p. 1

Ritz-Carlton

Prof. Silverman

p. 2

Ritz-Carlton

• Strategy– Operate hotels in the luxury segment of the market– Focus on personalized service to customers– Strive to improve operational efficiency– Have procedures to ensure the highest quality standards– Provide consistent quality at all properties (worldwide)– Achieve high levels of service through:

• Building systems to measure service performance• Responding to problems quickly• Anticipating customer demand• Reacting quickly to that demand

p. 3

Ritz-Carlton

• Operations Strategy– Steadfastly collect data on guest preferences– Continuous effort to develop novel approaches for improvement– Hire people with an aptitude for service– Strong emphasis on training across all departments– Empowering employees to solve customer problems– Reward structure that recognizes employee performance

p. 4

Ritz-Carlton

• Performance– Won Malcolm Baldrige Award 1992

• Only hotel company to win this prestigious award• Award criteria

– Leadership– Strategic Planning– Customer and Market Focus– Information and Analysis– Human Resource Focus– Process Management– Business Results

– Proportion defects is only .0037

p. 5

P-chart

-0.01

-0.005

0

0.005

0.01

0.015

0.02

0.025

0.03

0.035

1

15

29

43

57

71

85

99

11

3

12

7

14

1

15

5

16

9

18

3

19

7

21

1

22

5

23

9

25

3

26

7

28

1

29

5

30

9

32

3

p

p-bar

UCL

LCL

14 out of control days p = .0037

p. 6

Occupancy

p. 7

Quality Problems by Defect

p. 8

Quality Problems by Day of Week

p. 9

Quality Problems as % of Occupancy

p. 10

Room Clean by Day of Week

p. 11

Incorrect Reservation by Day of Week

13 incidents on one Wednesday

p. 12

14 Out of Control Days

• 105 Defects on 14 Out of Control Days

13 of these were due to a single incident on 3/12

p. 13

Room Clean p-chart

-0.01

-0.005

0

0.005

0.01

0.015

0.02

1 17 33 49 65 81 97 113

129

145

161

177

193

209

225

241

257

273

289

305

321

p

UCL

LCL

p-bar

8 out of control days P-bar = .0013

Sat

Sun

Fri Sun

Fri

Sun

Wed

Sun

p. 14

14 Out of Control Days

7-Jan-97 912-Jan-97 8 Sunday14-Jan-97 715-Jan-97 717-Feb-97 5 Presidents Day12-Mar-97 1520-Apr-97 6 Sunday27-Apr-97 5 Sunday15-May-97 74-Jul-97 10 Independence Day

13-Jul-97 5 Sunday25-Sep-97 71-Oct-97 77-Nov-97 7

p. 15

Analysis

• Room clean largest problem• Room cleaning problems on Sunday• More problems on weekends• Room clean out of control on weekends and holidays• All defects out of control 50% of time on Sunday and

holidays• Room assignment problem during the week

p. 16

Problems from Analysis

• Staffing on Sunday• Management on Sunday• Leisure vs. business customers• Room assignment problems may be caused by

empowerment and reservation system• Check in/check out delays may be caused by leisure

customers• Reservation system utilization causing incorrect

reservations• Insufficient staffing or systems for wake-up calls

p. 17

Recommendations

• Sunday staffing– Management– Housekeepers– Rotation of Sunday assignments

• Better coordination between front desk and housekeeping on room cleaning readiness

• Better coordination for reservation systems• Computer backup for wake-up calls• Better management and training for housekeepers• More integration of housekeeping and engineering• Reserve specific rooms when so requested

p. 18

Ritz-Carlton Initiatives

• Room cleaning in teams of three– Lower worker turnover– Higher productivity– Better quality

• Display SQI (service quality indicator) throughout hotel so employees can monitor real-time guest service processes

• Developed POLO (protect our little ones), a child safety program in response to increased family travel

• Developed CLASS (customer loyalty anticipation satisfaction system) a company-wide database to meet and anticipate repeat customer’s preferences and requirements

p. 19

Ritz Carlton Initiatives

• Segment check-in system– Express for business travelers – Pampered with champagne and a presentation of hotel

services and amenities for leisure travelers

• Merge deep cleaning housekeeping processes with engineering preventive maintenance schedule to ensure that all guestrooms are guaranteed to be defect free every 90 days

• Stagger lunch hours of housekeeping supervisors to streamline guest room inspection process. This reduces the problem of guest room readiness