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QFD and Six Sigma in Service Application: A case of Ritz-Carlton

In a new effort to raise service level, some hotels are discreetly monitoring what customers do during their stay and recording it in shared computer systems, according to a recent article by Wall Street Journal Online.

“Capturing” is a new way for the hotel industry to collect customer data for service personalization. For example, the hotel may use the data from this opt-in activity to stock the customer’s favorite beverage in the in-room refrigerator before her arrival.

Delivery of such unexpected quality in service or product, as we call it ‘exciting quality’ in QFD, could certainly catch the customer’s attention. But for it to be effective, the baseline ‘expected quality’ must be fulfilled. This means rooms cleaned promptly, bathroom restocked, laundry returned on time, and so forth – the tasks that are typically performed by the hotel’s housekeeping.

One luxury hotel chain was insightful enough to realize this basic hotel service presented an opportunity for building stronger customer loyalty, a better bottom line, and competitiveness, creating an industry-wide paradigm shift. It was also one of the early examples of service QFD applications.

In 1992, the Ritz-Carlton Hotel Company set a company-wide Quality Goal of:

  1. Six Sigma;
  2. 50% Cycle Time Reduction; and
  3. 100% Customer Retention by 1996.

Toward this goal, each of the group’s hotels elected to champion a one-year research study on one of the critical processes that had been identified as vital to customers’ decision to continue patronage at their 30 properties worldwide. The Ritz-Carlton Dearborn in Michigan took on the process for “a clean, fresh, fully stocked guest room,” a process that could deliver better, faster, and cheaper housekeeping services within greater reliability.

A cross-functional team was formed comprised of Ladies and Gentlemen from Housekeeping, Laundry, Engineering, and Total Quality Management, with a goal of reducing cycle time by 50% and creating an error-proof, reliable process, which could be standardized company-wide for better customer satisfaction. The team’s first step was to make the existing process visible and establish baseline practice. Using both macro- and micro follow charts, the team members observed room cleaning and collected over 30 random samples which allowed them to identify the patterns of workflow, distance traveled in cleaning a gust room, average number of defects per room, item usage, and cycle times per task.

Ritz-Carlton housekeeping work flow

This process modeling QFD activity helped the team better understand crucial customer-supplier relationships. For example, they developed an unanticipated awareness that Housekeeping was Laundry’s primary customer even though it was easy for them to see Laundry as a major supplier to Housekeeping. The discovery was an important lesson because insufficient supply of linen and towels was a company-wide defect. Data indicated each room attendant wasted 30 to 45 minutes daily in tracking down needed supplies. Practices ranged from walking to the Laundry department from the guest floors to learn product availability to hoarding supplies to taking supplies from co-workers’ carts or linen closets.

The team also found that distribution of guest room supplies such as towels and linen to honor bar items and paper products was unreliable, resulting in mistakes, rework, breakdowns in process inefficiencies, variation, and discrepancies for honor bar billing. Waste due to this included lost labor dollars, wasted effort and travel, redundant work, and lost business. The Cost of Quality was calculated to exceed $460,000 annually for the entire Housekeeping system.

Because this study was conducted before Modern QFD was developed, this team resorted to building a classical House of Quality (HOQ) matrix in order to align customer requirements with supplier measures and to identify customer requirements.

We might point out that today, this same analysis could be done more efficiently and faster by using more agile and easier-to-use Modern QFD tools such as the Maximum Value Table and without building a HOQ.

The Ritz-Carlton team then used brainstorming and benchmarking to develop process options and conducted pilot processes to test and fine-tune the selected alternative process. Their process improvement resulted in:

The team also reported intangible benefits such as reduction in loneliness and monotony, increased job enrichment and teamwork, better communication between team members and between guests and team members, and stronger customer-supplier relationship between Housekeeping and Laundry.

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© QFD Institute / Glenn Mazur  


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