Kaizen Lean Assessment Audit
- 1. 1 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Welcome to Audit KAIZEN®/ Lean Assessment June 24-27, 2013, Abuja
- 2. 2 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Agenda 1. Management Priorities 2. Highlights 3. Some Metrics 4. Way Forward 5. Potential Benefits 6. Q & A
- 3. 3 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Top Management Direction: OE Imperatives for BE 1. Improve Customer Satisfaction: Room supplies; Food variety, quality & service 2. Upgrade facility and guest amenities for improved guest perception of VFM 3. Reduce procurement lead time & delivered item cost 4. Reduce % Operating Cost (Food, Energy, R&M) 5. Improve employee morale and engagement in continuous improvement
- 4. 4 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Management Priorities & Challenges Customer value • Improved customer experience, satisfaction • Reduced Room turnaround time /Smooth Guest check-in • Improved Room Service delivery -quality performance • Timely availability of Room supplies • Timely approval, procurement & product availability • Service delivery for short-notice events Shareholder/ Management value • Reduced % Food cost • Reduced Repairs & maintenance bill • Lower overall operating cost • Reduced energy bills • Replacement of aged equipment & infrastructure Employee engagement (issues) • Improved safety & security • Ownership, flexibility, openness to new learning • Availability of buses • Team deployment and efficiency • “One voice” in THTSL Other issues • Management of traffic flow and parking • Training & support for IT • Reduction in “left behinds” • Real time guest feedback
- 5. 9 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Highlights: Some overall observations Strengths: 1. Clarity of Top Management OE vision and direction 2. Strong customer orientation and focus 3. Open, progressive management team 4. Excellent property, great potential Challenges & opportunities: • Lack of “modern” guest amenities (wi-fi, TV, phone ..) • Need for room/ hotel infrastructure upgrade • Employee morale needs urgent address
- 6. 10 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Some Gemba Observations
- 7. 11 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Stores Disorderly storage; difficult to retrieve material
- 8. 12 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Kitchen and Laundry Cluttered Workspace; difficult to maintain FIFO (First-in First-out) in cold-store
- 9. 13 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Operating Cost Break Up Operating Cost Break-Up Operating Cost Break-Up as a % of revenue 0% 27% 24%19% 11% 10% 8% 2% PAYROLL COST OTHER EXPENSES INSURANCE, MGMT FEE AND OTHERS FOOD COST REPAIR AND MAINTENANCE COST ENERGY COST 16% 14%11% 6% 6% 5% 1% OTHER EXPENSES INSURANCE, MGMT FEE AND OTHERS FOOD COST REPAIR AND MAINTENANCE COST ENERGY COST BEVERAGE COST
- 10. 14 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Cost Break Up - Utilities Energy Cost Break- Up 32% 63% 6% FUEL ELECTRICITY WATER
- 11. 15 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute F&B Revenue Break Up Food Revenue Break- Up. 35% - Food cost as a % of revenue 15% 27% 58% 1% 0% 3% BREAKFAST FOOD REVENUE LUNCH FOOD REVENUE DINNER FOOD REVENUE SUPPER REVENUE COFFEE BREAKS REVENUE OTHER FOOD REVENUE Beverage Revenue Break-Up. 19.5% - Beverage cost as a % of revenue 14% 11% 26% 50% BEER REVENUE WINE REVENUE LIQUOR REVENUE OTHER BEVERAGE REVENUE
- 12. 16 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Food and Beverage – Daily Covers 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 Tue Thu Sat Mon Wed Fri Sun Tue Thu Sat Mon Wed Fri Sun Tue Thu Sat Mon Wed Fri Sun Tue Total Dinner Lunch High day-to-day variation in Lunch-Dinner covers (42 data points) Note: This trend needs to be viewed with Actual Lead Time for “short notice” banquets/ events (data recording needs to be initiated)
- 13. 17 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Customer Complaints 38.19% 28.95% 11.01% 7.28% 6.57% 4.80% 3.20% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% BQT/Events Business Center Laundry Housekeeping Engineering Concierge Room Service 45.12% 21.40% 18.60% 11.16% 1.86% 1.86% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% Internet X Luggage Down Safe Witness Internet Cable Chair Delivery Chair Removal Source of customer complaints BTQ/Events customer complaints
