OPMA CHAPTER 1-2 REVIEWER
KEY CONCEPTS IN TOURISM OPERATIONS
Each of these components contributes to the holistic tourism experience. Effective management and coordination among these components are essential to providing tourists with a seamless, enjoyable, and memorable journey. Understanding these categories helps destination managers and tourism professionals optimize their offerings and enhance the overall quality of tourism operations.
Competitive Advantage
Effective Operations Management can be a source of competitive advantage. Organizations that excel in managing their operations can offer better quality, faster delivery, or lower prices than their competitors, attracting more customers.
Marketing and Promotion
Effective marketing and promotion are crucial for attracting visitors. Operations managers may face challenges in creating compelling marketing strategies and partnerships to promote their destinations or businesses effectively.
Resource Allocation
Efficient allocation of resources is crucial in tourism, including staff, facilities, vehicles, and equipment. Operations managers must ensure that resources are available when and where they are needed to provide a seamless guest experience.
Capacity Planning
Efficient capacity planning ensures that an organization can meet demand without overcommitting or underutilizing resources. This is crucial for managing fluctuations in demand and optimizing production or service delivery.
Quality Control
Ensuring consistent quality is paramount in tourism. Operations managers implement quality control processes to maintain standards in accommodations, dining, guided tours, and other services. Regular inspections and guest feedback mechanisms are used to identify and rectify issues.
Safety and Security
Ensuring the safety and security of tourists is paramount. Operations managers must develop and implement comprehensive safety plans, particularly in the face of unforeseen events like natural disasters, health crises, or security incidents.
Armand Feigenbaum
He believed that the management of a company must always strive for quality excellence.
Philip Crosby
He defined quality as containing four absolutes: 1. Quality is defined as conformance to requirements. 2. The system for causing quality is prevention, not appraisal. 3. The performance standard must be zero defects. 4. The measurement of quality is the price of nonconformance, not indices.
W. Edwards Deming
He emphasized the philosophy of continuous improvement: that the quest for quality is a never-ending journey. He also summarizes it with: Plan, Do, Check and Act.
Philip Crosby
He proposed that if management does not create a system in which zero defects are the objective, then employees are not to blame when things go wrong and defects occur.
History of Quality Management
Humans have always sought to improve the outcome of their efforts, whether in agricultural production or modern industrial and service- based economies.
Global Reach
In an increasingly globalized world, Operations Management helps organizations manage operations on an international scale. It addresses complexities related to international supply chains, regulatory compliance, and cultural differences.
Destination Management
In some cases, operations management extends to destination management, where the focus is on coordinating and improving the overall tourism experience within a specific region or destination.
Sustainability
In today's world, sustainable operations are critical. Operations Management focuses on eco-friendly practices, reducing waste, conserving resources, and minimizing the environmental impact of operations, which is essential for long-term viability.
Quality Assurance
It ensures that products or services consistently meet or exceed customer expectations. Quality control and continuous improvement techniques are integral parts of Operations Management, leading to higher customer satisfaction and loyalty.
Ritz-Carlton
Its quality management practices are quite accurately captured in is motto, credo, and three steps to service.
Walter Shewhart
Known as the grandfather of quality management. The earliest notions of quality and continuous improvement principles can be traced back to this former Bell Telephone employee.
Quality Control
Maintaining consistent quality is essential in tourism. Operations managers must implement rigorous quality control measures to ensure that accommodations, dining, guided tours, and other services meet or exceed established standards.
The Impact of Quality Improvement Programs
Many scholars have analyzed the impact of quality improvement programs on a firm's profitability. Research has shown that the long-term profitability of companies are significantly higher compared to other firms in the same industry.
Seasonality
Many tourist destinations experience peak seasons with high demand and off- peak seasons with lower visitation. Operations managers must find ways to manage capacity effectively during peak periods while avoiding overstaffing or underutilization during off-peak times.
Infrastructure and Accessibility
Many tourist destinations lack adequate infrastructure and accessibility, which can hinder the guest experience. Operations managers may need to advocate for infrastructure improvements and ensure that their operations are accessible to all.
Philip Crosby
Most widely known for his easy-to-read management book: Quality Is Free.
