Kaizen Lean Assessment Audit

1
Welcome to Audit
KAIZEN/ Lean Assessment
June 24-27, 2013, Abuja
2
Agenda

1. Management Priorities
2. Highlights
3. Some Metrics
4. Way Forward
5. Potential Benefits
6. Q A

3
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, RM)
5. Improve employee morale and engagement in
   continuous improvement

4
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
Employee Issues
6
Employee Conversation 1 Kitchen, Supervisor, 9
years (7 years permanent)

• Problems in serving guests
• Too many casuals Unhappy that they are not
  permanent employees despite 7 years work
• Shortage of pots Most are aged, some shapes are
  not compatible with flat-plate induction-cookers.
  Often, the same pot has to be rewashed by the
  cook
• Frequent Equipment breakdowns Induction cookers
• Often 6-7 items requested by guests are not
  available (ex meat items, sausages up to 1
  week plantains )

• Personal/ Staff issues
• Reduced Medical care This has been cut down by
  50 for permanent staff, very de-motivating for
  most staff
• Unreliable Transport Staff are often late, buses
  break down frequently. People are bundled into
  one bus and are fatigued (standing) by the time
  they arrive
• No Career growth No promotion, should have been
  a manager by now there is favouritism in
  management
• Training No opportunity for external training
  (highly valued) only people with senior contacts
  get the chance
• Increasing Workload Team members who have left
  are not replaced

• Food wastage
• Waste of expensive, imported food items is as
  high as 15 (chiefly due expiry date)
• Raw food wastage (local) is about 5

• About being a member of the Hilton Team
• The experience gained here is really good,
  especially in the aspect of guests relations

7
Employee Conversation 2 Kitchen, 3rd Commiss,
12 years (11 years permanent)

• Problems in serving guests
• Quite often items that guest require are
  exhausted (vegetables)

• Personal/ Staff issues
• 4 years ago motivation was high, equipment was
  replaced, new uniforms and boots were provided
• No opportunity for promotion
• Medical care is cut down to half
• Dental care is not included in medical
• Transport if often late reaches at my pick-up
  point at the time I am supposed to start work
• Casuals are generally unhappy at still being
  casuals (some for 18 years)

• Food wastage
• There is food wasted due many casuals and lack of
  skills in right first time cooking
• Also, casuals - because they are not happy - do
  not care and waste food during cooking

8
Employee Conversation 3 F B, Supervisor, 18
years (9 years permanent)

• Problems in serving guests
• Often (appx 5 of the time) food that the
  customers order is not available.
• Not enough training is provided to the staff, and
  as a result the skill level varies from
  individual to individual.

• Personal/ Staff issues
• Reduced Medical care 100 medical cover to was
  promised but not delivered
• Unreliable Transport Staff are often late, buses
  break down frequently. People are bundled into
  one bus and are fatigued (standing) by the time
  they arrive
• Employees do not have a sense of belonging as
  their efforts sometimes go unrecognised.
• Increasing Workload Team members who have left
  are not replaced
• Poor condition of mens changing room
  highlighted.

• About being a member of the Hilton Team
• Experience has taught a lot about guest relations
  and making people happy.

9
Highlights Some overall observations

• Strengths
• Clarity of Top Management OE vision and direction
• Strong customer orientation and focus
• Open, progressive management team
• 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

10
Some Gemba Observations
11
Stores
Disorderly storage difficult to retrieve material
12
Kitchen and Laundry
Cluttered Workspace difficult to maintain FIFO
(First-in First-out) in cold-store
13
Operating Cost Break Up
Operating Cost Break-Up
Operating Cost Break-Up as a of revenue
14
Cost Break Up - Utilities
Energy Cost Break-Up
15
FB Revenue Break Up
Food Revenue Break-Up.
35 - Food cost as a of revenue
Beverage Revenue Break-Up.
19.5 - Beverage cost as a of revenue
16
Food and Beverage Daily Covers
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)
17
Customer Complaints
Source of customer complaints
BTQ/Events customer complaints
18
Customer Complaints
Business centre complaints
Housekeeping complaints
Laundry complaints
19
Guest Waiting/ Room Turnaround Time (Room TAT)
Room TAT for Last guest check-out time ? Next
guest check-in time for a specific room
18 data points from front office
Average 0512
Median 0502
Min 0041
Max 1147
Large variation observed
20
(No Transcript)
21
Inventory and Consumption Analysis - Food
  No.of Items Inventory Value (NGN)  
NON-MOVING ITEMS NON-MOVING ITEMS NON-MOVING ITEMS NON-MOVING ITEMS
Items with no consumption in Jan-Dec 2012 55 1024958 2
SLOW MOVING ITEMS
Items with stock of gt365 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
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
22
Inventory and Consumption Analysis General Store
No. of Items Inventory Value (NGN) of Total Inv Value
SLOW-MOVING ITEMS SLOW-MOVING ITEMS SLOW-MOVING ITEMS SLOW-MOVING ITEMS
Items in stock, but no demand in May 2013 232 44,642,826 34
Items with stock gt 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  
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
23
Technical Services
24
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
• SAFETY EQUIPMENT SYSTEM 9
• SECURITY CCTV TV, MUSIC SYSTEM 20
• ELECTRICAL SYSTEM EQUIPMENT
• ROOF TOP 13
• EXECUTIVE FLOOR 7
• GUEST ROOMS / CORRODOR 9
• FRONT OF HOUSE (Health Centre) 1
• PUBLIC AREAS 8
• FB OUTLETS 12
• BACK OF HOUSE 5
• LANDSCAPE FAÇADE 9

