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

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

3. 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

4. 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

5. Employee Issues

6. Employee Conversation #1:
Kitchen, Supervisor, 9 years (7 years permanent)
Problems in serving guests
Too many casuals: Unhappy that they are not permanent employees despite 7 years work
Shortage of pots: Most are aged, some shapes are not compatible with flat-plate induction-cookers. Often, the same pot has to be rewashed by the cook
Frequent Equipment breakdowns: Induction cookers
Often 6-7 items requested by guests are not available (ex: meat items, sausages – up to 1 week; plantains …)
Personal/ Staff issues
Reduced Medical care: This has been cut down by 50% for permanent staff, very de-motivating for most staff
Unreliable Transport: Staff are often late, buses break down frequently. People are bundled into one bus and are fatigued (standing) by the time they arrive
No Career growth: No promotion, should have been a manager by now; there is favouritism in management
Training: No opportunity for external training (highly valued); only people with senior contacts get the chance
Increasing Workload: Team members who have left are not replaced
Food wastage
Waste of expensive, imported food items is as high as 15% (chiefly due expiry date)
Raw food wastage (local) is about 5%
About being a member of the Hilton Team
The experience gained here is really good, especially in the aspect of guests relations

7. Employee Conversation #2:
Kitchen, 3rd Commiss, 12 years (11 years permanent)
Problems in serving guests
Quite often items that guest require are exhausted (vegetables)
Personal/ Staff issues
4 years ago motivation was high, equipment was replaced, new uniforms and boots were provided
No opportunity for promotion
Medical care is cut down to half
Dental care is not included in medical
Transport if often late: reaches at my pick-up point at the time I am supposed to start work
Casuals are generally unhappy at still being casuals (some for 18 years)
Food wastage
There is food wasted due many casuals and lack of skills in right first time cooking
Also, casuals - because they are not happy - do not care and waste food during cooking

8. Employee Conversation #3:
F & B, Supervisor, 18 years (9 years permanent)
Problems in serving guests
Often (appx 5% of the time) food that the customers order is not available.
Not enough training is provided to the staff, and as a result the skill level varies from individual to individual.
Personal/ Staff issues
Reduced Medical care: 100% medical cover to was promised but not delivered
Unreliable Transport: Staff are often late, buses break down frequently. People are bundled into one bus and are fatigued (standing) by the time they arrive
Employees do not have a “sense of belonging” as their efforts sometimes go unrecognised.
Increasing Workload: Team members who have left are not replaced
Poor condition of men’s changing room highlighted.
About being a member of the Hilton Team
Experience has taught a lot about guest relations and making people happy.

9. 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

10. Some Gemba Observations

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

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

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

14. Cost Break Up - Utilities
Energy Cost Break-Up

15. 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

16. 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)

17. Customer Complaints Source of customer complaints
BTQ/Events customer complaints

18. Customer Complaints Business centre complaints Laundry complaints
Housekeeping complaints

19. 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

21. Inventory and Consumption Analysis - Food
No.of Items
Inventory Value (NGN)
NON-MOVING ITEMS
Items with no consumption in Jan-Dec 2012 55 2%
SLOW MOVING ITEMS
Items with stock of >365 Days 25
10%
Items with stock between 100 to 365 Days 41 6%
Items with stock between 30 to 100 Days 82
41%
MOVING STOCK
Items with stock between 7 to 30 Days 77
35%
Items with stock between 2 to 7 Days 18 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

22. Inventory and Consumption Analysis – General Store
No. of Items
Inventory Value (NGN)
% of Total Inv Value
SLOW-MOVING ITEMS
Items in stock, but no demand in May 2013
232
44,642,826
34%
Items with stock > 365 Days 43
33,628,698
26%
Items with stock between 100 to 365 Days 82
27,878,186
21%
Items with stock between 30 to 100 Days 71
20,408,989
16%
MOVING ITEMS
Items with stock between 7 to 30 Days 33
4,063,518 3%
Items with stock between 2 to 7 Days 8
134,696 0%
No Inventory 31
182
Total
500
130,757,095
TOTAL CONSUMPTION (MAY 2013) NGN
28,705,807
AVE DAILY DONSUMPTION (MAY 2013) NGN
925,993
INVENTORY ON HAND (AS ON MAY 31st 2013) NGN
130,757,095
INVENTORY COVER (DAYS) AT MAY 2013 CONSUMPTION RATE
141 Days