Strategic Alignment
Operations Management aligns operational activities with the organization's strategic goals. It ensures that day-to-day operations support the long-term vision and mission of the organization.
Innovation and Adaptation
Operations Management drives innovation by continuously seeking better ways to do things. It also helps organizations adapt to changes in the business environment, whether those changes are technological, regulatory, or market driven.
Supply Chain Management
Operations Management extends beyond the organization's boundaries to manage the supply chain effectively. This involves coordinating suppliers, logistics, and inventory to ensure the timely delivery of materials and goods.
Resource Optimization
Operations Management helps organizations efficiently utilize their resources, including labor, materials, equipment, and technology. By optimizing resource allocation, it reduces wastage and minimizes costs, which is vital for profitability.
Cost Reduction
Operations Management identifies cost drivers and seeks ways to reduce operational expenses. This can include streamlining processes, improving supply chain management, and minimizing waste, all of which contribute to cost savings.
Customer Experience
Operations Management in tourism prioritizes creating positive and memorable experiences for tourists. This includes elements such as personalized service, cleanliness, safety, and accessibility.
Risk Management
Operations Management includes risk assessment and mitigation strategies. By identifying potential risks in the supply chain, production processes, or service delivery, organizations can develop contingency plans to minimize disruptions.
Decision Support:
Operations Management provides valuable data and insights for decision-makers. By analyzing key performance indicators (KPIs) and operational metrics, leaders can make informed choices that drive the organization forward.
Customer Satisfaction
Operations directly impact the customer experience. Timely delivery, consistent quality, and responsive customer service are all outcomes of effective Operations Management. Satisfied customers are more likely to become repeat customers and brand advocates.
Financial Management
Operations managers are responsible for managing budgets, controlling costs, and optimizing revenue streams. This financial acumen ensures the sustainability of tourism businesses.
Capacity Planning
Operations managers in tourism must plan for varying levels of demand throughout the year due to seasonality and other factors. They analyze historical data and trends to optimize capacity, ensuring that they can meet peak demand without overcommitting during off-peak periods.
Sustainability
Operations managers need to balance the economic benefits of tourism with the environmental and social impacts. This includes reducing energy consumption, minimizing waste, and supporting local communities and conservation efforts.
Customer Satisfaction Measurement
Operations managers use tools like guest surveys and feedback analysis to measure customer satisfaction and identify areas for improvement. High guest satisfaction not only leads to repeat business but also positive word-of-mouth marketing.
History of Quality Management
Products with consistent quality became more difficult as production volume grew during the twentieth century.
Labor Management
Recruiting, training, and retaining skilled staff can be challenging in tourism, particularly in remote or seasonal destinations. High turnover rates and the need for multilingual staff add complexity to labor management.
Enhancement of the Firm's Reputation
Research has shown that it is less costly to continue serving existing customers than to increase market share.
Sustainability
Sustainable tourism practices are becoming increasingly important. Operations managers in tourism are responsible for implementing environmentally friendly initiatives, such as reducing energy consumption, minimizing waste, and supporting local conservation efforts, to preserve the destinations they serve.
Technology Integration
Technology is rapidly transforming the tourism industry, with online booking systems, mobile apps, and virtual reality experiences becoming commonplace. Operations managers must adapt to these technologies to remain competitive and meet guest expectations.
Innovation and Technology
Technology plays a pivotal role in enhancing operations in tourism. Operations managers adopt innovations like online booking systems, mobile apps, and virtual reality experiences to streamline processes and improve the guest experience.
ISO
The ___ develops standards that have technical, economic and social impact around the world. The objective of the ____ standards is to make the development, manufacturing, and supply of products and services more efficient, safer, and cleaner.
Six Sigma
The number six refers to the objective that no measure should be less than six standard deviations from the desired standard to achieve almost perfection (99.9997 percent error-free products).
"Made in Japan"
The teachings of Deming and Juran were followed rigorously by Japanese companies, making _______ a mark of excellence.
Competition
The tourism industry is highly competitive, with new destinations and businesses continually entering the market. Operations managers must identify and maintain competitive advantages to attract and retain visitors.
