Processes Optimization with Lean Tools Intensification in the Non-Manufacturing Sector

The tourism industry can currently be considered one of the most important sectors of the business sphere, which largely affects the development of the national economy. Modern technologies have influenced the development of tourism in various directions and significantly contributed to the transformation of the classic customer into the so-called active customer. An active customer directly enters the product creation process through a specific corporate business model that the given company has. The constantly increasing share of online customers thus represents a huge base of potential clients but also information that needs to be processed and flexibly responded to. The article is processed as a case study, where lean principles, which are part of the process approach, are applied during the analysis. They are effective in finding and defining 7/8 basic types of losses in the production sphere, which is also related to the decision by the author of the article to use these tools in the non-production sphere as well. The output of the case study is a processed proposal of the methodology for performance measurement, and schemes of key indicators for the non-production area are proposed. Through the proposed methodology, it is possible to improve processes in the field of service provision, focusing primarily on the hotel industry, and to transform them from a classic model to a model with implemented lean tools.

Introduction

Methodology for Measuring and Evaluating Process Performance

Measuring and evaluating process performance can be considered an important part of process management. These are activities that are intended to ensure objective and accurate information about processes with the aim of the possibility of their operational regulation according to the requirements placed on the processes. It includes the selection of key performance measurement indicators that serve for the correct direction and correction of processes. Evaluating the performance of business processes means determining the extent to which the desired results of the monitored process are achieved (Glovaet al., 2018). The measure is defined by the difference between actual and desired results, while the result represents the given target state, and the measure is an indicator (one or a set of indicators).

Performance is closely linked to the company’s success in competing with other companies. Competitiveness should be built on three basic pillars (Herzog & Grabowska, 2021; Kábele & Edl, 2020; Rosovaet al., 2020):

1. The application of methods suitable for the management of a specific enterprise with the aim of streamlining business processes and supporting the process of continuous productivity improvement,
2. Active involvement of workers and ensuring the improvement of their performance to use their practical knowledge to achieve the best possible production and management approaches,
3. The correct creation and subsequent implementation of business processes with the aim of achieving simplicity, clarity, and the possibility of continuous improvement.

The result of the study Maalimet al. (2023) is a recommendation to implement an altruistic strategy as an internal strategic component of Corporate Social Responsibility (CSR) to attract, motivate, and retain workers in five-star hotels in Kenya. Work relations, social dialogue, and workplace diversity were used as variables to study the altruistic strategy. The study was based on the resource perspective, social exchange, and social identity theories.

In a study by Younnes (2023), the author’s findings indicate that the implementation of lean practices has a significant positive impact on green sustainability performance. Specifically, lean practices such as waste reduction, energy conservation, and process improvement contribute to reducing a company’s environmental impact and improving environmental sustainability. The study recommends that companies adopt lean practices to achieve operational excellence and sustainable development.

It is also interesting that Saniuket al. (2022) aimed to identify key social, i.e., social and economic expectations of the direction of the development of the Industry 4.0 concept with an emphasis on Industry 5.0. The authors elaborated recommendations aimed at the development of the industry in areas related to people, sustainability, and resilience. The results of the research can, therefore, be used in the processing of the strategic intentions of companies in the non-production area as well.

Analysis of Non-Production Processes

When analyzing processes for the non-manufacturing sector, it is also possible to rely on the knowledge offered by the contributions of authors (Gregoret al., 2022; Grznaret al., 2022; Knapcikovaet al., 2020; Strakaet al., 2022), who in joint studies focus on manufacturing processes. Procedures are well-processed, representative methodologies that can be the basis for finding innovative solutions even for non-production processes. One of the basic differences between the nature of production and non-production processes can be seen in the different dynamics of the load in both types of processes. In the context of non-production processes, it is the frequency of the number of requests or orders in the monitored time horizon. The ideal condition for achieving high productivity would be a constant load of non-production processes, which is, however, quite difficult to achieve in practice. The nature of non-manufacturing processes, to a much greater extent, shows the nature of randomness, which is directly related to the random and diverse demands of customers that enter directly into the given process. The density of requests is more variable over time, in contrast to production processes, where requests are processed based on a predefined production schedule (daily, weekly, and so on).

