Develop Operational Plans

Learning Outcomes

�  Planning & strategies based on workplace monitoring

�  Develop scope and objectives of required initiatives based on business goals, staff and customer feedback

�  Identify and analyse internal and external factors that may impact on the plan

�  Consultation during the development of the plan

�  Develop administrative framework & systems to support planned initiative

�  Communicate priorities, responsibilities & timelines

�  Develop evaluation systems in consultation with colleagues

�  Develop internal & external communication strategies to keep all stakeholders informed

�  Develop appropriate and financially sound resource strategies

�  Planning for success

Organisations exist in order to achieve goals.  In order to be successful these goals must be:

�  Specific

�  Measurable

�  Achievable

�  Realistic

�  Time referenced

The overall goal of the organisation is usually expressed in its vision/mission statement

Mission statements

�  Refers to the core business of the company, general philosophy and customer service focus

�  Need to be concise and effective

Planning for success

�  Planning is the process of determining what steps you will take, when you will take them and how you will take them in order to achieve them

�  Business and strategic plans for a business have an external focus that with internal planning devices inform management of the outputs that will meet customer needs as well as achieve business goals

There are 4 basic management functions in an organisation:

�  Planning

�  Leading

�  Organising

�  Controlling

Without adequate planning these functions would be ineffective

Planning mechanisms related to these functions include:

�  Budgets and forecasts

�  Capacity planning

�  Manufacturing design and operations planning

�  Control processes

�  Facilities layout plans

�  Recording systems plans

�  Inventory Control

�  Resource requirement plans

�  Maintenance plans

�  Productivity plans

�  Plans for technological applications

�  Project plans

�  Planning for success- Why?

�  Enables the design & development of controlled and directed strategies

�  Reduces uncertainty  by helping  anticipate and manage the constant change in business environment

Planning enables you to:

�  Understand your customers and their needs

�  Understand your own strengths & weaknesses

�  Identify opportunities and threats

�  Exploit your strengths and opportunities

�  Resolve problems and alleviate threats

�  Take steps to  counteract your weaknesses

LACK OF PLANNING USUALLY LEADS TO FAILURE

FAIL TO PLAN, THEN YOU PLAN TO FAIL

Operational plans

These are your day to day action plans

Strategic plans are broken down to accommodate specific operational processes in all areas of your business operations.  Operational plans are internally focused and relate to:

1. Organisational structure
2. Management teams
3. Management gaps
4. Strategy implementation
5. Process designs
6. Control and design
7. Staffing, resource allocation, HR
8. Budgeting and forecasting within various departments

Let’s have a look at these operational plans and their implementation!

�  Planning and design processes

�  Planning processes determine your organisational needs and produce the outputs that meet your customer expectations

�  Organisational objectives should be designed to  achieve high performance with minimum variation

�  OPERATIONS MANAGEMENT IS THE PRACTICE OF MANAGING PRODUCTION.  PRODUCTIVITY IS THE RATIO OF QUANTITY & QUALITY TO THE LABOUR PER UNIT OF TIME

�  THE FOCUS OF OPERATIONS MANAGEMENT- PLANNING, SUPERVISING, CONTROLLING, MONITORING AND EVALUATING IS PRODUCTIVITY ORIENTED

�  Planning and design processes

�  Inputs are the resources and supplies that can be called upon to cater to a need and are essential for operations.

Resource management involves:

�  Recruitment of qualified managers and staff

�  Negotiating consultants for specific tasks

�  Negotiating with suppliers and other service providers

�  Monitoring inputs for consistency and quality

�  Ensuring resources are available and meet business and customer expectations

�  Planning and design processes

Constraints on operations can include:

�  Quality & quantities of supplies

�  Delivery times

�  Work processes and performances

�  System design and application

�  Labour shortages

�  Time inefficiences

�  Poor management

�  Ineffective communication

�  Inadequate training employee inductions

�  Financial constraints

�  Planning as a process

�  Planning and information

�  To design, develop and implement strategic and/or operational plans; and in order to direct the functions which will activate those plans, information must be reliable, consistent, sufficient, useable, timely and manageable

�  So what information do you need and where does it come from?