Source Study conducted by Chief Engineer
25
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

26
Laundry, Kitchen Critical Equipment

• LAUNDRY
• DRY CLEANING EQUIPMENT
• WASHING MACHINES
• FLAT BED DRYER

KITCHEN (Data being listed by team)
27
Buses Maintenance Expense Jan-May 2013 and
Forward Estimate
Note Excludes 5 new buses 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
28
Kaizen Approach
29
Create Employee Engagement
30
People Development People Involvement at all
Levels
Top Management
Management Problems and Standards
Innovation
Middle Management Supervisors
Supervision Problem and Standards
Improvement
Employees Operators, Staff
Gemba Problems and Standards
Maintenance Standard Work
Development through KAIZEN action involving
everybody

• Value Stream or Pull Flow Projects
• Gemba Kaizen Workshops
• 5S and Other Daily Kaizen Activties.

31
Improve Physical Workplace
32
5S Campaign
33
Steps in the 5S Campaign
office
34
5S Examples
Good organization with labeling and marking for
ease of retrieval
35
5S Examples
First-in First-out (FIFO) storage
Tools organized in shadow boards for ease of
identification and retrieval
36
Create Flow through Waste Elimination
37
Value Add Waste
5
Value Adding (VA)
35
Necessary for VA, but still NVA
Non Value Adding (NVA)
60
WASTE
38
Muda Elimination Definition
Any activity the customer is not prepared to pay
for! Taiichi Ohno
39
The 7 Flow Mudas in Production
All we are doing is looking at the time line
from customer order to cash collection And we
are reducing that time line by removing the
non-value-added wastes (Ohno, 1988)
Many good American companies have respect for
individuals and practice Kaizen and other Toyota
tools. But what is important is having all the
elements together as a System (Fujio Cho,
President of TMC)
People Waiting
Defects Scrap
Material Waiting
Material Moving
People Moving
Too Much Production
Too Much Processing
Good Energy goes directly to the bin!
40
The 7 Flow Mudas in Administration

• Value Adding Work
• Information Processing (transforming information
  into useful service)

• Muda
• Over Information
• Information Waiting
• Information Transport
• People Waiting
• People Movement
• Over Processing of Information
• Defects (rework)

41
Eliminate Waste Value Stream Mapping
Map end-to-end processes, identify eliminate
Muda
End
Start
Process
Benefits
Reduced Lead Time
42
Implement Total Productive Maintenance
43
Total Productive Maintenance Utilities, Laundry,
Kitchen areas
44
Initiate TPM through Pillar 2 Steps 12 of
Autonomous Maintenance
Independent servicing and care of machine and
plant by the operator
7
Full use
Use of Autonomous Maintenance
Deepen knowledge of servicing and corrective
maintenance
6
Standards to ensure process
Independent servicing according to check
lists and plans
5
Independent servicing by operator
Develop knowledge of machíne construction and
its working Skills training skills for
independent servicing
4
Train employees for independent servicing
Use of checklists Visual management at
machine Surroundings (standards for cleanliness
and neatness)
3
Standards for cleaning and servicing
Eliminate leakage Improve access to check
points Eliminate sources of dirt and
contamination
2
Prevention of dirt, improvement of servicing
Basic cleaning, lubrication Marking of
defects Restore condition
1
Cleaning is checking !
Basic cleaning of machine and plant
Source JIPM (Japan Institute of Plant
Maintenance)
45
Eliminate Equipment Losses
Types of Losses that affect Equipment O.E.E.
Overall Equipment Effectiveness
Breaks
Planned
Maintenance / Cleaning
Training
Availability Losses
Break downs / Repairs
Production change over
Unplanned
Tool change / Adjustments
Cycle slow than Takt
Micro stops lt10 min
PerformanceLosses
Empty Runs
Start up / Shut down
Quality Losses
Errors / Defects
Scrap
Rework
Effective Utilization
46
Sensitize Middle Management, Supervisors,
Workforce throughKaizen Basics Training
47
The Continuous Improvement Paradigm - Kaizen
Foundations Model
LONG TERM COMPANY VALUE
S u p p l i e r s
C u s t o m e r s
W.C.P.
W.C.P.
5 Fundamental Principles, Values and Beliefs that
support Continuous Improvement
48
8 Step Gemba Kaizen Implementation Methodology
49
GKW 8 STEP METHODOLOGY
Define Project Scope
Scope Sheet
P L A N
Before GKW
Go to Gemba, observe collect data
Before Kaizen To Do List
Before GKW
Analysis and Kaizen Targets
Target Sheet
During GKW
Decide Kaizen Action Plan
Kaizen Action Plan
During GKW
D O
Execute Kaizen Action Plan
Next Action Plan
During GKW
C H E C K
Evaluate Improvement
During GKW
Result Summary
A C T
Prepare new Standards
After GKW
Follow-up, Audit Sustain
Audit Sheets
After GKW
50
Scope Sheet
Project Title 5S at .....................
Company Name
Gemba
GKW Dates
Preliminary Objectives