The focus of the analysis of non-production processes should, therefore, be to understand the mechanism of the emergence of this type of unstable requirements and search for the potential for optimization of the given processes that affect them. The nature of the load can be identified by frequency, e.g., constant, random, cyclic, seasonal, with a trend, etc. It is important to analyze the conditions under which the given requirements occur and to monitor the factors affecting the given fact. In connection with non-production processes, these conditions cannot be directly modified according to the company’s requirements, but it is necessary to know them in connection with the analyzed process, which allows:

1. Choosing a more accurate method for process analysis,
2. Evaluating the adequacy of resources and capacities in the time horizon,
3. Selecting a suitable work procedure model,
4. Selecting appropriate corrective measures to increase the efficiency of non-production activities.

Case Study

Analysis and Categorization of Losses in the Hotel Value Chain

Lean thinking, which began to eliminate production losses at the Toyota plant, gradually moved into the non-production sphere as well. Lean waste can be considered any activity that uses resources but does not create any value. Lean value chain refers to the efficient flow of goods and information throughout the value chain and reduces the cost of the value chain by eliminating non-value-added activities through the application of lean techniques. For this purpose, lean principles and tools are applied to the elements and functions of the value chain (e.g., supplier selection, purchasing, transportation, order management, warehousing, production/processing, transport, distribution, etc.) with the aim of changing the elimination of all types of losses.

As shown in Table I, losses throughout the supply chain can be categorized as tangible (material, shortage of goods, bad food, errors, and so on) and intangible (delays, errors, poor planning, and so on). Hotel supply chain losses can be related to 7 types of losses or to the added value (NVA) of the lean philosophy. The hotel industry is a highly customer-oriented business that could improve customer satisfaction by eliminating losses and errors from products and services offered to customers. The fact that no two customers are ever the same is based on the premise that each customer defines value in their own unique way. This results in the need to search for and implement tools and techniques aimed at the effective management of individual value flows.

Table I. Map of 8 Types of Losses in the Hotel Value Chain

	Waste	Definition	Example	Degree of importance of waste	Problem description
D	Defects	Products, information, and services that are delivered incomplete or faulty	– Defective product – Different material – Missing document	Medium	Poor quality of input raw materials, food, low level of services provided, poorly processed and incomplete information, which can lead to overloading of hotel capacity.
O	Overproduction	Creation (production) earlier or faster than necessary; the so-called “formation of stocks”	– Extra copies of the  document “extra”  products– Production “for  safety”	High	Excess waste in catering and restaurant facilities, excess replacement of bathroom products, sheets, etc.
W	Waiting	Waiting for information, equipment, material, parts, or people	– Waiting for approval– Waiting for an  employee– Waiting for material	Low	Waiting for work resources, waiting for the customer to check in at the reception, and long approval channels.
U	Untapped talent	Incorrectly used experience, talent, knowledge, creativity, or people skills	– Insufficient training – Underestimating  people – Indecisive workers	Medium	The introduction of a system of submitting, evaluating, and rewarding improvement suggestions from employees is not supported.
T	Transport	Unnecessary transport of material, information, or equipment	– Repeated transport – Forwarding  information – Transport of tools	Low	Unnecessary forwarding of information.
I	Inventory	Accumulation of parts, information, and products in a quantity greater than the customer’s request	– Data collection – Unnecessary stock – Document storage	Low	A high-quality documentation system is not created, and redundant purchases for the supply of the restaurant.
M	Motion	Movements of people that do not add value to the process or to the customer	– Walking between  machines – Switching states –Ergonomic movement	Medium	Redundant movements that burden employees and do not add value to the process.
O	Overprocessing	Every step of the process that does not add value in the eyes of the customer	– Unnecessary reports – Redundant checks – Redundant actions	High	Redundant activities without value creation.

For the hotel industry, a modified model of the transformation of a classic hotel into a hotel using lean tools was proposed. This is a model that is successfully applied in the production sector but based on the above analysis focused on 7/8 types of losses, it is possible to confirm the suitability of implementing this model in the hotel industry as well. It can be considered as a tool for eliminating losses and waste and increasing value for the customer, thereby achieving the highest possible level of efficiency and profitability in the given sector.