23. Technical Services

24. “Ageing Infrastructure”
SURVEY OF AREAS & TECHNICAL INSTALLATIONS: ‘A’ ITEMS ARE THOSE THAT HAVE EXCEEDED THEIR EXPECTED LIFE BY HILTON / INDUSTRY STANDARDS
AREA ‘A’ PRIORITY ITEMS
SAFETY EQUIPMENT & SYSTEM 9
SECURITY: CCTV – TV, MUSIC SYSTEM 20
ELECTRICAL SYSTEM & EQUIPMENT
ROOF TOP
EXECUTIVE FLOOR
GUEST ROOMS / CORRODOR 9
FRONT OF HOUSE (Health Centre) 1
PUBLIC AREAS
F&B OUTLETS
BACK OF HOUSE
LANDSCAPE & FAÇADE
Source: Study conducted by Chief Engineer

25. Hotel: Critical Equipment (“Show Stoppers”)
GENERATORS
CHILLERS
STEAM BOILER / WATER CALORIFIER
MAIN WATER SUPPLY PUMP
FIRE PUMPS
WATER TREATMENT UNIT
FUEL SUPPLY PUMPS
BUSES
FUEL / GAS STORAGE TANKS
RELATED PIPING (etc) INSTALLATIONS

26. Laundry, Kitchen: Critical Equipment
DRY CLEANING EQUIPMENT
WASHING MACHINES
FLAT BED DRYER
KITCHEN
(Data being listed by team)

27. Buses: Maintenance Expense Jan-May 2013 and Forward Estimate
Note: Excludes 5 new buses
No.
BUS NUMBER
Exp: Jan-May 2013 (NGN)
% of Total Jan-May Exp
STATUS
Est Repair Cost (NGN) 1
329 (MBO1721)
3,353,854
19.0 2
458 (MBO 1418)
2,564,260
14.5
. UNDER REPAIR 3
310 (MBO1721)
2,480,284
14.1 4
911 (MBO1721)
2,162,660
12.3
. Needs New Engine . Body work
4,800,000 5
922 (MBO1721)
1,883,920
10.7 6
351 (MBO1721)
1,779,715
10.1 7
685 (MBO 1418)
1,075,894
6.1 8
424 (MBO1721)
975,955
5.5 9
459 (MBO 1418)
867,686
4.9
. Needs New Engine
4,200,000 10
352 (MBO1721)
257,250
1.5 11
456 (MBO 1418)
232,455
1.3
. ON SCRAP LIST 12
687 (MBO 1418)
Out of Operation
TOTAL
17,633,931
17,400,000

28. Kaizen Approach

29. Create Employee Engagement

30. Development through KAIZEN® action involving everybody
People Development: People Involvement at all Levels
Top
Management
Management Problems
and Standards
Innovation
Middle
Management
Supervisors
Supervision Problem
and Standards
Improvement
Employees:
Operators,
Staff
Maintenance
Standard Work
Gemba Problems
and Standards
Development through KAIZEN® action involving everybody
Value Stream or Pull Flow Projects;
Gemba Kaizen Workshops;
5S and Other Daily Kaizen Activties.

31. Improve Physical Workplace

32. Sustain Self-discipline
5S Campaign
Straighten
Sort
Scrub
Standardize
Sustain Self-discipline
Engage People in Improvement of their Gemba

33. Steps in the 5S Campaign Seiri Seiton Seiso Seiketsu Shitsuke Sort
Sort out and separate
that which is not needed
Put what is needed in order, so that they are ready for use when needed
Clean workplace, equipment & prevent defects
Self-discipline
and training
Standardize, make sorting, arrangement and scrubbing routine
Seiri
Seiton
Seiso
Seiketsu
Shitsuke
Sort
Systematic Arrangement
Standardize
Shine
Sustain 1 3 5 2 4
office

34. Good organization with labeling and marking for ease of retrieval
5S Examples
Good organization with labeling and marking for ease of retrieval

35. First-in First-out (FIFO) storage
5S Examples
First-in First-out (FIFO) storage
Tools organized in ‘shadow boards’ for ease of identification and retrieval

36. Create Flow through Waste Elimination

37. Necessary for VA, but still NVA
Value Add & Waste 5%
Value Adding (VA)
35%
Necessary for VA, but still NVA
Non Value Adding (NVA)
60%
WASTE

38. Muda Elimination: Definition
“Any activity the customer is not prepared to pay for!”
Taiichi Ohno

39. The 7 Flow Mudas in Production
“All we are doing is looking at the time line from customer order to cash collection…
And we are reducing that time line by removing the non-value-added wastes”
(Ohno, 1988)
“Many good American companies have respect for individuals and practice Kaizen and other Toyota tools.
But what is important is having all the elements together as a System”
(Fujio Cho, President of TMC)
People
Waiting
Defects
Scrap
Material
Waiting
Material
Moving
People
Moving
Too Much
Production
Too Much
Processing
Good Energy
goes directly to the bin!

