Productivity

In this case study, you will be given background information and a data file. From this, you will calculate both the benchmarks for each of the productivity benchmarks and the total savings if every unit achieves them.

You will then prepare a memo that communicates this information to senior management and provides 3 SMART goals for each of the units to pursue to help them achieve the benchmarks.

HOSP 4055 Hospitality Operations Analysis
Week 9 Case Study: Productivity Analysis
Background:
Most business units in the hospitality industry are managed by multi-unit management
companies. This model has proven very successful over time, and allows the
management company to identify the best performing units, establish performance
benchmarks, and attempt to replicate the best performance across the portfolio.
Payroll expense is typically the largest operating expense in any hospitality business
unit.
There are two components to payroll expense, the numbr of hours worked and the cost
per hour for wages and benefits. Management does not control the cost per hour. The
cost per hour of labor is controlled by supply and demand and the state and local taxes
and regulations.
Attempting to compare payroll expense across a portfolio is a useless analyisis. What
should always be compared is productivity – where the price component of the labor is
stripped out and we analyize how many man hours were consumed to produce one unit
of output. Therefore, the quest for achieving the best productivity (labor inputs
required to produce one unit of output) is constant.
Beyond the mathematics of establishing benchmarks though is the ability to identify
best practices from the highest performing business units, and then replicate those best
practices to all of the business units – allowing all units to improve quickly. Thus far,
several of the best practices for obtaining the best productivity that have been
identified are:
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•
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Forecast accuracy. Accurate forecasting allows accurate scheduling.
Scheduling to the staffing guides. When you schedule for the best productivity,
and your forecast is accurate, you have a much better chance of achieving the
best productivity.
Continual training. Well trained staff are always more efficient. 5 minute
training bursts at the start of each shift introduce and reinforce best practices.
Sufficient supply inventory levels. Sufficient par inventory levels are critical to
the elminination of wait times. The hotel staff should always have what they
need to do their jobs.
Everything in working order. All equipment needs to be maintained so that it is
always working properly, allowing maximum labor efficiency.
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•
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Biometric time and attendance systems. Using biometric systems assures
management that the employees you are paying are the actual employees who
are working. Non-biometric systems have serious flaws that allow a number of
problems, each of which is costly.
Well organized storage areas. Well organized storage areas, specifically
designed incorporating LEAN Six Sigma storage principles can dramatically
increase productivity because staff can quickly find what they need, reducing the
time spent hunting for items.
No Overtime is ever scheduled.
Staffing is monitored in real time, and staff are released early as demand
declines. This is particularly true in food and beverage operations.
Management personnel step in to cover partial shifts or breaks as needed.
Case:
You work for a multi-unit hotel management company. On an annual basis, the Key
Performance Indicators (KPI) your company measures are analyized and a new
benchmark is established based on the upper quartile of business units.
You are currently analyzing productivity metrics. You have been provided with
productivity data from the 20 hotels in the portfolio. You need to establish benchmarks
for each of the productivity metrics, and publish them along with 3 SMART goals based
on the analysis you complete.
In the analysis, you will calculate how much payroll savings would havel been achieved
if every hotel were able to move to the benchmark for each of the productivity metrics.
You have been provided with the average wage/benefit rates and the number of
occupied room nights for each hotel.
The data is included on the Excel file. You follow the same process as you did earlier for
benchmark establishment. Sort each of the metrics, average the best quartile and that
becomes the benchmark. Each metric will have different “best” units, so each is sorted
and averaged separately.
You will prepare a memo to the general managerof one of the units, including the the
total payroll savings that will be achieved in a table (copy/paste from Excel) and then
laying out the 3 SMART goals following – each of which must be based on a productivity
metric for the single hotel you selected in the analysis.
Your SMART goals must be based on the benchmark data.
Your SMART goals must have a calendar due date that is a month end.
Submit
Both your completed Excel template with the calculated benchmarks and the Word
document that has your memo as described above.
This assignment is worth 100 points.
HOSP 4055 Operations Analysis
Week 9: Productivity Benchmarking S24
The following are the productivity related KPI metrics for the prior year. The average of the best performing quart
Hotel Unit
Alpha
Beta
Gamma
Delta
Epsilon
Zeta
Eta
Theta
Iota
Kappa
Lambda
Mu
Nu
Omega
Omicron
Pi
Rho
Sigma
Tau
Upsilon
Housekeeping
MHPOR
Front Desk
MHPOR
Laundry
MHPOR
Engineering
MHPOR
0.495
0.545
0.505
0.515
0.525
0.575
0.565
0.545
0.495
0.545
0.505
0.515
0.525
0.575
0.565
0.545
0.505
0.555
0.585
0.575
0.145
0.195
0.155
0.165
0.175
0.225
0.215
0.195
0.145
0.195
0.155
0.165
0.175
0.225
0.215
0.195
0.155
0.205
0.235
0.225
0.090
0.115
0.095
0.100
0.105
0.130
0.125
0.115
0.090
0.115
0.095
0.100
0.105
0.130
0.125
0.115
0.095
0.120
0.135
0.130
0.082
0.103
0.086
0.090
0.095
0.116
0.112
0.103
0.082
0.103
0.086
0.090
0.095
0.116
0.112
0.103
0.086
0.107
0.120
0.116
Steps:
1. Sort the table above for each of the MHPOR columns. (make certain you include all columns A through L EVER
2. After each sort, calculate the benchmark for the metric you sorted by. The benchmark is the average of the be
3. Repeat this for each of the four benchmarks.
4. Following the instructions in the walkthrough video, calculate the savings for each job for each hotel, and for th
of the best performing quartile for each will become the benchmark for the coming year.
Housekeeping
Average Wage
Rate
Front Desk
Average
Wage Rate
Laundry Engineering
Average
Average
Wage Rate Wage Rate
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
16.80
17.05
16.95
17.20
17.45
17.35
17.60
17.85
17.75
18.00
17.90
18.15
15.90
15.80
16.05
15.95
16.20
16.10
16.35
16.25
19.00
19.05
19.20
19.35
19.50
19.65
19.80
19.95
20.10
20.25
20.40
20.55
20.50
19.00
19.05
19.10
19.15
19.00
19.05
19.10
17.05
17.10
17.25
17.40
17.55
17.70
17.85
18.00
18.15
18.30
18.45
18.60
18.55
17.05
17.10
17.15
17.20
17.05
17.10
17.15
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
all columns A through L EVERY time you sort.
mark is the average of the best (lowest) performing 5 hotels.
job for each hotel, and for the total portfolio.
25.55
25.60
25.75
25.90
26.05
26.20
26.35
26.50
26.65
26.80
26.95
27.10
27.05
25.55
25.60
25.65
25.70
25.55
25.60
25.65
Occupied
Room
Nights
7,020
7,520
7,920
7,970
7,670
7,370
7,870
8,270
8,320
8,020
7,720
8,220
8,620
8,670
8,370
8,070
8,570
8,970
7,320
7,070
Use these columns to calculate the current payroll expense and
Housekeepi Front Desk
ng Savings
Savings
Laundry
Savings
Entineering
Savings
Total
Savings