Supply Chain Coordination
The tourism supply chain involves multiple stakeholders, from suppliers of fresh produce to transportation providers. Operations managers must coordinate and optimize these supply chains to ensure the timely delivery of goods and services to meet guest needs.
Malcolm Baldrige National Quality Award
This award was created by the US government in 1987 to help improve the quality and competitiveness of American companies by recognizing the highest-performing organizations in the manufacturing, service, healthcare, education, and small-business categories.
Why Firms Improve Quality
To achieve multiple goals such as: - Cost reduction - Customer satisfaction enhancement - Increased customer loyalty - Increase in profitability and market share
Service-Centric Approach
Tourism is primarily a service industry, and Operations Management in tourism centers on managing the creation and delivery of these services. This involves ensuring high-quality interactions and experiences between tourists and service providers.
Crisis Management
Tourism is susceptible to crises, such as natural disasters, disease outbreaks, or political instability. Operations managers need contingency plans in place to respond effectively and ensure the safety and well-being of guests.
Cultural Sensitivity
Tourism often involves interactions with diverse cultures and communities. Operations managers must promote cultural sensitivity among staff to provide a welcoming and respectful environment for all guests.
Cultural Sensitivity
Tourism often involves interactions with diverse cultures. Operations managers must promote cultural sensitivity and inclusivity among staff to provide a welcoming and respectful environment for all guests.
Regulatory Compliance
Tourism operations are subject to various regulations, including safety standards, labor laws, and environmental regulations. Staying informed about and complying with these requirements is essential to avoid legal and reputational risks.
Crisis Management
Tourism operations are susceptible to various crises, such as natural disasters, health crises, or security incidents. Operations managers must have contingency plans in place to respond effectively and ensure the safety and well-being of guests.
Compliance and Regulations
Tourism operations must adhere to various regulations, including safety standards, labor laws, and environmental regulations. Operations managers must stay informed about these requirements and ensure compliance.
Supply Chain Complexity
Tourism operations often rely on complex supply chains, involving multiple suppliers of goods and services. Coordinating these supply chains and ensuring the timely delivery of goods and services is a logistical challenge.
Customer Expectations
Tourists have high expectations for service quality, safety, cleanliness, and unique experiences. Operations managers must consistently deliver on these expectations, especially during peak seasons when guest volumes are high.
Honda and Toyota
Two of the world's leading automobile manufacturers that have consistently ranked higher than other competitors in various quality ratings over the last several years.
Financial Performance
Well-managed operations contribute directly to financial performance. Efficient processes and resource management increase revenue and profitability while reducing unnecessary costs.
Joseph M. Juran
Wrote Quality Control Handbook: a reference work for quality engineers. Revolutionized the Japanese practice of quality management and helped shape that country's economy into an industrial leader. One of the first to incorporate the human aspect of quality management.
quality loss function
a mathematical formula for determining the cost of poor quality
Define
a problem or improvement opportunity.
Dr. Joseph M. Juran
a quality guru who taught with Deming in Japan
Quality Control Handbook
a reference work for quality engineers.
quality circles
a small group of employees who are responsible for similar or related work functions.
Expectations
a state of anticipation about a future outcome
Ritz-Carlton
a two-time winner of the Malcolm Baldrige National Quality Award is internationally known for its commitment to the highest level of quality and service.
ISO
acts as a bridging organization in which a consensus can be reached on standards that meet the requirements of different segments of the society.
Dr. W. Edwards Deming
also emphasized that improving quality means reducing the cost of rejects and rework, warranty expenses, and loss of goodwill.
Six Sigma
an approach based heavily on the statistical and fact-based data and tools
Six Sigma
an approach can be summarized as: • Understanding the needs and preferences of the customer • Management by fact is a requirement. The unit of analysis within a ____ approach is a process. • ______ emphasizes the need for a proactive management style. • Active cooperation and collaboration between employees to achieve teamwork • ____-- strives for perfection.
robust quality
an experimental design and statistical analysis approach for identifying the optimum product design configuration
perceived quality
and the _______ is thought to be higher or lower than expectations.
