Lean services: a systems thinking approach for achieving operational excellence and quality improvement in the Irish hotel sector.

Abstract

The services economy is a significant element in the economic growth of most OECD countries, including Ireland (OECD 2012). Tourism is a key subsector of the services economy, with accommodation being a necessary component of the tourism product (Cooper et al. 2008). Hotels are one of the largest components of the accommodation sector within the Irish Tourism and Hospitality Industry (Melia and Robinson 2010). The environment in which Irish hotels operate is one of an increasingly competitive nature. The industry in recent years has been characterised by a dramatic level of overcapacity and rising number of insolvent hotels (Peter Bacon & Associates 2009). The re-emergence of domestic and international investment in the Irish hotel sector has positively impacted on reducing the number of insolvent hotels (IHF 2015). To manage the issues currently dominating the Irish and global hotel sector, hotel management must refocus efforts on formulating effective operations analysis to optimise hotel productivity and overall profitability in an increasingly competitive marketplace (Moncarz and Kron 1993; Imrie and Fyall 2001; Burgess 2007). Lean is a management methodology that emerged in the automobile industry in the late 1980s (Womack et al. 2007). Lean was popularised by MIT researchers, Womack et al. (2007) on the publication of “The Machine that Changed the World” in 1990. In “The Machine that Changed the World”, Womack et al. (2007) define in-depth “the Toyota way” (TPS), created by Eiji Toyoda and Taiichi Ohno of Toyota. The core principle of lean is to maximise customer value while minimising waste (Lean Enterprise Institute 2015). The ideology of lean is about creating added value for the customer whilst utilising less resources (Lean Enterprise Institute 2015). Lean is a total systems approach in optimising operational efficiency (Jadhav et al. 2014). Lean is increasingly being adopted by various industries beyond manufacturing as a performance improvement method (Jadhav et al. 2014). The concept of a “lean” operating system is continually being developed within the services industry (Hanna 2007). Some subsectors of the services industry have advanced lean initiatives more progressively than others, e.g. healthcare, software/IT (Kollberg et al. 2006; Staats et al. 2011). Healthcare as noted by Chase and Apte (2007) is considered a lean services champion for continuous efforts in adopting traditional operations management techniques, e.g. lean healthcare - Virginia Mason Production System. Coinciding with the lean philosophy, this research study aims to highlight the importance of systems thinking, which focuses on synthesis, understanding the “why” and interaction of elements within a process, as an alternative to analytical thinking, “how”, which simply provides knowledge (Ackoff 1979). This research study aims to understand the implementation and applicability of lean production principles in services. A key objective of this research study is the development and implementation of a lean services framework for the Irish hotel sector. By submission of this ‘Early Research’ abstract, it is envisioned that future THRIC research programmes will incorporate and advocate for the importance of service operations research.