�  Internal sources supply information about…

�  Vision and mission

�  Goals and objectives

�  Current processes and their capabilities

�  Standards and organisational requirements

�  Variation

�  Waste, mistakes and rework

�  Levels of productivity

�  Individual performance

�  Employee skills and competencies

�  Financial issues

�  Safety issues or conditions

�  Organisational culture and health

�  Externally generated information

�  Customer needs, wants and expectations

�  Supplier needs, wants and expectations

�  Customer satisfaction levels

�  Owner expectations, issues or problems

�  Shareholder expectations, issues or problems

�  Local environmental impact issues/requirements

�  Legislative and regulatory requirements and change. Eg. OHS

�  Environmental scanning supplies information…

�  The economy

�  Market trends

�  Financial markets

�  Your competitors

�  Benchmarks

�  World’s best practice

�  Stakeholders

�  Environmental impact issues/problems or trends

�  Demographic conditions that relate to your business

�  Planning and information

�  Data[the raw input] is collected and converted, through analysis, into the information your organisation requires to develop it business activities and processes

�  Using information in the planning process can be shown by:

�  SWOT analysis

�  Flow charts

�  Gantt charts

�  Pert diagrams

�  Each of these tools can also be applied in organisational control processes

�  Key Performance Indicators[KPI’S]

�  An integral part of operation plans

�  A vital part of planning operations is identifying and determining work and performance standards

Measures and indicators include [amongst others]:

�  Establish & clarify standards so all staff know expectations

�  Enable measurement & comparison of performance against what is expected

�  Identifying successful operations areas

�  Identify areas for improvement

KPI’s are neither static nor immovable. 

�  What areas need performance measurement

�  Cost effectiveness of services

�  Actions that are directed to customer driven service/quality output

�  Effectiveness of processes and systems- capability, stability and performance

�  Team and individual work performances

�  Resource use

�  Waste, mistakes and rework

�  Supplier performance

�  Customer satisfaction

�  Business results

�  Budgetary performance- costs V outlay….profitability

�  Performance Measurement

�  Balanced scorecard K.P.I.’s

�  To effectively move from performance measurement to performance management, 2 key components need to be in place:

�  The right organisational structure

�  The ability to use performance measurement results to actually bring about change in the organisation

�  Advantages of balanced scorecard

�  Gap Management-  analyse, implement

�  Enhancing strategic feedback and learning - past-future

�  Benchmarking-  not identifying but learning best practices

�  Risk Management – risk and return balance

�  Leadership - strong, clear and concise

�  Communication - visibility and availability

�  Accountability –  who and what

�  Making performance measures more relevant –  link rewards, recognition and appraisals

�  Contingency Planning

�  Contingency planning implies contingency action!  These plans should identify issues of:

�  The nature or potential of the contingency

�  The operational impacts of the contingency

�  Feasible responses

�  Financial implications of the responses

�  The likely effects on other processes in the organisation

When looking at business activities contingency plans must show:

�  Understanding of the need for and application of the contingency plan

�  Awareness of the problems that might cause their activation

�  Understanding of organisational structures and planning processes

�  Awareness that pro activity is vital to ongoing business success

Who develops the contingency plans, how these plans are communicated and what situations might cause their need will be dependent on the workplace in which you work

Questions which also need answering include:

�  Are your plans are reactive or proactive?

�  How are the requirements of the contingency plans communicated to employees?

�  How is the withdrawal of the contingency plans communicated to the employees?

Administer and monitor operational plans

Learning outcomes

Implement and Monitor identified actions in accordance with agreed priorities

Provide support and assistance to colleagues involved in implementing the plan

Provide progress and other reports in accordance with enterprise requirements

Make assessment of the need for additional resource requirements and take appropriate action in accordance with enterprise policy

Supplies and Quality

At the planning stage of operations management the resources and the methods of acquisition are identified

Business should plans for capital expenditure, budgets, expense plans, resource policies, quality and inventory controls.

High quality production is dependent on the careful selection of both internal and external suppliers

Supplier selection

Selection needs to be based around

·         Cost

·         Timeliness

·         Quality

·         Risk

·         Control

·         Continuity

·         Consistency

·         Relationships

Your organisation is a resource dependant system- a group of interconnected parts and function- which together makes up the whole of the organisation.  These can include:

·         Human resources

·         Physical resources/raw materials

·         Policies & procedures

·         Finance processes

The aim of all organisations is 100% customer satisfaction

Relationships

Effective relationships must be built between each of these areas so that inputs are provided and then outputs are produced

People who work within the organisation form the internal customer- supplier chain

