Introduction

Success requires a change in corporate culture and to do that companies must look for solutions that will help them achieve that success.  Such is the case for Caesars Casino the world’s most geographically diversified provider of casino entertainment (Hyer, Hirsch & Brown 2017).  With the growth of competitive gaming and increases in customers non-gaming spending, General Manager and Senior Vice President Brad Hirsch of Harrah’s Metropolis Casino and Hotel in Metropolis Illinois knew improvements at the Casino were needed.  Reflecting on his previous experience at the Caesars Casino in Tunica Mississippi where he implemented the Lean process, Brad Hirsch needed to consider if implementing the Lean process at the Metropolis location would yield positive results.

Through the case study, Implementing LEAN Operations at Caesars Casinos, we will learn about the Lean implementation at Tunica Mississippi, analyzing the challenges they faced and how they overcame them.  We will use their experience to propose a Kaizen event and Lean implementation applicable for the Metropolis location.

Keywords:  Metropolis?Lean?Kaizen?Implementation

CAESARS CASINO

Like many other corporations, Caesars Casino felt the burden of the macro economic collapse of the 2008 Great Recession.  For Caesars Casino, the recession led to a decline in revenue in various regions, reduced customer spending, and increased competition for market share.  For Brad Hirsch, these consequences were apparent at his Tunica Mississippi Casino location.  A location that was the fourth-largest gaming market in the world with more than $1 billion in annual revenue (Hyer, Hirsch & Brown 2017).  These challenges also drove home the importance of customer service, an essential element of Caesar’s corporate operating strategy.

To reverse the effects of the 2008 recession and improve customer service, it was apparent that Tunica would require a process that would instill a consistent and systematic problem-solving approach.  For Brad Hirsch, this process was called LEAN, a systematic approach that incorporates a fundamental philosophy of continuous improvement.

The implementation of Lean at the Tunica location spanned a little over a year.  The outcome yielded an improvement in customer scores, an annual cost saving of $3 million and increased employee engagement that spanned to other departments who wanted to conduct kaizen events of their own.  Given the success of Lean implementation at Tunica, it was now time to consider what approach to take at the Metropolis location, an expert-driven or employee-centered Lean process.

Describe two challenges that Caesars experienced during the Lean implementation process. What were actions taken to overcome each challenge? Were they effective?

Although the implementation of Lean was a success at the Tunica location, it was not without its share of challenges.  One of the challenges the implementation of Lean presented where the employee’s perception of what Lean meant.  For some, the word Lean implied cutting jobs which resulted in a low level of engagement.  Due to low engagement employees needed reassurance. During the Kaizen event; the Tunica management team consistently communicated the goals of using the Lean process.  Reassuring employees that the objective of Lean was to “improve the customer experience, increase process effectiveness, teach problem-solving tools, and improve employees’ work environments” (Hyer, Hirsch & Brown 2017).  They also immediately began conducting Kaizen events knowing that for employees seeing that jobs were here to stay would drive home the message and offer reassurance.

With the consistent assurance and ongoing Kaizen events, employees perception of the Lean process began to change.  Many expressing how easier their job would have been if LEAN had been implemented earlier on.

Another challenge Tunica faced where obtaining financial support needed to make physical changes within the organization.  With departmental budgets already submitted for the year, requests for additional financial support required higher-level approval and often pose a challenge due to senior leadership wanting to maintain expense discipline.

However, resistance slowly diminished as Kaizen recommendations began to yield tangible results.  As the organization was able to see the benefits from Kaizen, support to fund new infrastructure changes increased.  The commitment by Tunica to continue kaizen events and implement as many recommendations as they could help support that Kaizen event was working and improving the organization.

Assume you manage hotel housekeeping at Harrah’s Metropolis location, and service scores have declined over the past year.  As part of the lean roll out, you and some of your front-line employees will participate in a Kaizen event focused on improving guest-room housekeeping operations.

What KPIs would you propose to track to determine whether the changes implemented through the Kaizen effort improve performance?

At Metropolis customer service is of the utmost importance and to attract new guest and retain existing ones Metropolis have to offer high-quality services.  It is important to create, implement and monitor KPIs that align with organizations culture of optimizing customer experience.  Housekeeping, for instance, housekeeping is perhaps the strongest association with a hotel.  Selecting the most important KPIs relevant to cleaning and housekeeping services will help measure housekeeping performance but also save costs.  KPIs to consider would consist of:

The number of guests per employee- Being under or overstaffed can affect cost and customer service. Being understaffed can affect the level of customer service by overworking your staff and accruing over time.  Being overstaffed can increase unnecessary labor costs.

Average cleaning supply cost per room- Cost for supplies for each guest room involve other elements besides cleaning and laundry supplies.  You have to factor in theft, loss, spillage, improper dilution and dispensing, and improper use.  Cleaning supplies include overuse of chemicals or not truly wearing out a sponge before being discarded.  Laundry supplies might include running less than a full load in a washer or having it set for the wrong fabric.  These types of expenses should be identified and discussed on how they can be reduced.  In some situations, individual steps can be changed, while others are related to an entire department or area.  Which may attribute to attitudinal, process, training or physical layout issues, all of which can have a negative impact customer service.

Turn-around time/Minutes Per Room-  It’s essential for rooms to be readily available for guests.  Housekeeping department must determine what rooms are to be cleaned in priority order while accounting for setbacks such as guests checking out late or other accommodations that may present a challenge and reduce turn-around time. Maintaining real-time status of every guest room is key to reducing the time guests must wait before entering their accommodations.  Tracking turn-around time/MPR will help assess employees who may need additional work, or those may be slower and need assistance.