It is necessary to indicate the possible consequences within the individual phases of the proposed model in connection with the connection to a specific hotel:

1. Introduction of a process approach: In order to make the best possible use of the potential of the given model, it is necessary to introduce a process approach, create a process map, define processes and process attributes,
2. Value identification: This is followed by the definition of added value from the point of view of hotel customers, prioritization of processes according to added value for end customers, and description of procurement and reservation procedures, which is the first step in identifying sources of losses,
3. Value flow mapping: It is an effective tool for analyzing the added value of specific activities and tasks of a specific hotel process in order to accurately define wasteful activities or tasks for which the customer is not willing to pay, e.g., unnecessary movements, excessive stocks, delivery times, excess/shortage of employees, and so on.
4. Creation of a new/optimal value stream: It eliminates the “waste” of process resources, but this is a complex process, as the hotel needs to map its unique resource stream, quantify the costs of each resource, and exchange them for the value required by customers, e.g., the reservation process begins with choosing a suitable room, booking a room, transportation to the hotel, registration upon arrival/check-in, staying at the hotel, check-out/check-out and departure (providing transportation from the hotel), errors arising in the value stream can disrupt the natural sequence of events, which can lead to confused bookings, pointless waiting, lost luggage, unprepared rooms, and so on.
5. Introduction of the pull strategy: The hotel reservation process is a pull process from when the guest arrives until he leaves the hotel premises. It consists of a standard set of activities that include cleaning, restaurant services, and wake-up, of course, which are included in the price of the stay at the hotel. However, each request from the customer in connection with services triggers a “pull” process. A high response time to a customer’s request harms customer satisfaction and, in connection with improving quality and building reputation, requires introducing processes based on the principle “thrust” across the value stream.
6. Introduction of process performance measurement: The scope and system of process measurement depend primarily on the information system that the company has. It is a large database of information that needs to be processed and evaluated. Since it is a non-production sphere, the selected company must define its key indicators and performance measurements in this area.
7. Simulation and optimization of processes: The scope and system of process measurement also depend on the information system and the options it is able to offer. Simulation is an important tool primarily from the point of view of saving costs that would be incurred in the direct implementation of alternative solutions, but within the simulation, it is possible to model and verify various options from which the company decides on the optimal solution resulting from the specified conditions, it is a dynamic and currently preferred tool closely related to the next phase of improvement.
8. The process of continuous improvement: Perfection is a goal that is difficult to achieve, but setting a certain standard that the company wants to achieve is an essential principle for maintaining competitiveness in today’s dynamic world. In industrial production, it is a proven way to create opportunities to gain ideas that lead to gaining a competitive advantage through the motivational involvement of employees in this process, regular review of operating procedures, obtaining suggestions from employees who are part of the fulfillment of tasks and in closer contact with customers, creates new perspectives on how customers perceive value, which in turn points to new ways of eliminating losses and streamlining processes.

Application of the Balanced Scorecard to the Company under Investigation

The BSC methodology (Kaplan & Northon, 2007) means measuring and evaluating the company’s performance in various spheres of activity. It is also very well applicable in the non-production sphere. Since the goal of the submitted dissertation was not to introduce BSC into the company, in Fig. 1, a simplified general draft of a strategic map for a company defined in the area of service provision within the hotel industry is processed. The selection of appropriate key factors should reflect the company’s performance in four balanced perspectives. The strategic map represents an important element in the management of the company so that it is possible to correctly direct the strategy and incorporate the direction of the company into the provision of services of the highest possible quality. The stated strategic map serves as a support tool and is part of the analytical part of the work for the following process, which is the design of an optimized model of the hotel reservation system for the selected company and the generalization of the procedure, which should help a wider range of companies in the search for an optimal solution in the form of the resulting algorithm.

Fig. 1. General draft of the BSC strategic map.

A hotel product is often provided by many heterogeneous service providers that are made up of highly competitive and independent businesses. To maintain competitiveness, there is rarely teamwork among different service providers who should complement each other and use their common knowledge to promote their core competencies.

Table II shows the proposal of an innovative conceptual model for hotel service providers SHS/Strategic Hospitality Scorecard by Baierl and Steinhauser (2014), which was adapted for the needs of defining the framework conditions in the investigated company. The difference from the classical BSC model is that the SHS model includes an investigation within the stated perspectives from the point of view of stakeholders. It is an extension and transformation of the classic model into a matrix-shaped model. Aris software can also be used when creating strategic maps (ARIS, n.d.).

Table II. The Concept of BSC vs. SHS for the Provision of Hotel Services

1st 360° view		2nd 360° view
BSC dimension	SHS dimension	Manager perspective	Partner perspective	Customer perspective	Academic perspective
Financial perspective	Cost	Increase in direct booking	Revenue management and cost savings	Actual cost customer	Cost vs. revenue and sales management
Customer perspective	Online reputation	Creating a database of customer reviews	Professional management portal	The relation between reviews and bookings	Customer-generated content
Innovation perspective	Business models	New business model and new roles	Meta portal distribution and prices	Implementation of customer requirements	Innovation management in processes
Internal processes perspective	Employees	Lack of staff experience and consequences	Recruitment of employees	Implementation of customer requirements	Study instead of training directly in practice

The involvement of interested parties is due to the above-mentioned holistic approach in the value chain of the given company and the achievement of high quality in the complexity of the services provided. Stakeholders, according to Baierl and Steinhauser (2014), are hotel managers, service partners, key customers, and experts from the hotel industry. According to the authors, the main benefit of this approach is a 360° view of the company’s strategic framework from the point of view of individual perspectives and from the point of view of interested parties.

