Cost Benefit Analysis Really Video Case
Please read the video transcript and answer the following prompt in 100-150 words. Here is the video transcript (couldn’t upload video)
Prompt: How did The Ritz-Carlton Hotel improve their customer satisfaction through quality improvement?
00:18>> >> Luxury, service, quality,
00:21>> these three words capture the essence
00:24>> of a stay at The Ritz-Carlton.
00:27>> Creating this atmosphere of refined elegance
00:29>> and relaxation may appear effortless to a guess
00:33>> but every employee at any
00:34>> of the company’s 31 worldwide locations will tell you,
00:38>> it takes a daily commitment
00:40>> to make the desired experience happen for each and every guest.
00:44>> >> The Ritz-Carlton Hotel is a place
00:47>> for the genuine caring comfort
00:48>> of our guest is our highest mission.
00:50>> >> We pledge to provide the finest personal service
00:53>> and facilities for our guests who will always enjoy a warm,
00:56>> relaxed, yet refined ambiance.
00:58>> >> The Ritz-Carlton experience enlivens the senses,
01:01>> instills well-being, and fulfills–
01:03>> >> Even the unexpressed wishes and needs of our guests.
01:07>> >> Winning the Malcolm Baldrige National Quality Award in 1992,
01:12>> represented a significant milestone in the company’s quest
01:15>> for quality achievement.
01:17>> Ralph Vick, general manager of the Phoenix Ritz-Carlton,
01:21>> participated in the 1992 application process.
01:24>> >> The preparation for the Malcolm Baldrige application was
01:27>> a very extensive one.
01:28>> It took us a few years to really figure
01:30>> out how we do this thing called Total Quality Management.
01:34>> And I think one of the things that we identified very early
01:36>> on was certain processes that were common throughout
01:40>> of out hotel, all of our hotels.
01:41>> For the very first time in our industry,
01:43>> we looked at how work are done.
01:45>> And through the process and process team management,
01:49>> we were able to discover some significant ways
01:51>> for improving our processes within our hotel.
01:55>> All of which had many ramifications.
01:58>> Most of them financial,
02:00>> but a lot of them had moral applications
02:05>> and really helped us take a look
02:07>> at how we were running our hotels with our people
02:10>> and had morale implications
02:13>> like getting our employees really prompt
02:15>> about getting the involved in the process.
02:18>> >> A list of 20 Ritz-Carlton Basics now guide each days
02:22>> efforts toward a company wide goal
02:24>> of 100 percent customer satisfaction.
02:27>> >> The basics play a very, very important role
02:29>> in quality primarily because quality in a lot
02:32>> of ways is a foreign subject in our industry so we have
02:35>> to break it down to the basics.
02:36>> One of the basics we refer
02:38>> to is a gentleman that we call Mr. Biv.
02:40>> And Mr. Biv is an acronym for mistakes, rework, breakdown,
02:45>> inefficiencies, and variation.
02:47>> And we call him Mr. Biv because he happens
02:49>> to be this little gentleman that runs around our hotel and all
02:52>> of our hotels from time to time and causes complexity
02:54>> and break down on our system.
02:56>> And through that simplification, we really are able
02:59>> to help our employees identify with what some
03:02>> of those defects are, and help relay and give us better answers
03:06>> and better input for how to get rid of Mr. Biv in our system.
03:11>> >> Achievement of quality at the Ritz-Carlton is monitored
03:14>> through a variety of mechanisms: customer surveys and letters,
03:18>> employee reports, and financial performance measures.
03:22>> When problems are detected, they are researched and evaluated
03:27>> so that appropriate action can be taken.
03:29>> >> Quality is monitored in our hotels on a daily, weekly,
03:32>> monthly, and yearly basis.
03:34>> Primarily daily and one of our tools that we have
03:36>> that we use is called the daily quality production report.
03:40>> And it is a conglomeration of a lot of information.