- 14. 18 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Customer Complaints 71.17% 28.83% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% Internet Down/Slow Internet Cable 35.48% 33.87% 16.13% 9.68% 4.84% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% Laundry Return Laundry wrong return Laundry Collect Laundry Missing Laundry Damage Business centre complaints Laundry complaints 0% 10% 20% 30% 40% 50% 60% 70% 80% Amenities Room Make Up Housekeeping complaints
- 15. 19 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Guest Waiting/ Room Turnaround Time (Room TAT) 0:00 2:24 4:48 7:12 9:36 12:00 14:24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 18 data points from front office Average 05:12 Median 05:02 Min 00:41 Max 11:47 Large variation observed Room TAT for Last guest check-out time Next guest check-in time for a specific room
- 16. 20 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute
- 17. 21 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Inventory and Consumption Analysis - Food NGN TOTAL CONSUMPTION (2012) 800,539,217 AVE DAILY CONSUMPTION 2,193,258 INVENTORY ON HAND (AS ON MAY 31ST 2013) 41,036,811 INVENTORY COVER (DAYS) AT 2012 CONSUMPTION RATE 19 Days No.of Items Inventory Value (NGN) NON-MOVING ITEMS Items with no consumption in Jan-Dec 2012 55 1024958 2% SLOW MOVING ITEMS Items with stock of >365 Days 25 4038938 10% Items with stock between 100 to 365 Days 41 2358256 6% Items with stock between 30 to 100 Days 82 16818764 41% MOVING STOCK Items with stock between 7 to 30 Days 77 14548844 35% Items with stock between 2 to 7 Days 18 2147828 5% Items with stock between 1 to 2 Days 16 197233 0% Items with no inventory in stock 123 0 0% Total Items 437 41,134,821 57%
- 18. 22 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Inventory and Consumption Analysis – General Store TOTAL CONSUMPTION (MAY 2013) NGN 28,705,807 AVE DAILY DONSUMPTION (MAY 2013) NGN 925,993 INVENTORY ON HAND (AS ON MAY 31st 2013) NGN 130,757,095 INVENTORY COVER (DAYS) AT MAY 2013 CONSUMPTION RATE 141 Days No. of Items Inventory Value (NGN) % of Total Inv Value SLOW-MOVING ITEMS Items in stock, but no demand in May 2013 232 44,642,826 34% Items with stock > 365 Days 43 33,628,698 26% Items with stock between 100 to 365 Days 82 27,878,186 21% Items with stock between 30 to 100 Days 71 20,408,989 16% MOVING ITEMS Items with stock between 7 to 30 Days 33 4,063,518 3% Items with stock between 2 to 7 Days 8 134,696 0% No Inventory 31 182 0% Total 500 130,757,095
- 19. 23 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Technical Services
- 20. 24 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute “Ageing Infrastructure” SURVEY OF AREAS & TECHNICAL INSTALLATIONS: ‘A’ ITEMS ARE THOSE THAT HAVE EXCEEDED THEIR EXPECTED LIFE BY HILTON / INDUSTRY STANDARDS AREA ‘A’ PRIORITY ITEMS 1. SAFETY EQUIPMENT & SYSTEM 9 2. SECURITY: CCTV – TV, MUSIC SYSTEM 20 3. ELECTRICAL SYSTEM & EQUIPMENT 4. ROOF TOP 13 5. EXECUTIVE FLOOR 7 6. GUEST ROOMS / CORRODOR 9 7. FRONT OF HOUSE (Health Centre) 1 8. PUBLIC AREAS 8 9. F&B OUTLETS 12 10. BACK OF HOUSE 5 11. LANDSCAPE & FAÇADE 9 Source: Study conducted by Chief Engineer
- 21. 25 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Hotel: Critical Equipment (“Show Stoppers”) 1. GENERATORS 2. CHILLERS 3. STEAM BOILER / WATER CALORIFIER 4. MAIN WATER SUPPLY PUMP 5. FIRE PUMPS 6. WATER TREATMENT UNIT 7. FUEL SUPPLY PUMPS 8. BUSES 9. FUEL / GAS STORAGE TANKS 10.RELATED PIPING (etc) INSTALLATIONS
- 22. 26 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute LAUNDRY 1. DRY CLEANING EQUIPMENT 2. WASHING MACHINES 3. FLAT BED DRYER Laundry, Kitchen: Critical Equipment KITCHEN (Data being listed by team)
- 23. 27 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Buses: Maintenance Expense Jan-May 2013 and Forward Estimate Note: Excludes 5 new buses No. BUS NUMBER Exp: Jan-May 2013 (NGN) % of Total Jan- May Exp STATUS Est Repair Cost (NGN) 1 329 (MBO1721) 3,353,854 19.0 2 458 (MBO 1418) 2,564,260 14.5 . UNDER REPAIR 3 310 (MBO1721) 2,480,284 14.1 . UNDER REPAIR 4 911 (MBO1721) 2,162,660 12.3 . Needs New Engine . Body work 4,800,000 5 922 (MBO1721) 1,883,920 10.7 6 351 (MBO1721) 1,779,715 10.1 7 685 (MBO 1418) 1,075,894 6.1 8 424 (MBO1721) 975,955 5.5 9 459 (MBO 1418) 867,686 4.9 . Needs New Engine 4,200,000 10 352 (MBO1721) 257,250 1.5 . Needs New Engine 4,200,000 11 456 (MBO 1418) 232,455 1.3 . ON SCRAP LIST 12 687 (MBO 1418) Out of Operation . Needs New Engine 4,200,000 TOTAL 17,633,931 17,400,000