Team Name Members (L-R)
Current Situation Target
Concerns / Issues Needing Attention





51
Sharing Success A3 Story
52
4 steps in the problem solving process
53
Continuous Improvement
54
Process and Results SDCA / PDCA Wheels
Results
Process before introduction of standards
Process after introduction of standards Process
is more stable, deviations smaller
After improvement, the process is on a
higher level, but not yet stable
Stable process on higher level after improvements
S Standardize D Do C Check A Act
P Plan D Do C Check A Act
Time
Data collection analysis
Data collection analysis
Data collection analysis
Data collection analysis
55
Elements of Kaizen Structure
(2) Vision and steps
I MP RO V EME N T

(10) Steering Committee
(9) Communication
(7) Problem solving

(6) Measured results
(8) Calculation of gains
(5) Activities
background
(4) Instruction and Training
Today
(3) Resources
(1) Policy
TIME
56
Nichijo Gemba Kanri
Focus on Process Process Produces Result
Stabilization
57
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 FB Costs as a percentage of FB Revenue
• Reduce inventory of slow moving items

58
Roadmap Benefits
59
TENTATIVE ROADMAP PHASE 1 (1/3)

• 18 Month engagement, consisting of
• Start-up Activities
• Transformation Actions (Implementation in Gemba)
• Actions to Sustain improvements

START UP ACTIVITIES
INITIATIVES AREA MEANS OUTCOME Month 1 Month 1 Month 1 Month 1 Month 2 Month 2 Month 2 Month 2 Month 3 Month 3 Month 3 Month 3 Month 4 Month 4 Month 4 Month 4 Month 5 Month 5 Month 5 Month 5 Month 6 Month 6 Month 6 Month 6 Month 7 Month 7 Month 7 Month 7 Month 8 Month 8 Month 8 Month 8 Month 9 Month 9 Month 9 Month 9 Month 10 Month 10 Month 10 Month 10 Month 11 Month 11 Month 11 Month 11 Month 12 Month 12 Month 12 Month 12 Month 13 Month 13 Month 13 Month 13 Month 14 Month 14 Month 14 Month 14 Month 15 Month 15 Month 15 Month 15 Month 16 Month 16 Month 16 Month 16 Month 17 Month 17 Month 17 Month 17 Month 18 Month 18 Month 18 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 ManagementKPO 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                                                                                                                                                
60
TENTATIVE ROADMAP PHASE 1 (2/3)
TRANSFORMATION ACTIONS
INITIATIVES AREA MEANS OUTCOME Month 1 Month 1 Month 1 Month 1 Month 2 Month 2 Month 2 Month 2 Month 3 Month 3 Month 3 Month 3 Month 4 Month 4 Month 4 Month 4 Month 5 Month 5 Month 5 Month 5 Month 6 Month 6 Month 6 Month 6 Month 7 Month 7 Month 7 Month 7 Month 8 Month 8 Month 8 Month 8 Month 9 Month 9 Month 9 Month 9 Month 10 Month 10 Month 10 Month 10 Month 11 Month 11 Month 11 Month 11 Month 12 Month 12 Month 12 Month 12 Month 13 Month 13 Month 13 Month 13 Month 14 Month 14 Month 14 Month 14 Month 15 Month 15 Month 15 Month 15 Month 16 Month 16 Month 16 Month 16 Month 17 Month 17 Month 17 Month 17 Month 18 Month 18 Month 18 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                                                                                                                                                
61
TENTATIVE ROADMAP PHASE 1 (3/3)
ACTIONS TO SUSTAIN CONTINUOUS IMPROVEMENT
INITIATIVES AREA MEANS OUTCOME Month 1 Month 1 Month 1 Month 1 Month 2 Month 2 Month 2 Month 2 Month 3 Month 3 Month 3 Month 3 Month 4 Month 4 Month 4 Month 4 Month 5 Month 5 Month 5 Month 5 Month 6 Month 6 Month 6 Month 6 Month 7 Month 7 Month 7 Month 7 Month 8 Month 8 Month 8 Month 8 Month 9 Month 9 Month 9 Month 9 Month 10 Month 10 Month 10 Month 10 Month 11 Month 11 Month 11 Month 11 Month 12 Month 12 Month 12 Month 12 Month 13 Month 13 Month 13 Month 13 Month 14 Month 14 Month 14 Month 14 Month 15 Month 15 Month 15 Month 15 Month 16 Month 16 Month 16 Month 16 Month 17 Month 17 Month 17 Month 17 Month 18 Month 18 Month 18 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. RR                                                                                                                                                
62
Potential Benefits (First estimates)