SVKM’s NMIMS SOHM (NAVI MUMBAI CAMPUS)

Principles of Operations Management

Students Handout / Notes

Session 5 – 25/08/23

1. Introduction to Just-in-Time and Lean Operations:

Just-in-Time (JIT):
• JIT is a production strategy that aims to minimize inventory levels and associated
carrying costs.
• It involves producing and delivering products or services just when they are needed,
neither too early nor too late.
• JIT helps reduce waste, lower costs, and improve efficiency.
Lean Operations:
• Lean operations go beyond JIT and encompass a broader set of principles for
minimizing waste and optimizing processes.
• Lean focuses on providing maximum value to customers while minimizing resources
and eliminating non-value-added activities.

2. The Toyota Approach:

• The Toyota Production System (TPS) is the foundation of lean thinking and practices.
• TPS was developed by Toyota and is known for its efficiency, quality, and continuous
improvement.
• Key elements of the Toyota approach include:
• Jidoka: Automation with human intelligence to detect defects.
• Just-in-Time (JIT): Producing only what is needed when it is needed.
• Kaizen: Continuous improvement through small incremental changes.
• Andon: Visual control systems to highlight problems.
• Poka-yoke: Mistake-proofing processes to prevent errors.

Here's how the Toyota Approach can be adapted for the hospitality industry:

I. Customer-Centric Service:
a. The Toyota Approach starts with a focus on customer needs. In hospitality, this
means understanding guest preferences, anticipating their needs, and
delivering personalized services.
b. Implement systems to gather guest feedback continuously and use it for
service improvement.
 II. Continuous Improvement (Kaizen):
a. Encourage employees to identify and address inefficiencies and service
bottlenecks.
b. Regularly review and optimize processes, such as check-in/out procedures,
room cleaning, and restaurant service, to reduce waste and improve guest
experiences.
III. Standardization and Consistency:
a. Develop standardized operating procedures for various tasks, such as room
cleaning, food preparation, and guest interactions.
b. Ensure that employees follow these standards rigorously to maintain
consistency in service quality.
IV. Just-in-Time (JIT) Principles:
a. Apply JIT concepts to inventory management to reduce food spoilage and
wastage.
b. Use reservation systems and real-time occupancy data to optimize staffing
levels in restaurants and hotels, ensuring that resources are allocated
efficiently.
V. Visual Management:
a. Implement visual cues and signage to guide guests and employees, enhancing
the guest experience.
b. Use visual management to quickly identify issues, such as maintenance needs
or supply shortages, and address them promptly.
VI. Cross-Functional Teams:
a. Create cross-functional teams involving housekeeping, front desk,
maintenance, and food service staff to collaborate on solving operational
issues.
b. Encourage team members to share insights and ideas for improvement.
VII. Error Prevention (Poka-Yoke):
a. Develop systems to prevent errors in bookings, billing, and guest requests.
b. Use technology, such as automated booking systems and error-checking
software, to reduce human errors.
VIII. Lean Inventory Management:
a. Apply lean principles to manage inventory efficiently in hotel restaurants and
bars. Ensure that stock levels are aligned with demand.
b. Minimize food and beverage waste by closely monitoring consumption
patterns.
IX. Waste Reduction:
a. Identify and eliminate waste in all aspects of hotel operations, from excess
energy consumption to inefficient use of cleaning supplies.
b. Implement recycling and sustainability practices to reduce environmental
impact.
X. Employee Training and Empowerment:
a. Invest in training programs to equip staff with the skills needed for exceptional
guest service.
b. Empower employees to make on-the-spot decisions to resolve guest issues,
within predefined guidelines.
 XI. Lean Events and Projects:
a. Organize Kaizen events or projects to tackle specific hospitality challenges,
such as reducing check-in times or improving room turnaround times.
b. Involve staff from different departments to collaborate on these projects.
XII. Customer Engagement:
a. Use CRM (Customer Relationship Management) systems to capture guest data
and preferences, allowing for more personalized service.
b. Engage with guests through loyalty programs and special offers, encouraging
repeat visits.

