Ritz Carlton

RITZ CARLTON

Ritz Carlton has adopted a focus strategy to differentiate by offering high end services to an elite customer base. This allows the company to charge a premium for its services and provides greater brand recognition. Ritz Carlton's operations strategy is to proactively manage the quality of its services through TQM with a view toward achieving a high level of service excellence. The operations strategy supports the business strategy by proactively reducing service related problems before they are necessarily seen in financial results.

The data indicates that quality problems are heavily concentrated in a particular area – ‘Room Clean'. There are 14 specific days when the defects are particularly out of control. These days are highlighted in the attached analysis. With respect to the room clean defect only, there are 8 days out of control. Looking at room clean defects by day and total defects as a percent of occupancy indicates that weekends (especially) Sunday are the days most likely to result in a higher number of defects. The most significant defects on the out of control days are room clean and reservation incorrect. Of the two, the room clean defect appears more significant as these defects are spread throughout the out of control days. The reservation incorrect defects are mainly focused on one out of control day (March 12th) where there were 14 reported defects due to incorrect reservations. While this is a problem, it does not appear as a defect with the same consistency as the room clean issues.

Based on these numbers and an analysis of the 14 out of control days we would focus on reducing room clean defects. 34% of total defects and 24% of defects on out of control days are attributable to room cleanliness. Reducing these numbers would significantly reduce Ritz Carlton's overall defect summary.

The ‘room clean' category is a general category that encompasses many different defects; hence there is more room for error. Some of the problems reported can be attributed to a late checkout by a previous guest. The staffing levels of the cleaning services may be too low to complete the job in a limited timeframe.

Additional data that may be helpful in further analysis would be data about room clean defects locations (focused in specific locations/floors), staffing levels of the cleaning crew related to room clean defects reported and overall process of the housekeeping service. Also useful would be information about the overall process where the various defects would occur and the cost required to reduce each type of defect (i.e. are there some defects that can be corrected with very little/no cost or workload impact?).

Initiatives that Ritz Carlton took between 1992 when it won the Malcolm Baldridge award for the first time and 1999 when it was awarded the second time included the 6Ps concept, guest recognition departments and use of the CLAS database, and senior leadership continued involvement with a structured approach (seven specific objectives). The 6Ps concept consists of: (1) Problem or need of customer; (2) Product; (3) Promises (what it can do for customer); (4) Personal Advantage; (5) Positioning; (6) Price/Value. These concepts were the groundwork of Ritz Carlton's process design. In addition to this concept that focused their design efforts, Ritz Carlton also created guest recognition departments and a new database (CLAS) to track customer preferences rather than just tracking defects. With this process, Ritz Carlton could remember guest preferences for its over 800,000 customers.

In order to improve its operations strategy, Ritz Carlton should standardize its DPQR analysis process. The analysis should include more sophisticated techniques like the p-charts rather that just the currently used pareto charts. Should also ensure that the defect data is entered timely in order to quickly identify and resolve any problem trends. Some of the data in the sample study was entered almost 3 weeks after the defect date. If the data had shown a significant problem that needed to be resolved, management would have been 3 weeks later in correcting.