40. The 7 Flow Mudas in Administration
Value Adding Work:
Information Processing (transforming information into useful service)
Muda:
Over Information
Information Waiting
Information Transport
People Waiting
People Movement
Over Processing of Information
Defects (rework)

41. Map end-to-end processes, identify & eliminate Muda
Eliminate Waste: Value Stream Mapping
Map end-to-end processes, identify & eliminate Muda
Start
Process
End
Benefits
Reduced Lead Time
Better service
Less WIP
Less cost
Higher flexibility
Improved Freshness
Reduced Complexity 41

42. Implement Total Productive Maintenance

43. Total Productive Maintenance: Utilities, Laundry, Kitchen areas

44. Initiate TPM through Pillar 2: Steps 1&2 of Autonomous Maintenance
Independent
servicing and
care of machine
and plant by
the operator
Use of Autonomous
Maintenance 7
Full use
* Deepen knowledge of
servicing and corrective
maintenance
Standards to
ensure process 6
* Independent servicing according to
check lists and plans
Independent servicing
by operator 5
* Develop knowledge of machíne construction
and its working
* Skills training skills for independent servicing
Train employees for
independent servicing 4
* Use of checklists
* Visual management at machine
* Surroundings (standards for cleanliness and neatness)
Standards for cleaning
and servicing 3
* Eliminate leakage
* Improve access to check points
* Eliminate sources of dirt and contamination
Prevention of dirt,
improvement of servicing 2
* Basic cleaning, lubrication
* Marking of defects
* Restore condition
Basic cleaning of machine
and plant 1
Cleaning is checking !
Source: JIPM (Japan Institute of Plant Maintenance)

45. Eliminate Equipment Losses
Types of Losses that affect Equipment O.E.E. – Overall Equipment Effectiveness
Breaks
Maintenance / Cleaning
Planned
Training
Availability
Losses
Break downs / Repairs
Production change over
Unplanned
Tool change / Adjustments
Cycle slow than Takt
Micro stops <10 min
Empty Runs
Performance Losses
Start up / Shut down
Quality
Losses
Errors / Defects
Scrap
Rework
Effective Utilization

46. Sensitize Middle Management, Supervisors, Workforce through Kaizen Basics Training

47. LONG TERM COMPANY VALUE
The Continuous Improvement Paradigm -
Kaizen® Foundations Model
LONG TERM COMPANY VALUE S u p l i e r s
Kaizen
Strategy
Financial Success
People
Development
Customer Value
Process Improvement C u s t o m e r
W.C.P.
W.C.P.
CREATE
„CUSTOMER“
VALUE
ELIMINATE
“WASTE”
ENGAGE
„PEOPLE“
GO TO
„GEMBA“
MANAGE
„VISUALLY“
5 Fundamental Principles, Values and Beliefs that support Continuous Improvement

48. 8 Step Gemba Kaizen Implementation Methodology

49. GKW 8 STEP METHODOLOGY P L A N Define Project Scope Scope Sheet
Before GKW
Go to Gemba, observe & collect data
Before Kaizen To Do List
Before GKW
Analysis and Kaizen Targets
Target Sheet
During GKW
Decide Kaizen Action Plan
Kaizen Action Plan
During GKW D O
Execute “Kaizen Action Plan”
Next Action Plan
During GKW C H E K
Evaluate Improvement
Result Summary
During GKW A C T
Prepare new Standards
After GKW
Follow-up, Audit & Sustain
Audit Sheets
After GKW

50. Scope Sheet Project Title: 5S at .....................D C
Scope Sheet
Project Title: 5S at
Company Name:
Gemba:
GKW Dates:
Preliminary Objectives
Team Name:
Members: (L-R):
Current Situation & Target
Concerns / Issues Needing Attention
Add Team Photo, Team Name & Members
Write Maximum three Preliminary Objectives. Objective means something you are aiming to achieve; not the means to achieve
Concerns / Issues needing attention are the problems representing the current conditon on the Gemba which needs immediate attention
In Target – show Target Graph for Control Point, control point is main objective you want to achieve. Should be one and in numbers always
Add company Logo

51. Sharing Success: A3 Story

52. 4 steps in the problem solving process

53. Continuous Improvement

54. level, but not yet stable
Process and Results: SDCA / PDCA Wheels
Results
Process before
introduction of
standards
Process after
introduction of
standards
Process is more stable,
deviations smaller
After
improvement, the
process is on a higher
level, but not yet stable
Stable process
on higher level
after improvements
S: Standardize
D: Do
C: Check
A: Act A S C D A S C D A P C D
P: Plan
D: Do
C: Check
A: Act
Time
Data collection
& analysis
Data collection
& analysis
Data collection
& analysis
Data collection
& analysis

55. Elements of Kaizen® Structure
(2) Vision and steps I MP RO V
EME N T
(10) Steering Committee
(9) Communication
(7) Problem solving
(8) Calculation of gains
(6) Measured results
(5) Activities
background
(4) Instruction and Training
Today
(3) Resources
(1) Policy
TIME