By implementing the Toyota Approach in the hospitality sector, hotels and restaurants can
achieve operational excellence, reduce costs, enhance guest satisfaction, and ultimately build
a strong and loyal customer base. It's essential to adapt these principles to the unique needs
and challenges of the hospitality industry while maintaining a relentless focus on delivering
outstanding guest experiences.

3. Supporting Goals:
• Lean operations support various organizational goals, including:
• Cost Reduction: By eliminating waste and inefficiencies.
• Quality Improvement: Through a focus on error prevention.
• Lead Time Reduction: Speeding up processes.
• Flexibility and Responsiveness: To meet customer demands.
• Employee Involvement and Empowerment: Encouraging team contributions.

4. Four Building Blocks of Lean Production Systems:

Product Design:
• Lean product design focuses on simplicity, standardization, and ease of
manufacturing.
• It aims to minimize complexity and facilitate efficient production.
Process Design:
• Lean process design involves streamlining workflows to reduce waste and delays.
• Techniques like value stream mapping help identify and eliminate bottlenecks.
Personnel/Organizational Elements:
• Lean emphasizes employee involvement, training, and empowerment.
• Teams are often cross-functional and encouraged to participate in problem-solving.
Manufacturing Planning and Controlling:
• Lean production planning involves aligning production with actual demand (JIT).
• Controlling processes includes visual management, kanban systems, and total
productive maintenance.
5. Lean Tools:
• Lean tools are techniques used to identify and eliminate waste and improve processes.
Some common tools include:
• 5S: A workplace organization method (Sort, Set in order, Shine, Standardize,
Sustain).
• Value Stream Mapping: Analyzing and optimizing process flows.
• Kanban: Visual cards or signals to control production and inventory.
• Poka-Yoke: Error-proofing methods.
• Kaizen Events: Short-term, focused improvement projects.

I. 5S in Hospitality:
a. 5S is a lean methodology aimed at organizing the workplace for efficiency,
safety, and effectiveness. In the hospitality sector, 5S can be applied as follows:
b. Sort: In hotels and restaurants, sorting involves decluttering and organizing
storage spaces. Remove unused items from storage rooms to free up space for
essential supplies. In the kitchen, regularly review and discard expired
ingredients.
c. Set in Order: Arrange items in a logical and efficient manner. In the front office
of a hotel, for example, keep frequently used forms and stationery within easy
reach for staff. In a restaurant kitchen, organize utensils and ingredients for
quick access.
d. Shine: Maintain cleanliness and hygiene. Regular cleaning schedules for guest
rooms, common areas, and kitchens are essential. Cleanliness is a fundamental
aspect of the guest experience.
e. Standardize: Create standardized procedures and checklists. In housekeeping,
develop cleaning checklists to ensure all tasks are consistently performed.
Standardized recipes in the restaurant kitchen help maintain the quality of
dishes.
f. Sustain: Ensure that the 5S practices are continually followed. Implement
training programs to educate employees about the importance of 5S and
involve them in maintaining these practices.
II. Value Stream Mapping (VSM) in Hospitality:
Value Stream Mapping is a tool for visualizing and improving processes. In hospitality,
it can be used in the following ways:
a. Guest Check-In Process: Map the steps from reservation to check-in. Identify
bottlenecks and delays. Streamline the process to reduce wait times and
improve guest satisfaction.
b. Food Service: Map the steps involved in preparing and serving meals. Analyze
the flow of orders, cooking, plating, and delivery. Optimize the process to
reduce wait times and food wastage.
c. Housekeeping: Create a value stream map of the room cleaning process.
Identify opportunities to reduce the time it takes to turn over rooms between
guests.
 III. Kanban in Hospitality:
Kanban is a visual management tool used to control inventory and workflow. In
hospitality:
a. Inventory Control: Implement Kanban systems in kitchens to manage
ingredient inventory. When a specific ingredient reaches a predefined
minimum level, it triggers a reorder, ensuring a continuous supply while
minimizing waste.
b. Housekeeping: Use Kanban boards to track the cleaning status of rooms.
When a room is cleaned and ready for the next guest, the board is updated,
allowing for efficient room allocation.
IV. Poka-Yoke in Hospitality:
Poka-Yoke refers to mistake-proofing or error prevention. In hospitality:
a. Reservations: Implement reservation confirmation and validation systems to
prevent booking errors, such as double bookings or incorrect dates.
b. Checklists: Use checklists for critical processes like event planning, ensuring
that no essential details are missed.