- 24. 57 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Key Initiatives – Phase 1 • Implement 5S in Stores, Kitchen, Laundry, Utilities and Parking • Streamline flow of Purchasing & Procurement process • Reduce Room Turn-around Time • Improve Delivery-Quality of Short-notice Events • Initiate TPM through Autonomous Maintenance of critical equipment in Technical Service, Kitchen, Laundry • Reduce Energy Consumption • Reduce F&B Costs as a percentage of F&B Revenue • Reduce inventory of slow moving items
- 25. 58 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Roadmap & Benefits
- 26. 59 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute TENTATIVE ROADMAP – PHASE 1 (1/3) START UP ACTIVITIES INITIATIVES AREA MEANS OUTCOME Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 START UP TOP & SENIOR MANAGEMENT CONCLAVE THTSL, Abuja Top/ Sr Mgmt Conclave Alignment and role clarity of key stakeholders in continual improvement journey 1 ESTABLISH OE INFRASTRUCTURE THTSL, Abuja . Kaizen Coordinator . Kaizen Promotion Office ESTABLISH HOTEL STEERING COMMITTEE THTSL, Abuja Senior Management +KPO Top/Sr Mgr Sponsoship established for direction, support & review of improvement activities KAIZEN BASICS TRAINING THTSL, Abuja Class Room + On the job taining All participants those who will be part of execution team 18 Month engagement, consisting of: 1. Start-up Activities 2. Transformation Actions (Implementation in Gemba) 3. Actions to Sustain improvements
- 27. 60 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute TENTATIVE ROADMAP – PHASE 1 (2/3) TRANSFORMATION ACTIONS INITIATIVES AREA MEANS OUTCOME Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 TRANSFORM (Theme) REDUCE PROCUREMENT LEAD TIME GENERAL STORES: - Approval process - Order to Delivery process TFM Tool Box . Current State Map . Future State Map . Specific projects IMPROVE STORE ITEMS AVAILABILITY . Food store . Gen store . Room supplies Inventory Management (PFEP) . Reduced stock outs . Controlled nventory IMPROVE WORKPLACE . Stores: Gen, Food, Wine . Kitchen, Laundry . Utilities, Car Parking 5S . Reduced Search time . Space freed up . Improved productivity IMPROVE MACHINE UTILISATION . Kitchen . Laundry . (Utilities) Autonomous Maintenance (Steps 1 & 2) . Reduced downtime . Reduce Maintenance cost REDUCE ENERGY CONSUMPTION . Hotel LOSS TREE ANALYSIS . Reduced Energy Cost REDUCE ROOM TURNAROUND TIME . Housekeeping TFM Toolbox . Reduced Customer Wait time REDUCE FOOD COST AS % OF FOOD REV . Food LOSS TREE ANALYSIS . Reduced Food Wastage
- 28. 61 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute TENTATIVE ROADMAP – PHASE 1 (3/3) ACTIONS TO SUSTAIN CONTINUOUS IMPROVEMENT INITIATIVES AREA MEANS OUTCOME Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 SUSTAIN INITIATE DAILY MANAGEMENT ALL OPERATING AREAS NGK . Consistancy of results . Quick Response to Problems . Daily Accountability Certified Kaizen Practitioner ALL FUNCTIONS CKP Training . 25 Kaizen Trained Internal Resources PHASE I PROGRESS REVIEW KI + Co Kaizen Audit . Phase II Roadmap KAIZEN PROMOTION KI + Co . Setup KPO . Setup Obeya Room . Communication . R&R
- 29. 62 KAIZEN and GEMBAKAIZEN are the trademarks of KAIZEN Institute Potential Benefits (First estimates) No. Particulars Current State Future State/Benefits Annualised Savings (Est) 1 5S - Workplace Organisation Cluttered . Reduced Search Time . Improved Productivity . Space Freed Up 2 Purchase & Procurement process flow improvement (TBD) . Reduced Lead Time . Improved item availability . Lower Inventory 3 Food & General Stores Inventory Management 31-May-13 Stock ~ NGN 170,000,000 . 35% Reduction in Wrkg Cap . Freshness: First-in, First-out . Space released . Improved productivity $55,000 4 Autonomous Maintenanace (Steps 1&2) High Breakdowns, Low Utilisation . Improved Equipment Availability . 10% cost reduction $472,000 5 Spares Inventory Management Non-Availability Of Critical Spares . Quicker Mean Time to Repair (MTTR) 6 Improve Service Response Time Low Customer Sat . Repeat Customers 7 Reduce Energy Costs (% of overall Rev) 5% of Revenue . 5% lower cost $195,000 8 Reduce F&B Costs (% of F&B Rev) Food:35.5% of Food Rev Beverage:19.5% of Bev Rev F:33.3% & B:18.9% $350,000 9 Steering Committee and KPO Sponsorship, Direction and Support10 Obeya Room KPI Management and Control 11 Certified Kaizen Practitioner Internal Expertise for Kaizen Savings: ~ US$1,072,000 PROCESS & SYSTEM IMPROVEMENTS SUSTENANCE & INTERNAL CAPABILITY BUILDING