Equipment and Machinery efficiency- Maintaining working equipment is one of the pillars of high-functioning housekeeping.  When equipment performance slack, housekeeping is unable to execute job responsibilities, and that trickle-down effect can negatively impact the guest experience.  It’s important to err on the side of preventive maintenance vs. reactive maintenance.  Knowing when to replace equipment saves on spending more on unexpected repairs and labor.

Staff Development- Staff development includes education and training which is crucial to improving housekeeping job performance.  Staff equipped with training in commercial cleaning, safe and hygienic sanitization practices can provide personalized services to guests.  Also, yielding increased productivity.

Inventory management- Being equipped with proper supplies is important.  Is inventory organized in a way that’s easiest for housekeeping to get to the needed items in the shortest amount of time?  Does housekeeping have the needed supplies to do their job?  Having too little or too much inventory can affect cost and negatively impact guest experience.

Continuing with the Lean roll out for improving guest-room housekeeping operations, develop a detailed agenda for a kaizen event.  Outline the event’s activities, timing, duration, and Lean tools.  Explain your rationale for each agenda item.

With the creation of housekeeping KPIs, we can create a Kaizen event to help identify waste and propose recommendations for improvement.  The Kaizen event will be for five days and will begin promptly at 8:00 am and end at 6:00 pm.

Kaizen Day 1-Begins with welcome and introduction to Kaizen and team training.  Document current state of housekeeping process.  Waste recognition is then introduced using the acronym DOWNTIME (defects, overproduction, waiting, not engaging people, transportation, inventory, motion, and extra processing) which helps identify various types of waste in work processes.  Also during Day 1 introduction of Lean tools introduced.  Day 1 ends with selecting a process that would present the greatest opportunities to improve customer service and reduce waste.

Kaizen Day 2- Analyze the current state of housekeeping by gathering data about each process by performing a Gemba walk.  Perform a root-cause analysis of waste established on Day 1.  You are deciphering why does the problem or need exist.  Brainstorm ideas that could help improve the process and eliminate waste using the Lean tools introduced on Day 1.  Prioritize solutions presented and develop a value stream map of collected data.  Present the state of the housekeeping process with suggested improvements. Begin designing future state design. Day 2 ends with preparing for implementation of proposed improvements.

Kaizen Day 3- Compare current state with future state and identify any gaps.  Review the information learned throughout the week and begin implementing suggested improvements. Try out new processes with implemented improvements.  Beginning training participants on new processes.  Make necessary adjustments as needed.  Day 3 ends with preparation for full implementation of new processes.

Kaizen Day 4- Continue implementation of improvements and proceed with performing processes with update improvements.  Continue training of participants and make necessary adjustments as needed. Create and implement standard work of the changes made to housekeeping process.  Summarize the benefits produced by conducting the kaizen event.  End Day 4 preparing for finalizing kaizen event.

Kaizen Day 5- Finalize future state, complete training on standard work (update processes) and present outcome of the Kaizen event, followed by a celebration of completion.

What would be the advantages and disadvantages of an expert-driven approach to process improvement at the Metropolis facility, in contrast to the employee-centered approach used at Tunic?

The expert-driven approach is a very popular means of addressing process improvement.  With the expert-driven approach, the Metropolis location would be assigned a team of skilled experts with experience in the application of LEAN principles and tools.  They would take on the responsibility of improving internal processes and procedures and create an initiative improvement program to deploy at Metropolis.  The benefits associated with expert-driven approach aside from cost and time are:

A strong top-down message

Implementation of predetermined goals

An emphasis on best practices

Elimination of undesirable practices

The experts initiate and implement the change

However, the disadvantages of an expert-driven approach are that employees are not directly involved in the initial stages of the improvement process.  Making it difficult to obtain management buy-in and employee cooperation in regards to the program.    If Metropolis Relies on the expert-driven approach, it will be important for the organization to explain the benefits of the program the experts present.

The second approach, employee centered approach focuses on the process itself rather than the program or initiative.  This approach relies more on employee involvement and works well with organizations that utilize Six Sigma and Lean Operation processes.  The advantage of the employee-centered approach is that it ensures that employees will genuinely want to improve their process.  There is an adage that says, “Employees never resist their ideas.”  Because ideas come from the bottom up in an employee-centered approach, organizations do not need to inculcate the kind of behavior modification required in expert-driven approaches.

The disadvantage centers around cost and time.  The Tunica Lean process spanned over a year and required employees to step away from their required responsibilities for extended periods of time.  At Tunica, they had access to near by regional resources that allowed them to borrow employees.  Providing coverage of employees who were participating in Kaizen events. Metropolis, unfortunately, has only 600 employees and a single facility.  If they were to participate in high-involvement Kaizen events, it could result in insufficient coverage of key service areas at Metropolis.

Which approach would you recommend for the Metropolis facility, and why?

Both the expert-driven and employee-centered approach have strengths that would benefit Metropolis.  In that regard, I would recommend both approaches, combining features of both expert-driven and employee-driven approach.  I would utilize an expert to facilitate the process improvement but also call upon a select few of employees to be involved in the process.  Metropolis would be able to host a Kaizen event without removing the majority of their employees away from their responsibilities, allowing Metropolis to maintain coverage of key service areas. Combining both approaches helps employees work through the process with the help of an expert but also empowers employees and helps them take ownership of their jobs, so they have a personal interest in improving performance.

Regardless of which approach Metropolis decides the key to either success is that the improvement effort must operate within the vision, mission, and core values of the organization’s goals.

Tables

Table 1

Harrah’s Casino Metropolis Kaizen Event