Example: Hotel Reservation System

To prevent errors in room bookings, a hotel implements a poka-yoke system. When guests
make reservations online, the system automatically cross-checks dates and room availability.
It prompts guests to confirm their selections before finalizing the reservation, reducing the
likelihood of booking errors.

V. Kaizen Events in Hospitality:

Kaizen Events are focused, short-term improvement projects. In hospitality:
a. Service Speed: Conduct a Kaizen event to improve the speed of restaurant
service. Involve staff in identifying bottlenecks and testing process changes.
b. Guest Experience: Organize Kaizen events to enhance the guest experience,
such as improving the efficiency of check-in/check-out procedures or refining
the room service process.
6. Transitioning to a Lean System:
• Transitioning to lean involves a cultural shift and systematic change.
• Steps may include assessing the current state, setting goals, training employees, and
gradually implementing lean principles.

Transitioning to a Lean System in the hospitality sector, requires careful planning and a
systematic approach. Here's a step-by-step guide with an example:

I. Step 1: Leadership Commitment and Training

Example: A luxury hotel chain in India decides to transition to a Lean System. The CEO,
along with top management, commits to the transformation. They attend Lean
leadership training programs to understand the principles and their role in the
process.
II. Step 2: Assess Current Operations
Example: The hotel conducts a thorough assessment of its current operations. They
identify bottlenecks, inefficiencies, and areas with high waste, such as food wastage
in the kitchen, overstaffing during non-peak hours, and long check-in times.
III. Step 3: Set Clear Goals
Example: The hotel sets specific goals, such as reducing food wastage by 20%,
improving check-in times by 30%, and optimizing staffing levels to save 15% on labor
costs.
IV. Step 4: Educate and Involve Employees
Example: The hotel conducts Lean training for all staff, from kitchen workers to front
desk personnel. They emphasize that every employee can contribute to Lean by
identifying and addressing inefficiencies in their respective areas.
V. Step 5: Implement Lean Tools
Example: The hotel starts implementing Lean tools:
a. 5S: Housekeeping staff declutter storage rooms, organize cleaning supplies,
and create standardized cleaning checklists.
b. Value Stream Mapping: The hotel maps the guest check-in process and
identifies opportunities to reduce wait times.
c. Kanban: In the kitchen, Kanban systems are introduced for ingredient
management.
d. Poka-Yoke: The reservation system is upgraded with error-prevention
features.
e. Kaizen Events: A Kaizen event focuses on optimizing the restaurant's order-to-
service process.
VI. Step 6: Measure and Monitor Progress
Example: The hotel tracks key performance indicators (KPIs) regularly. They use data
to measure the reduction in food wastage, improvements in check-in times, and labor
cost savings. Regular reviews help identify areas that need further attention.
VII. Step 7: Continuous Improvement
Example: The hotel promotes a culture of continuous improvement. Employees are
encouraged to submit improvement ideas, and regular brainstorming sessions are
held to address challenges and make further refinements.
VIII. Step 8: Customer Feedback Integration
 Example: The hotel actively seeks and values guest feedback. They integrate customer
suggestions into their improvement efforts. For instance, if guests consistently
mention long check-in times in reviews, the hotel's Lean team focuses on this aspect.
IX. Step 9: Expand Lean Principles
Example: Once the initial Lean initiatives show success, the hotel expands Lean
principles to other properties within the chain, spreading the Lean culture and
practices across the organization.
X. Step 10: Sustainability and Long-Term Commitment
Example: The hotel recognizes that Lean is not a one-time project but a long-term
commitment. They continue to invest in training, technology, and process
improvement to sustain the Lean culture.