Quality and timeliness of supplies from external sources also require the application of suitable planning and management processes to ensure that you are able to provide the end product you have promised to the customer

Monitoring Waste

Every resource utilised by an organisation is a cost.  In order to reduce costs, resources must be used in the most effective ways……Use is maximised and expenditure minimised

Business should have in place:

1.          Effective inventory management systems

2.          Disbursement systems to enable resource tracking

3.          Cost management systems and budgets applicable to resource supply

4.         Waste monitoring areas

5.         Supply quality and costs

6.         Maintenance and unexpected downtime

7.         Staff turnover, absenteeism

8.         Process designs

9.         Production times

10.     Output quality

11.     Disbursement systems

12.     Security

13.     OHS

14.     Training, development and learning

15.     Inventory Management

This is the means by which resources are recorded and managed

Businesses generally try to minimise inventory held.  It is important that there is stock always available to meet demand

The amount of stock on hand must be balanced against the cost of running out of stock, loss of customers or the opportunity of investing in machinery and equipment

Ordering Supplies

Just in Time- (only carry enough inventory for production needs) - eliminates waste, needs to be highly integrated in approach

Fixed point re- ordering- ordering process activated when supplies reach a certain level.  Needs planning and forecasting

Fixed Interval recording - dependent on planning and forecasting   Amount of input ordered is dependent on stock held and forecast demand

 Economic Order quantity [EOE] - can be used to balance purchase quantity against ordering and carrying costs to determine the most economic ordering size

Economic Order Quantity [EOQ]

EOQ

The four costs involved in Inventory:

1. Purchase costs
2. Ordering costs
3. Carrying costs[storage, insurance etc]
4. Stock out costs[ goodwill, lost profits]

Let’s look to conducting an ongoing evaluation of our operational plans

Conduct Ongoing Evaluation

�  Learning Outcomes

�  Use agreed evaluation methods to assess effectiveness in the workplace

�  Involve all appropriate colleagues in the evaluation

�  Identify problems and make adjustments accordingly

�  Incorporate the results of evaluation into ongoing planning and operational management

�  Evaluating and Improving productivity

�  Controlled processes are an important part of our operational plans.  The two parts to this are:

�  Ensuring that controls enable workers to complete tasks and achieve objectives

�  Ensuring that control processes meet requirements. 

People are a very important part of these processes

Controls

�  Feed-Forward controls focus on the prevention of problems caused by inputs.  They monitor input quality to ensure standards are met

�  Concurrent controls use checks, observation, computer comparisons rejection devices so that substandard products are rejected as soon as identified

Controls

�  Feedback controls are post action controls.  Focus on end results and act as reviews of the operations process

Process controls link strategic plans to operations, provide feedback to management, evaluates gaps in performance, drives change and fuels improvements

�  Productivity

�  The best way to monitor productivity is to measure the level of customer satisfaction relative to the goods/services provided.  To increase productivity:

�  Decrease costs, supplies, rework, wastage

�  Improved product quality

�  Decrease processing time

�  Continuous process improvement

�  Improved/increased worker skills

�  Increased job satisfaction

�  Innovate and initiate a creative workplace

�  Productivity Improvement

Indicators include:

�  Output/input ratios/profit ratios

�  Quality indicators

�  Human resource indicators, employee satisfaction

�  Financial performance

�  Customer, shareholder, stakeholder satisfaction

�  Summary

�  Look for short and long term cost cuts and improvements

�  Assess organisational costs both internally and externally

�  Forecasting and Budgets

�  Forecasting means to plan in advance, to make predictions or statements regarding possible or probable future conditions

�  Utilising effective forecasting procedures organisations can predict trends, develop strategic plans and maximise its resources into the future

�  Forecasting and budgets are the tools which enable resources to be costed, monitored and supplied

�  Forecasting and Budgets

�  Budgeting is a forecasting activity which predicts future demand and the possibility of future events

�  Budgets provide information about needs, actions and progress on all levels of your organisation

�  Types of Budgets

�  Technological

�  Labour

�  Raw materials

�  Training

�  Sales

�  Operations

�  Capital expenditure

�  Advertising

�  Name some other budgets you would have in the hospitality industry

Budgets

�  Budgets are designed to maximise profitability and ensure a cash flow that will meet your financial obligations

Zero Based Budgeting

�  This method starts with the results the management wishes to achieve

�  Each expense is determined to be in the correct area, is there a need and whether it is a priority. It is time consuming