56. I. Prepare and Visualize Standards
Nichijo Gemba Kanri
Men :
Attendance
Skill Matrix
- License
I. Prepare and Visualize Standards
Method :
Standard Work
(Operator)
Machine :
Speed-Feed
Temperature
Pressure
Material :
Availability
Specifications
Bill of Material
II. Visual Controls
Visualize Standards
Visualize Results
Control Deviation
Focus on Process
Process Produces Result
Stabilization
IV. Daily Accountability Process
Three Tier Meeting
Tier-1 : Operator + Team Leader
Tier-2 : Team Leader + Manager
Tier-3 : Manager + Plant Head + Support Department Representatives
Daily Accountability Board
III. Leader Standard Work
Calendar
Gemba Checklist
Gemba Route
Record Abnormalities

57. Key Initiatives – Phase 1
Implement 5S in Stores, Kitchen, Laundry, Utilities and Parking
Streamline flow of Purchasing & Procurement process
Reduce Room Turn-around Time
Improve Delivery-Quality of Short-notice Events
Initiate TPM through Autonomous Maintenance of critical equipment in Technical Service, Kitchen, Laundry
Reduce Energy Consumption
Reduce F&B Costs as a percentage of F&B Revenue
Reduce inventory of slow moving items

58. Roadmap & Benefits

59. TENTATIVE ROADMAP – PHASE 1 (1/3)
18 Month engagement, consisting of:
Start-up Activities
Transformation Actions (Implementation in Gemba)
Actions to Sustain improvements
START UP ACTIVITIES
INITIATIVES
AREA
MEANS
OUTCOME
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Month 13
Month 14
Month 15
Month 16
Month 17
Month 18 1 2 3 4
START UP
TOP & SENIOR MANAGEMENT CONCLAVE
THTSL, Abuja
Top/ Sr Mgmt Conclave
Alignment and role clarity of key stakeholders in continual improvement journey
ESTABLISH OE INFRASTRUCTURE
. Kaizen Coordinator . Kaizen Promotion Office
ESTABLISH HOTEL STEERING COMMITTEE
Senior Management+KPO
Top/Sr Mgr Sponsoship established for direction, support & review of improvement activities
KAIZEN BASICS TRAINING
Class Room + On the job taining
All participants those who will be part of execution team

60. Inventory Management (PFEP) Autonomous Maintenance (Steps 1 & 2)
TENTATIVE ROADMAP – PHASE 1 (2/3)
TRANSFORMATION ACTIONS
INITIATIVES
AREA
MEANS
OUTCOME
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Month 13
Month 14
Month 15
Month 16
Month 17
Month 18 1 2 3 4
TRANSFORM (Theme)
REDUCE PROCUREMENT LEAD TIME
GENERAL STORES: - Approval process - Order to Delivery process
TFM Tool Box
. Current State Map . Future State Map . Specific projects
IMPROVE STORE ITEMS AVAILABILITY
. Food store . Gen store . Room supplies
Inventory Management (PFEP)
. Reduced stock outs . Controlled nventory
IMPROVE WORKPLACE
. Stores: Gen, Food, Wine . Kitchen, Laundry . Utilities, Car Parking 5S
. Reduced Search time . Space freed up . Improved productivity
IMPROVE MACHINE UTILISATION
. Kitchen . Laundry . (Utilities)
Autonomous Maintenance (Steps 1 & 2)
. Reduced downtime . Reduce Maintenance cost
REDUCE ENERGY CONSUMPTION
. Hotel
LOSS TREE ANALYSIS
. Reduced Energy Cost
REDUCE ROOM TURNAROUND TIME
. Housekeeping
TFM Toolbox
. Reduced Customer Wait time
REDUCE FOOD COST AS % OF FOOD REV
. Food
. Reduced Food Wastage

61. TENTATIVE ROADMAP – PHASE 1 (3/3)
ACTIONS TO SUSTAIN CONTINUOUS IMPROVEMENT
INITIATIVES
AREA
MEANS
OUTCOME
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Month 13
Month 14
Month 15
Month 16
Month 17
Month 18 1 2 3 4
SUSTAIN
INITIATE DAILY MANAGEMENT
ALL OPERATING AREAS
NGK
. Consistancy of results . Quick Response to Problems . Daily Accountability
Certified Kaizen Practitioner
ALL FUNCTIONS
CKP Training
. 25 Kaizen Trained Internal Resources
PHASE I PROGRESS REVIEW
KI + Co
Kaizen Audit
. Phase II Roadmap
KAIZEN PROMOTION
. Setup KPO . Setup Obeya Room
. Communication . R&R

62. Potential Benefits (First estimates)