Even though the original idea of a balanced BSC is to expand the manager’s view of non-financial goals, the orientation in business is strongly focused on achieving financial goals is processed in Table V. This method means the following view of individual perspectives in the context of SHS:

Financial Perspective

Due to the ever-increasing impact of costs in the field of hotel service provision, the focus in this perspective is on costs and revenues. It is important to focus on defining the actual cost factors from the customer’s point of view to determine the correct area for their potential reduction.

Customer Perspective

It is a perspective from the guest’s perspective in the context of building an online reputation. Customer satisfaction and loyalty are very important from the point of view of sustainable success and further development of the hotel, building the so-called online reputation, and building a high-quality website that potential customers almost always visit before booking. The website should have current ratings of guests. It should be connected to the most famous booking and review portals; active communication with the customer is very important.

Innovation Perspective

This perspective focuses on innovations in business models, the introduction of new technologies that support e-tourism and increase competitiveness in the given sector, the creation of horizontal structures that are more flexible, the introduction of models of hotel reservation systems with the use of intermediaries, which, however, will not be based on fixed fees from the value of the order, but they are flexible in this regard, e.g., pay-per-click system, which, however, transfers a higher risk to the hotel, since the supplier of this service collects the agreed commission per click regardless of the following income resulting from the confirmed reservation (e.g., Trivago, TripAdvisor) when determining the optimal amount of the commission is important continuous monitoring and intensive communication between the hotel and the service provider.

An Employee-Oriented Perspective of Internal Processes

Regardless of the size of the hotel, employees are of fundamental importance to the hotel. Therefore, the recruitment and maintenance of qualified employees is one of the most important tasks of hotel managers. One of the challenges in the field of education is the intensification of skills and competence in this area. Large network hotels often require educated employees who have various certificates in the given field. It is important to innovate study programs focused on international hotel management at individual levels of education–bachelor’s, engineering, master’s, etc.

Key Performance Indicators Resulting from the Analysis of the Investigated Company

Within the hotel industry, providing a higher value to its customers is one of the strategic goals that merges with other goals that the company wants to achieve. Higher value provided by customers gives higher chances of returning guests, positive reviews, and referrals from satisfied customers, which will ultimately be reflected in the financial efficiency of the business. Based on the analysis of the indicators processed in the analytical part and experience in the given industry, it is possible to define standard indicators that are relevant for wider use in practice. The proposal of standard applicable indicators is processed in Table III and proposal model of BCS is processed in Table IV.

Table III. Proposal of Standard Indicators for Enterprises in the Hotel Industry

Enterprise in the hotel industry	Standard indicators
Management KPI	– Room occupancy rate=Numberofoccupiedrooms/Numberoffreerooms– Market penetration index=%Hoteloccupancy/%Marketoccupancy– Total income=Incomefromaccommodation+breakfast+bar+parking+othersourcesofincome– Labor costs as a percentage of revenues– Price per occupied room– Profit per room available
Financial KPI	– Average room price =Totalrevenue/Numberofroomssold– Average price per room per guest– Total revenue per available room =Totalroomrevenue/Numberofavailablerooms– Net revenue per available room=  Totalrevenuefromrooms−distributioncosts/Numberofavailablerooms– Profitability of rooms=Priceperoccupiedroom/Averagepriceperroomperguest
Customer KPI	– Average length of stay– Rate of customer satisfaction– Net promoter score– Online rating assessment
Sustainability KPI	– Energy consumption– Water consumption

Table IV. Proposal Model Balanced Scorecard (BSC) of the Investigated Enterprise

Perspective	Performance (%)
Financial perspective	53.63
Customer perspective	65.56
Perspective of internal processes	29.67
Perspective of education and growth	65.78
Overall performance	54.85

