KAIZEN®/ Lean Assessment Welcome to Audit KAIZEN®/ Lean Assessment June 24-27, 2013, Abuja

Agenda Management Priorities Highlights Some Metrics Way Forward Potential Benefits Q & A

Top Management Direction: OE Imperatives for BE Improve Customer Satisfaction: Room supplies; Food variety, quality & service Upgrade facility and guest amenities for improved guest perception of VFM Reduce procurement lead time & delivered item cost Reduce % Operating Cost (Food, Energy, R&M) Improve employee morale and engagement in continuous improvement

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

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

Some Gemba Observations

Disorderly storage; difficult to retrieve material Stores Disorderly storage; difficult to retrieve material

Kitchen and Laundry Cluttered Workspace; difficult to maintain FIFO (First-in First-out) in cold-store

Operating Cost Break Up Operating Cost Break-Up as a % of revenue

Cost Break Up - Utilities Energy Cost Break-Up

F&B 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

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)

Customer Complaints Source of customer complaints BTQ/Events customer complaints

Customer Complaints Business centre complaints Laundry complaints Housekeeping complaints

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 05:12 Median 05:02 Min 00:41 Max 11:47 Large variation observed

Inventory and Consumption Analysis - Food   No.of Items Inventory Value (NGN) NON-MOVING ITEMS Items with no consumption in Jan-Dec 2012 55 1024958 2% SLOW MOVING ITEMS Items with stock of >365 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 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

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