�  The value of zero based budgeting lies in the fact that it provides for review of all products, markets and activities

�  COSTS- Fixed over 1 year and variable

Life Cycle Budgeting

�  Presents total cost estimates for the life of a proposed project or function so that its commitment, size and impact on future budgets can be estimated

Budget Purposes

�  Budgets can be separated into operating budgets[already being done] and opportunities budgets[new activities, markets and functions]

Budget Purposes

�  Questions- Responsible Accounting

�  Financial Reports

�  A Thought……

Remember....if you fail to plan then you plan to fail

HOSPITALITY MANAGEMENT

Operational Systems and Procedures

�  Objectives

On completion of this chapter you will be able to:

�  plan and develop systems and procedures

�  establish systems and procedures

�  reviews systems and procedures

�  Systems and procedures

                In the hospitality industry, systems and procedures are developed for:

�  customer service

�  bar and restaurant duties

�  kitchen operations (including food safety)

�  housekeeping operations

�  cleaning and maintenance

�  Systems and procedures

�  office administration

�  reservations

�  quality assurance

�  security

�  stock control

�  occupational health and safety

�  Management model

�  Management model

                The role of the manager is to identify the need for specific systems and to develop detailed procedures for implementation.

                Planning involves developing goals, designing strategies to achieve the goals and developing detailed plans for goal achievement. Deciding who is responsible for each task and coordinating these efforts form the organising function of management. Leading entails training and motivating staff to ensure that they follow directions and attain the goals established by the manager or supervisor. Controlling involves checking performance against standards and targets.

Procedures

Procedures and checklists

Procedures - restaurant

                Restaurant service is broken down into six stages: taking the orders, preparing the food, serving the food, ringing up sales, closing the register and reconciling cash. This happens concurrently for many different customers.

                Staff members take responsibility for different tasks at each stage, for example, reconciliation at the end of the day’s trading. This would be carefully orchestrated by the manager or supervisor.

�  Procedures - catering

                Different styles of service require different types of operational procedures. For example, silver service is time consuming and requires extensive training of food and beverage employees. However, if the staff are well trained and procedures are developed to match this type of service, it provides a sophisticated, professional and impressive service experience for the diner.

                Cafeteria service, on the other hand, requires the development of clear, simple procedures, as there is likely to be more casual staff employed by this type of operation.

�  Productivity

�  Procedures - accommodation

                Systems and procedures are essential in the housekeeping department. Room attendants need to be notified as soon as a guest checks out so that the room can be cleaned and ready for reallocation as soon as possible. In some hotels, room attendants clean the same rooms all the time so that they take pride in ownership of the spaces for which they are responsible.

                Many hotel properties have a standard time allocation per room and productivity is closely monitored. However, this production-line approach does not encourage interaction with guests, which is an important role of the room attendant.

                Standard procedures must also be established for laundry, stocktaking of laundry supplies, and the issue and laundry of staff uniforms.

                The layout of hotel, resort and motel rooms contributes to operational efficiency. In larger resorts, buggies are necessary for the transport of linen supplies to various parts of the property. In well-designed tower blocks, linen and other housekeeping supplies are kept in a store on each level, avoiding the necessity to travel up and down the service elevator when items such as towels run out unexpectedly.

�  Procedures – Front Office

                In front office, attention to detail and accuracy are vital. From the time of reservation, a guest is served by a number of staff. For this reason, all special requests and other information must be documented. Procedures therefore need to be developed for all functions of front office. If procedures are followed, each guest will have a seamless service experience, even though he or she may have encountered a number of different employees.

Procedures are required in front office for:

�  Reservations

�  Reception

�  Portering

�  Concierge

�  Communications

�  Cashiering

�  Reviewing procedures

                The issue with procedures is that they often become entrenched, so much so that people never question them. This leads to employees doing the wrong thing really well. Everyone follows the procedure without question, never considering internal and external change.

                In the modern hospitality environment, it is essential to apply critical analysis to the systems and procedures that are in place in order to bring about changes for the better.

�  Procedures - automated

                An integrated computer system, generally known as a property management system (PMS), brings together all operational aspects of hotel management. (Similar systems are used for managing operations for other types of hospitality establishments.) It has been described as the beating heart of a hotel. It is used to gather information from all other computer systems in the organisation, such as temperature control, fire safety observations, folio calculations, stock counts – and even staff performance.