An important aspect of Quality Management to consider is quality costs, how they are identified, measured, analyzed and managed, (Godfrey, Stephens & Wadsworth, 2002). When determining the cost of quality the goal is to determine the cost that would not have been spent if the quality were perfect. For Hotel Escargo one way to determine the costs of quality would be to use metrics to measure key performance indicators for the hotel for all the different service areas. Some of the metrics that would be used are check-in and out times, customer satisfaction surveys, specific room usage ext.
According to the American Society for Quality Control (ASQC) there are four main categories of quality costs including appraisal costs, prevention costs, internal failure costs and external failure costs, (Godfrey, Stephens & Wadsworth, 2002). More specifically and appraisal cost is used to determine the degree of conformance to quality requirements. Within the hotel industry an example of appraisal costs would be room audits to ensure housekeeping meets hotel standards. Appraisal costs are important because a hotel that doesn’t sell rooms every night due to quality is incurring unnecessary costs for the business. Another quality cost results from cost associated with prevention, this includes costs for planning, implementing and maintaining the quality system that assures that an organization is adhering to quality requirements on an economic level. Within the hotel industry an example of prevention cost is quality training for the staff to ensure first pass quality. The third quality costs surrounds internal failure costs which result from failure of the product or service to meet quality standards or requirements before reaching the customer. Within the hotel industry one example is change requests due to quality, these results in re-work for the hotel including housekeeping, luggage transfer, and administrative re-work. The forth quality costs results from external quality costs which are incurred when a product or service fails to meeting quality requirements after received by the customer. This is seen in the hotel industry when a guest is missing a service that was requested during their stay that wasn’t received or didn’t meet the customer quality standards.
Based on the Hotel Escargo case study all of the costs are relevant to Hotel Escargo because the study shows that average times for check-in, check-out and change requests are higher than the industry quality standards. These statistics / metrics demonstrate that there are issues within the internal and external quality costs causing the high numbers. In addition, other factors need to be considered that contribute to the poor metrics that could be prevented with analysis of both appraisal costs and prevention costs. Hotel Escargo is having issues with both their check-in and out process and overall quality and customer satisfaction ratings. To resolve this problem the hotel needs to look at all four quality cost areas.
Godfrey, A., Stephens , K., & Wadsworth, H. (2002). Modern methods for quality control and improvement . (2nd ed.). New York, NY: John Wiley & Sons. Retrieved from http://wow.coursesmart.com/9781118431344/?CSTenantKey=aiuniv&spid=
MGT656-1401D-01 Quality Management and Continuous Improvement
How would you go about determining the cost of quality for Hotel Escargo?
Provide cost of quality examples in the hotel industry for:
Appraisal costs: the costs associated with measuring, evaluating, and auditing the quality standards (2000 QA Publishing). Appraisal costs include but are not limited to things such as the costs associated with the printing of review cards for the clients to fill out, or the costs of a web site for the client to review their stay, and or the costs of a suggestion box.
Prevention costs: All the costs incurred to for activities or materials to prevent poor quality (2000 QA Publishing). Some examples of prevention costs can include but are not limited to training, education, maintenance, and technology updates.
Internal failure costs: Failure costs that occur prior to the client interaction. Internal failure cost include the labor costs from having to repeat work done improperly, materials wastes, equipment failures and breakages, or damages to the facility as well as client complaints (2000 QA Publishing).
External failure costs Failures that occur once the client has interacted with the facility. Dealing with customer complaints, determining the client’s needs, food services (2000 QA Publishing).
Based on the information in the case study, which of these costs do you feel are relevant to Hotel Escargo and why?
All of the criteria are relevant to the Hotel in order to achieve excellence the business must prepare for and anticipate the client’s needs. (Appraisal Costs) If the staffing had been trained properly they would have been prepared for the client upon arrival. (Prevention Costs) Maintenance the rooms would have been cleaned as soon as they were vacated and thus reducing the wait time should a reassignment become necessary. In addition if all the rooms were maintained at the highest quality room reassignment would be reduced. (Internal Failure) Client complaints having taking to long for check in of the clients. (External Failure) Client requests a different room and has to wait because the new room must be prepared; if all the rooms were maintained at the highest quality and cleaned upon evacuation the wait time would be reduced.
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