Tour and activity operators
are companies or individuals that organize and provide guided tours, excursions, and recreational activities for tourists. This category includes sightseeing tours, adventure activities, cultural experiences, and guided hikes. Tour operators enhance tourists' experiences by offering expert guidance, access to unique locations, and the convenience of pre-arranged activities.
Customer Expectations
are influenced by many different factors such as: - Personal needs - Word of mouth - Reputation of the company
Attractions
are the primary motivators for tourism. They define a destination's unique appeal and contribute significantly to tourists' overall satisfaction and enjoyment.
In 1979, Philip B. Crosby
authored the book Quality Is Free, which emphasized that doing things right the first time adds nothing to the cost of a product or a service.
Sigma level of a process
can be calculating by dividing the distance from the tolerance limits (either LTL or UTL) to the mean by standard deviation.
W. Edwards Deming
considered the father of modern quality management.
DMAIC
defines the steps that a Six Sigma practitioner is expected to follow, starting with identifying the problem and ending with the implementation of longlasting solutions
ISO 4000
developed to certify companies based on their commitment to environmental quality management
Events and entertainment
encompass organized events, festivals, concerts, and performances that cater to tourists. This includes music festivals, sports events, theater productions, and local celebrations. Events and entertainment contribute to the vibrancy and cultural richness of a destination. They often attract visitors and create a sense of community and excitement.
Attractions
encompass the sites, activities, and experiences that draw tourists to a destination. This category includes natural landmarks (e.g., national parks, beaches), cultural and historical sites (e.g., museums, monuments), entertainment venues (e.g., theme parks, theaters), and recreational activities (e.g., hiking, water sports).
Souvenirs and Shopping
experiences allow tourists to purchase memorabilia and local products. This includes gift shops, artisan markets, duty-free stores, and shopping districts. Souvenirs provide tangible reminders of a trip and support the local economy. The shopping experience can be an enjoyable part of the overall tourist experience.
Operations managers
in the tourism industry they navigate a complex landscape characterized by seasonality, high customer expectations, sustainability concerns, and a need for seamless coordination among various stakeholders.
Transportation
in tourism involves the movement of tourists from their origin to their destination and between various points of interest during their stay. This encompasses airlines, cruise lines, buses, trains, taxis, rental cars, and even walking or cycling.
Food services
in tourism refer to the provision of meals and beverages to travelers. This includes restaurants, cafes, food trucks, bars, room service in hotels, and catering for events. Dining experiences are an integral part of the tourism journey. High-quality food services not only satisfy tourists' hunger but also offer cultural and culinary experiences that enrich their trips.
Travel Services
involve a range of support services that assist tourists in planning and organizing their trips. This includes travel agencies, online booking platforms, travel insurance providers, and visa services. Travel services simplify the planning process for tourists, offering convenience and peace of mind. They help travelers make informed choices and address logistical aspects of their trips.
Operations Management in the context of Tourism Management
is a discipline focused on efficiently and effectively delivering tourism products and services while enhancing the overall guest experience. It plays a pivotal role in ensuring that the diverse components of the tourism industry, such as accommodations, transportation, attractions, and food services, work harmoniously to meet the needs and expectations of tourists.
Operations Management (OM)
is a dynamic and evolving field that has been significantly influenced by technological advancements, globalization, sustainability concerns, and changing consumer expectations.
Operations Management (OM)
is a fundamental discipline that lies at the heart of every organization, irrespective of its size, industry, or purpose. It is the engine that powers an organization's ability to create, deliver, and optimize products and services efficiently and effectively.
ISO (International Organization for Standardization)
is a non-governmental organization encompassing the national standards institutes of 157 countries.
The Malcolm Baldrige National Quality Award (MBNQA)
is an annual award given to high- performing organizations within the United States. It recognizes the highest performing organizations in six categories: manufacturing, service, small business, health care, education and not-for-profit.
Customer Satisfaction
is an indication of the long-term profitability of a company.
Total Quality Management
is an umbrella term used to describe a quality management system that addresses all areas and employees of an organization, emphasizes customer satisfaction, and uses continuous improvement tools and techniques.
product (goods and service) quality
is considered to have several dimensions.
