Case Study # 3

Production & Operations Management

Quality at the Ritz-Carlton Hotel Company

( source : “Operations Management”- 5th edition by Jay Heizer and Barry Render )

Back ground
“Ritz-Carlton” was the first hotel company to win the “Malcolm Baldrige National Quality Award”.
The credential alone evokes images of luxury and quality as it is the heartbeat of the company. This
means a daily commitment to meeting customer expectations and making sure that each hotel is
free of deficiency.

In the hotel industry, guests buy an experience when they stay at the hotel and not products. Hence,
quality is difficult to quantify. Thus, creating the right combination of the elements to make the
experience stand out is the challenge and goal of every employee, from maintenance to
management.

Preparatory work done

Before applying for the Baldrige Award, company management undertook a rigorous self-
examination of its operations in an attempt to measure and quantify quality. Nineteen processes are
studied, including room service delivery, guest reservation and registration, message delivery and
breakfast service. This period of study included statistical measurement of process work flows and
cycle times for areas ranging from room service delivery times and reservations to valet parking and
house-keeping efficiency. The results were used to develop performance benchmarks against which
future activity could be measured.

The Targets set

With specific, quantifiable targets in place, Ritz Carlton managers and employees now focus on
continuous improvements. The goal is 100% customer satisfaction. If a guest’s experience does not
meet expectations, the Ritz Carlton risks losing that guest to competitor.

Employee at the heart of continuous improvement

One way the company has put more meaning behind its quality efforts is to organise its employees
into “self directed” work teams. Employee teams determine work scheduling, what work needs to be
done and what to do about quality problems in their own areas. Employees are also given the
opportunity to take additional training in hotel operations so that they can understand the
relationship of their specific area to the overall goals. Ritz Carlton believes that a more educated and
informed employee is in a better position to make decisions in the best interest of the organisation.

Questions for discussions

Team presentation
1. In what way could the Ritz Carlton monitor its success in achieving quality?
2. Why it might cost the Ritz Carlton less to “do things right” the first time?
3. What are the non-financial measures of customer satisfaction that might be used by the Ritz
Carlton?
4. Do you think that an employee could be a prime driver behind sustainable improvement ? If
yes, why?
Individual presentation
5. Do you see any learnings from Ritz Carlton useful in the service industry you work for?
6. What scope exists for your organisation?
7. How do you intend to achieve the improvement?

Case study presentation guide lines

1. Put up a big chart displaying KEY POINTS for audience’s reference
2. Form teams of 8-10 participants
3. Each team member to be a part of the presentation
4. Limit the power point presentation to 8-10 slides for team presentation and 2 slides for
individual presentation, with maximum of 50 words per slide
5. You may use appropriate animation, if need be
6. Make appropriate assumptions wherever there is no clarity
7. Focus on the questions for discussions
8. Make proper briefing of the case to the audience to take them on board
9. Total time allotted for the team is 30 minutes, including 5 minutes for QA
10. Total marks : 25 ( 15 for the questions above under team presentation and 10 marks for the
individual presentation ).

Prof. Devendra Asar

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