Data & Fact based decision making.

Creating culture for continuous & tangible improvements.

Structured problem solving.

How Six Sigma works? Y = f(X i ) The outcome Y is a function of inputs X i ,…… Traditional approach towards Problem solving is to approach the problem directly and try to identify a solution for it. Six Sigma challenges that school of thought and advocates a detailed Root Cause analysis to identify the factors impacting the problem, validating them using statistical tools and then finding solutions for the significant causes.

A six sigma project accelerates the performance of the CTQ in a comparatively smaller span of time. The unit of deployment of six sigma in an organization is the number of six sigma projects. A six sigma project is executed in a time frame of 5-6 months by a task force type team of 4-5 members. CTQ – The parameter chosen to make improvement through a Six Sigma project CTQ Performance Current Performance Six Sigma Project Future Performance

Six Sigma as a Metric Sigma is a measure of spread of a process ‘  ’ is the standard deviation of the process (variation in performance of the process), Sigma value ‘z’ Is the measure of the capability of the process. Lower the standard deviation the better the process is, Higher the sigma value better the process is. As ‘  ’ Standard Deviation decreases Sigma Value ‘z’ increases  z

As variation in the process decreases, it results in reduction of standard deviation & data points lying closer to the mean. The Z value increases. Z value is the measure of process capability. Z = 2, 69% Z = 3, 93.3% Z = 4, 99.3% Z = 5, 99.97% Z = 6, 99.9997% USL LSL Mean

What is the role of Six Sigma in Business Business / Operation / Project Quality Improvement Continuous Improvement ( as espoused by ISO and CMMI ) Discontinuous and breakthrough Improvement ( Six Sigma )

Six Sigma as a Process Improvement Methodology Six Sigma is a structured problem solving tool which deploys Brainstorming & Statistical tools to identify the vital root causes and finding a solution so as to optimize the Output. It follows DMAIC approach for problem solving. Define the project ( Assignment ) goals and customer (internal and external) deliverables. Measure the process to determine current performance. Analyze and determine the root causes of the defects. Improve the process by working on the validated root causes Control the improved process performance to ensure sustainable results. Define Measure Analyze Improve Control

Characteristics of Six Sigma Approach

The extensive focus on customer requirements

The direct link to business strategy and financial results

The required commitment of top leadership up-front.

Each project delivers bottom line results in a short time

The disciplined improvement methodology based on measurement and analysis

Full-time Six Sigma team leaders who are extensively trained in statistical thinking as well as team and project skills

The integration of Six Sigma thinking into the business infrastructure through incentives and rewards

Basic Implementation Roadmap Understand and Define Entire Value Streams Deploy Key Business Objectives - Measure and target (metrics) - Align and involve all employees - Develop and motivate Define, Measure, Analyze, Improve Identify root causes, prioritize, eliminate waste, make things flow and pulled by customers Control -Sustain Improvement -Drive Towards Perfection Identify Customer Requirements Vision (Strategic Business Plan) Continuous Improvement (DMAIC) Identify Customer Requirements

Impact of Six Sigma 20,000 lost articles of mail per hour Unsafe drinking water almost 15 minutes each day 5,000 incorrect surgical operations per week 2 short or long landings at most major airports daily 200,000 wrong drug prescriptions each year No electricity for almost 7 hours each month The Classical View of Quality “ 99% Good” (3.8  ) Seven lost articles of mail per hour One minute of unsafe drinking water every seven months 1.7 incorrect surgical operations per week One short or long landing at most major airports every five years 68 wrong drug prescriptions per year One hour without electricity every 34 years The Six Sigma View of Quality “ 99.9997% Good” (6  )

Why Six Sigma Delivers? Six Sigma Project Top Management Commitment Disciplined Approach Use of Statistical & Problem Solving Tools Support from Highly trained BBs & MBBs

Role in Six Sigma Project

Six Sigma in Hospitality

Six Sigma has been successfully deployed by many organizations in Hospitality industry across the globe, some of them are:

Starwoods Hotels

Marriott International

Sheraton Miramar resort

Ritz-Carlton

ITC Hotel

GRT Hotels

The beauty of Six Sigma implementation lies in the fact that it can be integrated well with accepted management approaches in all industries, be it ISO 9001, ISO 14001, NABH, TS 16949, HACCP, OHSAS, SEI – CMM level 5, TL 9000, AS 9000, or any other.

Benefits from Six Sigma

Benefit to Hotel

Increased customer satisfaction.

Translating to fewer errors

Better processes

Strengthen the Brand

Reduce cost/ cost savings.

Benefit to Individuals

Structured problem solving methodologies.

How to apply statistical analysis tools to problem solving

Team Management & Leadership skills.

Six Sigma Certification.

Reducing percentage of No-shows from 20% to 10% for a 100 room hotel. The cost of the room per night has been taken as Rs. 10,000/-.

Number of room days without occupancy before project - 7302

Number of room days without occupancy after project - 3650

Total revenue increase as a result of Six Sigma project per annum:

= 3650 x 10000

= Rs. 36.5 Million.

Assumption:

It has been assumed that there is enough demand for rooms in case we come to

know of a customer not turning up in advance.

Example 1

Reducing Electric power consumption by 25% for a 100 room hotel.

Amount of power consumption per month -1000,000 Units(KWH)

Improved power consumption per month - 750,000 Units

Total power saved annually = 250,000 x 12

= 3,000,000 Units

Cost per unit of electricity = Rs. 5 per Unit

Total cost saved as a result of Six Sigma project per annum:

= 300,000 x 5

= Rs 15 Million

Example 2

Six Sigma in Starwoods Hotel

Six Sigma at Starwood has helped improve the financial performance

of the group by ushering in the quality and consistency of the customers' experiences. Six Sigma has also provided the guidelines and tools to create a consistently superior guest experience at all properties, and simultaneously improve the bottom line.

Starwood has run over 3000 projects worldwide to date in areas such

as productivity, menu re-design, resort concierge, email marketing and launching a worldwide sales initiative.

Some areas where Six Sigma adds value

Hotel-wide:

Enhance Customer Loyalty

Reduce Employee attrition

Productivity/Efficiency Improvement

Developing better performance measures/ metrics

Increase Revenue

Reduce Cost

Processes:

Optimal utilization of the current product mix (rooms) to increase revenue

Reduce wait time during peak check-in time/ check out time.

Eliminate billing errors and improve accuracy

Reduce No shows

Increase Occupancy

Reduce the turnaround time of making/turning down a room

Standardization of cleanliness across areas.

Reduce the turnaround time of making/turning down a room.

Need for using Six Sigma in Hospitality Industry

In an industry where customer interactions occur on an hourly basis, each customer touch point is critical for building personalized service credibility and developing customer affinity. The call of the hour is to welcome Six Sigma in this industry and utilize the skill to enhance employee efficiency and customer satisfaction. Increasing competition from other organisations and intensive work reaffirms the above hypothesis.

Six Sigma successful implementation will sustain and build new momentum, strengthen the brand, enhance ability to share best practices globally, speed the adoption of new technologies, prepare for the challenges of constant change, provide critical focus on the customer and, over time, help deliver a dramatic improvement in the bottom line.

Please contact us for your Feedback: Atul Kumar Jha – Business Development Manager Office: +91 124 4271990 Mb: +91 9811422831 Email: atul@sveltesystems.com Thank You