Operations Management (OM)
is indispensable because it not only ensures the efficient functioning of an organization but also directly impacts its competitiveness, profitability, and ability to meet customer expectations. It is a holistic approach that combines strategic thinking, resource management, quality control, and innovation to drive success in a dynamic and ever-changing business landscape.
Quality
is no longer considered a nice-to-have luxury but is acknowledged as a necessary requirement for successfully competing and surviving in the marketplace.
Operations Management (OM)
is of paramount importance in various industries and organizations due to its multifaceted role in ensuring efficiency, effectiveness, and competitiveness.
Operations Management (OM)
is the field of management that focuses on the design, planning, execution, and control of an organization's core processes to create goods and services. It plays a vital role in various industries, including manufacturing, healthcare, retail, and of particular interest to us, the tourism industry.
Measure
process performance.
Accommodations
refer to the places where tourists stay during their journeys. This category includes a diverse range of options such as hotels, motels, resorts, hostels, vacation rentals, and campgrounds.
Consistently
refers to a reliable or steady pattern of performance
ANSI (American National Standards Institute)
represents the U.S. government, businesses, and consumers within the ISO.
Sampling
selecting a few products from the production line for inspection. If the sample met established specifications, the entire production batch was assumed to have met acceptable quality.
ISO 9000
standard created to certify companies based on their adherence to quality management principles
W. Edwards Deming
statistician: went to Japan after World War II and taught the concepts of continuous improvement and statistical process control techniques
Quality
the ability of a product (a good or a service) to consistently meet or exceed customer expectations
Ability
the competence, either native or acquired, that enables one to do something well
Control
the improved process to hold the gains.
Improve
the process by attacking the root causes.
Analyze
the process to determine the root causes of poor performance.
Tour opearators
they enhance tourists' experiences by offering expert guidance, access to unique locations, and the convenience of pre-arranged activities.
Accommodation
they serve as the home away from home for travelers.
Quality Planning.
• Includes activities such as: • identifying the customer. • determining customer needs. • translating customer needs into production language. • Optimizing product features to meet customer needs
Costs Associated With Quality Improvement
• Internal failure costs • External failure costs • Assurance costs • Prevention costs
The Essential Elements of TQM
• Top management commitment (TQM) • Employee participation • Customer focus • Management by fact • Continuous improvement
Six Sigma
(The term _____ itself refers to a statistical term meaning 3.4 million defects in a million opportunities).
Six Sigma
- The dominant quality management framework used in manufacturing and service organizations - Based on the philosophies of gurus (Deming, Juran, and others) - Has aspects in common with TQM and the Baldrige Framework - Originally developed as a framework for implementing quality improvement approaches at Motorola
objective quality
A customer compares the ________ of a product with his or her expectations.
Word of Mouth
A customer who is satisfied and more loyal to a company is also likely to spread positive word of mouth and create additional goodwill in the marketplace.
Continuous Improvement
A fundamental aspect of Operations Management is the pursuit of continuous improvement. This involves regularly evaluating processes, seeking efficiencies, and adapting to changing circumstances, ensuring the organization remains competitive and resilient.
Armand Feigenbaum
Author of a book on quality control published in 1951. He developed the concept of total quality control (TQC), which later evolved as part of total quality management (TQM).
Customer Loyalty
Companies that continue to provide high quality products and services realize high customer loyalty.
Increase in Profitability and Market Share
Companies that produce higher quality products and services are also rewarded by enhanced financial performance.
Kaoru Ishikawa
Created a cause and effect diagram to find the root cause of process imperfections. Explored and popularized the concept of quality circles—a small group of employees who are responsible for similar or related work functions.
Genichi Taguchi
Created the quality loss function: a mathematical formula for determining the cost of poor quality. Developed principles of robust quality: an experimental design and statistical analysis approach for identifying the optimum product design configuration
(Define, Measure, Analyze, Improve and Control).
DMAIC
Quality of Goods
Determined by: - Performance - Special Features - Reliability - Conformance - Durability - Serviceability - Aesthetics - Brand Equity or Reputation
Service Quality
Determined by: - Reliability - Responsiveness - Competence - Access - Courtesy - Communication - Credibility - Security - Understanding/knowing the Customer - Tangibles