Case Study : Quality at the Ritz-Carlton Hotel Company

Ritz-Carlton. The name alone evokes images of luxury and quality. As the first hotel to win the Malcolm Baldrige National Quality Award, The Ritz treats quality as if 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 any deficiency.

In the hotel industry, quality can be hard to quantify. Guests do not purchase a product when they stay at the Ritz: they buy and experience. Thus, creating the fight combination of elements to make the experience stand out is the challenge and goal of every employee, from maintenance to management.

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 were studied, including room service delivery, guest reservation and registration, message delivery, and breakfast service. This period of self-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 housekeeping efficiency. The results were used to develop performance benchmarks against which future activity could be measured.

With specific, quantifiable target in place, Ritz-Carlton managers and employees now focus on continuous improvement. The goal is 100% customer satisfaction: if a guest’s experience does not meet expectations, the Ritz-Carlton risks losing that guest to competition.

One way the company has put more meaning behind its quality efforts is to organize wits 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. In order that they can see the relationship to their specific area to the overall goals, employees are also given the opportunity to take additional training in hotel operations. Ritz-Carlton believes that a more educated and informed employee is in a better position to make decisions in the best interest of the organization.

Questions:

1. In what ways could the Ritz-Carlton monitor its success in achieving quality? What exactly should they check? (Use your experience, common sense, and, if needed, assumptions – if using assumptions, state them explicitly.)

2. What actions do you expect from a company that intends quality to be more than a slogan?

3. How could control charts, Pareto diagrams, and cause and effect diagrams be used to identity quality problems at a hotel? Provide examples as needed.

4. What are some nonfinancial measures (minimum 4) of customer satisfaction that might be used by the Ritz-Carlton?

5. Develop a fish-bone diagram illustrating the quality variables for a customer who just checked in at Ritz-Carlton. Causes and sub-causes need to be identified.

6. Imagine one problem Ritz Carlton might be facing and explain the steps they need to follow in order to solve it. You need to use at least 2 quality tools and simulate figures if needed.