Transitioning to a Lean System involves a holistic approach that encompasses leadership

commitment, employee involvement, systematic process improvement, and a continuous
pursuit of excellence. Over time, the hotel's Lean initiatives lead to cost savings, improved
guest experiences, and a more competitive position in the market.
7. Lean Services:
• Lean principles are not limited to manufacturing; they can also be applied to service
industries, including hospitality.
• Lean services aim to provide faster, more efficient, and higher-quality customer
experiences.
• Concepts like JIT scheduling, standardized processes, and continuous improvement
can enhance service operations.

Lean services have a significant scope for implementation and benefits within the hospitality
sector. By applying Lean principles to hospitality operations, hotels, resorts, restaurants, and
other service providers can streamline their processes, enhance customer experiences, and
improve overall efficiency. Here are some key areas where Lean services can be applied in the
hospitality sector:

I. Guest Services and Check-In/Check-Out:

a. Implement Lean principles to reduce check-in and check-out times, enhancing
guest satisfaction.
b. Use value stream mapping to identify bottlenecks in the guest services process
and optimize the flow.
II. Housekeeping and Room Turnover:
a. Streamline room cleaning processes to reduce turnaround times between
guests.
b. Use Kanban systems to manage housekeeping supplies efficiently.
III. Restaurant and Food Services:
a. Optimize kitchen workflows to reduce waiting times for diners.
b. Implement Lean principles in menu design, ingredient management, and food
preparation to reduce waste and improve quality.
IV. Inventory Management:
a. Apply Lean inventory management techniques to minimize food spoilage and
waste.
b. Use just-in-time (JIT) principles for supply ordering to reduce excess inventory
and associated costs.
V. Maintenance and Facility Management:
a. Create standardized maintenance procedures to ensure the upkeep of
facilities.
b. Use predictive maintenance strategies to reduce unexpected equipment
breakdowns.
VI. Customer Feedback and Improvement:
a. Collect and analyze guest feedback to identify areas for improvement.
b. Organize Kaizen events to address specific challenges and enhance service
quality.
VII. Training and Employee Empowerment:
a. Invest in Lean training for employees to equip them with problem-solving skills
and a continuous improvement mindset.
b. Empower employees to make decisions that improve guest experiences within
defined guidelines.
VIII. Reservation and Booking Systems:
a. Implement error-prevention techniques (Poka-Yoke) in reservation systems to
prevent booking errors.
b. Use Lean principles to optimize the reservation process for both guests and
staff.
IX. Customer Engagement and Loyalty Programs:
a. Tailor loyalty programs and offers to individual guest preferences, leveraging
customer data.
b. Apply Lean thinking to continuously improve the customer engagement
process.
X. Sustainability Initiatives:
a. Use Lean principles to reduce energy and resource consumption.
b. Implement eco-friendly practices to align with sustainability goals.
XI. Front Desk and Communication:
a. Standardize communication procedures to ensure consistent messaging to
guests.
b. Use visual management techniques to facilitate effective communication
among staff.
XII. Waste Reduction:
a. Apply Lean principles to identify and reduce non-value-added activities and
waste in various processes.
b. Implement recycling and waste reduction initiatives to minimize the
environmental impact.
XIII. Event and Conference Management:
a. Optimize event planning and execution processes to ensure smooth and
efficient operations.
b. Use Lean techniques to manage event resources and reduce costs.

The scope for Lean services in the hospitality sector is vast and can lead to tangible benefits
such as improved guest satisfaction, cost reduction, increased operational efficiency, and a
competitive edge in the market. Implementing Lean principles requires a cultural shift
towards continuous improvement, employee involvement, and a commitment to delivering
exceptional customer experiences.