Operations Management Case Study

Q1 Starwood hotels and resort uses a top-down approach towards identification and solution of its customer-related challenges. The organization employees various strategies for the process, which include commitment, measurement systems, tough goal setting, education, communication, and customer priorities. Firstly, Starwood is committed to ensuring that it provides the best services to its customers. For instance, it carried out a departmental survey where the customers are the participants. The hotel went ahead to implement the findings and recommendations of the studies. For instance, Starwood launched the Sheraton Service Promise Program in Canada and the US as recommended in previous surveys. Further determination by Starwood is evident when it involved its Six Sigma team to use DMAIC (Defining, Measuring, analyzing, Improving, and Controlling) method to create a significant change because the previous plans failed to improve experience and customer satisfaction to the required standards. All these processes and determination are an indication of Starwood commitment towards quality improvement and maintenance.

Secondly, the organization ensured that its systematic measurement procedures have timeframes and result evaluation. For instance, a time limit was set for responding to service issues within fifteen minutes of a guest’s stay at the premises. Besides, Starwood set monitoring and evaluation procedures between twelve and eighteen months to track changes and ensure that the implementation of any recommendation continues beyond the expiry of the survey. Thirdly, tough goal setting is evident in the way the company responds to change that is considered insignificant. For instance, it is stated that even though there was an increase in the scores of customer care services, the hotel went ahead to engage the Sigma Six team to devise the best method for realizing higher scores. The team responded by proposing and putting in place the DMAIC method. This indicates that Starwood was determined to remain at the top and compete globally by setting high-quality goals for its employees to meet customer satisfaction. Regarding education, the organization informed its employees through the intranet in various ways of improving customer satisfaction to enable them to improve their services. The fifth element is communication where the company uses multiple communication strategies such as intranet to dispatch Six Sigma results to its employees to enable them to improve their services. Lastly, customer priority is evident in the main reason for the other five strategies. For instance, the Starwood hotel employs the use of six sigma to ensure that its customers get the best quality. They are committed to this course such that when little improvement is realized, they change the strategy to one that can produce a significant result. Besides, the results used for change are collected directly from the customers.

Q2.  Prevention cost: The new process has set up a process through which information reaches all individuals in the organization through an intranet. This will ensure that the employees are well informed and prepared to serve the customers effectively thus eliminating any costs that may be incurred to prevent customer dissatisfaction, which, in this case, is the standard of quality measurement. Besides, monitoring and evaluation ensure continuity of high-quality service provision thus eliminating any future failures and saving on cost for preventing such failures.

Appraisal Cost: The new process will ensure that the workers are only involved in the provision of quality services to the customers as recommended in the Six Sigma team reports instead of inspecting the workplace themselves. Besides DMAIC ensures that there is a control system put in place to ensure continuity of the improved version of service delivery in Starwood. In this way, the organization will save any cost that may be incurred in a trial and error process aimed at identifying the best services.

Internal failure cost: The improved quality of services and assured continuity through the monitoring and evaluation process will ensure that customers are satisfied, thus eliminating any loss that may be incurred to when poor services are provided to customers.

External failure costs: there is minimal to zero possibility of a customer rejecting the hotel, giving it negative publicity, or requesting for a refund due to poor quality services. This is because the new process will ensure the continued provision of quality services to ensure all customers’ needs are satisfied.

Q3. Formalized methods such as Six Sigma are expensive and time-consuming. For instance, Starwood will spend a lot of money to monitor and evaluate the system for the next twelve to eighteen months. Besides, quality maintenance standard consumed a lot of money and time in the processes of Defining, Measuring, analyzing, Improving, and controlling. Additionally, the organizations need to train their employees to use models such as Six Sigma because most people lack the essential knowledge required for implementation. There are strategies that organizations such as Starwood may use to maintain quality. For example, organizations can use the lean method. This involves identifying practices that are not valuable to the customers and eliminating them to improve customer satisfaction. This is simpler because it does incur any cost. It uses the concept of opportunity cost to enhance the customer experience. Besides, it uses a tool known as Kaizen that ensures continued quality improvement by always removing irrelevant products and services that do not impact customers positively. Another method that Starwood and its competitors may use is ISO 9000 which ensures continuous quality improvement y providing the basis through which customer needs should be met.