Operations Management OM Tools Term Paper

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Operations Management Tools

Headquartered in Las Vegas, Nevada, Harrah's Entertainment is the world's largest gaming company (Harrah's Entertainment, Inc., Hoover's) with revenue of more than $4.5 billion in 2004 and a one year sales growth of over ten percent. Harrah's owns, operates, and/or manages more than forty casinos (under such names as Bally's, Caesars, Harrah's, Harveys, Horseshoe, Showboat, and Rio) in four countries. Its operations include casino hotels, dockside and riverboat casinos, and Indian gaming establishments. Harrah's success is based on a very successful operations management system called Winner's Information Network (WINet) that has fueled customer-driven operations and marketing programs.

Instead of building glitzy casinos with attractions such as volcanoes, sinking ships and replicas of the Eiffel Towe to stay on top in the competitive gaming industry, Harrah's developed a service-oriented strategy based on collaboration (Levinson, 2001). In the mid-1990's, Harrah's implemented WINet in order to execute its strategy. WINet was an innovative operational management system that linked all its properties and allowed the company to collect and share customer information across all properties. WINet consolidates data from all of the company's transactional, slot machine, hotel management and reservation systems. Every transaction is instantly loaded into the WINet database, and the information collected is immediately accessible throughout Harrah's facilities.

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Thus, all reservation agents have real-time access to a customer's history and marketing uses the data to create individualized marketing programs for customers. According to Levinson, WINet is credited with changing Harrah's corporate culture "from an every-casino-for-itself outfit to a collaborative, customer-focused enterprise."

What Harrah's WINet has done that is different from other approaches is link its different databases to create a complete profile of its customers -- their hotel information, what games they play, what they spend in retail outlets and what entertainment they like (Gerwig, 1998). Thus, it's not just useful for marketing people, rather it empowers all employees to have ready access to information to improve operational decisions. WINet paved the way for a very successful national loyalty program called Total Rewards that targeted and rewarded customers (Harrah's uses science to stimulate sales). Unlike many loyalty programs that focus solely on marketing to customers, this program drives real-time service as well.

Essentially, patrons apply for a Total Rewards loyalty card and earn points by gambling and spending money in the casino (Harrah's uses science to stimulate sales). Harrah's assigns cardholders a "customer value" based on the expected revenue they….....

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