03:44>> It comes from all over the hotels such as comment cards,
03:48>> guest incident action form which is a tool that we have
03:51>> for detailing a guest incident if it happens,
03:56>> housekeeping reports, engineering reports,
03:59>> defect reports that are pulled in from our employees
04:02>> when they’re telling us what’s going wrong
04:04>> in their work environment on a daily basis.
04:06>> And with that information, we were able
04:08>> to identify what our top 10 defects are
04:11>> in our hotel per month for instance.
04:14>> And we can take a look at those top defects and project
04:18>> by project implement a plan for getting rid of that defect
04:24>> through use of our quality–
04:25>> and with the use of our quality tools.
04:27>> All our employees are trained in the TQM processes and one
04:31>> of the suggestions that we hear
04:33>> from them quite often are ideas for improvement.
04:37>> With those ideas of improvement come, in general
04:40>> and occasionally, a cost associated
04:42>> for what it’s gonna cost to do that improvement.
04:44>> And we have trained all our employees along
04:47>> with our management staff to take a look at using one
04:49>> of our quality tools, referred to as the cost benefit analysis
04:52>> for determining if that project is a worth while project or not.
04:55>> Sometimes, a great idea may be a wonderful idea,
04:58>> may add tremendous value to our customers feelings and business
05:03>> in our hotel but, unfortunately,
05:05>> it may not be a financially feasible product.
05:08>> And the use of our cost benefit analysis really enables us
05:13>> to determine whether that project
05:15>> or that idea is one worth implementing or not.
05:19>> >> In an industry where the word quality can be just a buzz word,
05:22>> Ritz-Carlton’s employees, working as a team,
05:26>> know they must be on their toes at every turn.
05:29>> >> Quality is on occasion a creative way of dealing
05:33>> with stress in a hotel particularly as it relates
05:35>> to self-directed work teams.
05:37>> When we teach and our employees learn traditional management
05:42>> responsibilities, they take on an awesome responsibility,
05:45>> a responsibility that in other industries
05:48>> and in other hotels they do not take.
05:52>> And they take it home with them, quite honestly.
05:54>> It’s an issue such as payroll and forecasting and scheduling
05:57>> when our employees are doing this traditional management task
06:01>> whereby they actually go home at night thinking
06:04>> about who’s not gonna show up for work tomorrow morning?
06:07>> So it does add a great deal of stress in the work environment
06:11>> and quite frankly, we know, through our studies
06:13>> and in other areas in other businesses that [inaudible]
06:16>> in particular self-directed work teams are not for every one.
06:19>> We know to expect casualties; some people do not operate well
06:24>> within a self-directed work team because in our industry,
06:28>> we traditionally manage from what we refer
06:30>> to as a command and control point.
06:33>> And in a self-directed work team,
06:35>> we realize that our [inaudible] has to relinquish
06:38>> that command and control.
06:40>> Well, that command and control is picked up by someone
06:42>> and it’s our employees.
06:44>> So it does create stress but most of our employees working
06:48>> for a career advancement and looking for education
06:51>> and looking to continue their own growth have been extremely
06:54>> receptive to the idea
06:56>> and we have seen our internal customer surveys,
06:58>> our employee opinion surveys improve greatly as a result
07:02>> of the implementation of total quality management
07:04>> and self-directed work teams.
07:06>> >> What’s the biggest quality challenge facing the
07:08>> Ritz-Carlton today?
07:10>> >> Quality is not a fad or a phase
07:12>> or a program [inaudible] here at Ritz-Carlton.
07:14>> It’s a way of life for us.
07:15>> We have very high expectations upon Ritz-Carlton by all facets
07:19>> from our owners, from our employees, and from our guests.
07:22>> And through TQM and the use of self-directed work teams,
07:25>> it will enable us to continue a path of continuous improvement
07:29>> and reach the levels
07:30>> that everyone expects from a Ritz-Carlton.
07:34>> [ Music ]