Applying Root Cause Analysis in Developing an Empowerment Program for an Emerging Hospitality SME in Bali

Warung Pantai Seseh is an emerging SME in the food and beverage service industry on the shore of Seseh Beach in Cemagi, Badung, Bali. Started by a young entrepreneur in 2020, this family-owned business has experienced rapid growth amid the Covid-19 pandemic due to its ‘hidden gem’ status and easy-going nostalgic ambiance. As the business proliferated, Warung Pantai Seseh partnered with a team of lecturers and students from Universitas Dhyana Pura for an empowerment project centered around business development and capacity building. This article explores the authors’ efforts in applying the principles of Lean Six Sigma (LSS) principles with particular attention given to Root Cause Analysis (RCA)—to clearly define, measure, analyze, improve, and control the areas of improvement for the hospitality-based SME. Three priority areas were defined: (1) capacity building for the service staff, (2) adherence to hospitality standards, and (3) business and marketing strategy, with an overarching problem to be addressed, i.e., stagnancy in the average spending per person (ASP) at the F&B establishment. Using RCA, the authors were able to identify and address five specific areas of improvement: (1) material, i.e., the F&B menu, (2) method, i.e., SOP related to the sequence of service, (3) human resources (workforce), i.e., staff knowledge and skills, (4) machine/equipment that are compliant to hospitality and CHSE standards, and (5) marketing, including branding elements, marketing strategy, and digital marketing implementation. The steps and specific actions taken using the DMAIC framework are discussed in the article. Results and lessons learned from applying LSS and RCA in this SME empowerment project are also discussed.