A case study which I really enjoyed analyzing this semester titled Implementing LEAN Operations at Caesars Casinos, encouraged me to understand process improvement further.
After the Great Recession in early 2008, organizations including Caesars Entertainment, needed to cut down on costs, increase customer spending and ultimately save their businesses. How do you do such a thing? You either reevaluate your business model or/and improve your internal operational model. Brad Hirsch did just that when he was appointed Regional Director of LEAN for the three Caesars casino locations in Tunica.
Brad Hirsch clearly implemented the correct LEAN tools and encouraged Caesar’s Tunica location to become the success story that it is today. Over the course of 63 kaizen events and the investment of 14,000 hours by employees, there are three elements that I can identify to be the reason the improvement process was so important for this Caesar Casino location.
Firstly, customer service plays a vital role in the image and success of all Caesar locations and in order to track customer satisfaction, a random group of customers from multiple locations would be asked to complete a survey ranking their recent experience. “Data showed that moving a customer from a B to an A score resulted in up to a 12% increase in customer spending.” As a result of increased scores at the end of each quarter, employees would be rewarded with bonuses also. However, all employees, from desk clerk to janitor, had to be part of the change to make increasing scores more likely and not just a select few. This was a challenge that the Tunica executive team had to face. Gemba walks and spaghetti diagrams, activities that were part of kaizen workshops implemented by Hirsch, helped employees recognize time, motion and transportation waste which they could alter to provide a faster and more efficient customer experience. As result of these small cuts and changes, Tunica saw upward of a 3% shift in customer satisfaction scores in most areas.
Another benefit that was derived from the process improvement approach at Tunica, was the $3 million in documented savings. LEAN concepts such as DOWNTIME, Gemba walks, Five whys and 5S especially, contributed to identifying vast amounts of physical waste that could save the location an incredible amount of money in the long run. During a kaizen event, the dry-goods storage room was organized and followed by duplicate items and expired items being discarded. “The kaizen team studying the dry-goods storage area discarded $8,000 worth of unused inventory”. I can only imagine the frustration that the kitchen staff and exec team must have felt when being relayed this message. The 5S two bin system also helped sustain good inventory levels on slot paper and provided an improved system to track supply before ordering more. In this instance, “this system eliminated unnecessary orders and reduced the annual inventory investment by $60,000”.
Across the multiple kaizen events that were held, “25% – 90% of the waste was eliminated.” The Tunica team would need to continue to practice these LEAN tools every month or so in order to keep on track with inventory, avoid old habits and maintain a more efficient and easy-to-run workflow. The money that the Tunica team could save on back-of-house inventory could be put to better use where their customers could benefit.
Finally, I think employees are one of the most important groups to focus on in this whole operation. Yes, your customers are who bring in the money, but your employees are the reason those customers return and additionally the reason the business can run a daily operation. Hirsch made the smart decision to involve as many Tunica employees as possible when implementing LEAN tools. When focusing on a particular department, employees of multiple functions and levels were asked to form a team that could help improve their specific department to run smoothly, eliminate any unnecessary action or inventory and improve employee satisfaction overall. If your employees are happy, then they will be more willing to go the extra mile for their customers and fellow employees alike. After the week’s events, an accounting clerk stated, “It was great to be considered an equal participant and to have input on big decisions that affect our work and department”, while others responded that it made their jobs a lot easier and stress-free. Having employees at all levels feel appreciated and considered, encourages the work mentality to constantly improve, and overall benefit the organization. Many present-day businesses use a top-down approach when it comes to managing employees and sometimes this approach isn’t always beneficial. Suzanne Lucas wrote an article published on TheBalancedCareers.com, that focuses on four main reasons why top-down management doesn’t work. These include “You Miss out on Great Ideas”, “It Kills Employee Engagement”, “Succession Planning Is a Disaster” and “Your Employees Are Micromanaged”. Although managers hold their titles for a reason, a workplace can only work if they are open to ideas from all and encourage employees to feel appreciated and heard.
LEAN tools can be implemented and positively affect all types of business models and Hirsh was able to prove that as a result they can save a business too.
Hyer, N. L., Hirsch, B., & Brown, K. A. (2014). Implementing LEAN Operations at Caesars Casinos. Harvard Business Publishing Education. https://hbsp.harvard.edu/cases/.
Lucas, S. (2019, June). The Perils of Top Down Management to Your Organization. The Balance Careers. https://www.thebalancecareers.com/perils-of-top-down- management-4151058.