Table V. BSC Model of the Investigated Company Using MS Excel

Perspective	Target	The scale (/10)	Description	Performance (%)	Unit of measurement	Target value
Financial perspective	Labor costs as % of sales	3	Labor costs in % of total sales of hotel services.	30%	%	0%
	Annual operating profit per room	3	Annual operating profit per room available in the hotel.	15,000		30,000
	Food costs as a % of food sales	2	% of restaurant service costs from restaurant service sales	40%	%	20%
	% increase in labor costs	2	% increase in labor costs	20%	%	0%
	Overall performance			53.63%
Customer perspective	The number of positive feedback, or review	3	The number of positive feedback, or review (on a scale from 1 to 10).	9	Score	10
	Number of complaints received	2	The number of complaints received from customers regarding the services provided by the hotel (on a scale from 1 to 10).	3	Score	0
	Speed of response	3	Speed of response to customer requests	5	Min.	1
	Regular customers as % of the total number of customers	2	% of returning customers to the hotel	30%	%	100%
	Overall performance			65.56%
Perspective of internal processes	% of rooms booked through reservation channels	2	% of rooms booked through reservation channels managed by the hotel	25%	%	100%
	% of the reservation via the Internet	2	% of reservations received through Internet services	30%	%	100%
	Occupancy of rooms	2	Occupancy of rooms for the monitored period	60%	%	100%
	Sales conversion rate	2	Conversion of a reservation into a realized stay	30%	%	60%
	Average length of stay	2	Average length of stay of the customer	2	Days	4
	Overall performance			29.67%
Perspective of education and growth	Employee turnover	3	Employee turnover rate in the hotel	10%	%	0%
	Technological competence of employees	2	The ability of the staff to accurately use technological equipment such as POS, telephone, etc. (On a scale from 1 to 10)	9	Score	10
	Average length of employment	3	Average length of employment in the hotel (On a scale from 1 to 10)	7	Score	10
	Number of trainings	2	Number of implemented trainings	3	#	5
	Overall performance			65.78%
Overall performance/Balanced scorecard for the case study				54.85%

Financial Perspective

This perspective represents the top of the BCS map. It is about defining the financial interests of the owners, or shareholders, partners, in general it is about achieving a certain level of profitability. The way a hotel can increase its profitability is primarily:

1. In constantly growing productivity: In the case of a hotel, there is a reduction in operating costs (service costs per room) and optimization of the use of resources.
2. In the increase of income–in the increase of the current profitability, or by developing new sources of income (average price per room).

Customer Perspective

Customers can be hotel guests as well as various partners in connection with the provision of hotel services. There are two views on profiting within this perspective:

1. From the guest’s point of view: It is possible to achieve high profitability by focusing on high-value customers and fulfilling their individual requirements, it is necessary to incorporate this fact into the strategic map within the defined goals (“add and maintain high-value customers,” “excellent room quality”).
2. From the point of view of the partners: It can be a generally defined goal for the implementation of a win-win strategy or building the image of the hotel on reservation websites, the outputs from this approach are measurable by the opinions of users within the review, or evaluation of hotel standards by experts working in the field of quality assessment of provided services.

In this perspective, the close connection to financial goals such as “reducing costs” and “developing new sources of income” can be highlighted, as they are linked to the current project and services provided to hotel guests, within this perspective it is possible to contribute the most to increasing the profitability of business in the hotel industry.

The Perspective of Internal Processes

The introduction of a customer relationship management system can help to define the current value of the company and show the potential for its improvement, the introduction of a high-quality hotel reservation system increases the quality of the hotel in terms of processing current information about hotel occupancy, or analysis of feedback from customers.

The Perspective of Education and Growth

In this perspective, it is necessary to initiate the achievement of high-quality employees. It is necessary to reflect on the defined goals in the strategy in the sense of focusing on high-value customers. It is important to ask yourself the following questions in this context:

1. What are the expectations of our guests?
2. What additional services do they expect from us?
3. What are the main factors that influence guests’ feedback scores?

Conclusion

The presented case study deals with the modeling and optimization of non-production processes and systems in the hotel sector. The goal was to create a model of the hotel value chain and propose options for increasing efficiency in the given chain by applying lean tools and defining key performance indicators for non-production processes. Through the proposed methodology, it is possible to improve processes in the field of service provision, focusing primarily on the hotel industry, and to transform them from a classic model to a model with implemented lean tools. In the presented article, a hotel reservation system model is proposed, which is based on the use of lean techniques and tools successfully applied and used in the manufacturing sector.

The potential in the hotel industry can be seen in two directions:

1. Lean tools and techniques that can improve hotel performance,
2. Possibilities of applying lean thinking in the service sector.

With its results, the case study creates the potential to contribute to the elaboration of the issue of modeling and optimization of non-production processes and systems in a specific sector.