Service Operations Management - Customer Satisfaction - Essay Example

Running head: service operations managements Service operations management The present context describes the role of capacity planning and bottleneck management in service operations of a banking payment services. Based on capacity planning practices, possible ways of execution of payment services have been briefly explained. A few constraints have been identified and possible resolutions have been recommended. Introduction: One of the objectives of service operations is customer satisfaction, which in turn has a significant impact on the business performance. Considering the payment services of a bank, for example the Hongkong and Shanghai Banking Corporation (HSBC), which are highly critical services and need absolute customer focus besides thorough banking knowledge and skills and effective operations management. Service operations management is a large and critical business sector. Besides customer satisfaction, service operations managers are also responsible for continuous improvement and cost-saving objectives. These are to be achieved with the available resources such as materials, staff, equipment and process technology (Johnston & Clark, 2008). Service operations management also requires specialized skills and competencies in terms of the five main management functions, planning, organising, leading, coordinating and controlling. These five core functions are achieved through strategic planning and management, effective leadership, technology and skills, and human resources management. In general, these functions seem quite similar to any other service/production management; however, the practices, policies, and approaches differ in the service industry. In service operations, all operational functions are pre-planned and assessed in terms of costs, infrastructure, staffing etc; these operational functions require the support of other functions like the administration, facilities, human resources department, training and quality assessment departments etc. All functions are strategically aligned to the organisation’s main goal. Among HSBC’s five core business principles, customer service, effective and efficient operations, strict expense discipline through teamworking and organisational commitment form the grounding principles for carrying out efficient service management (HSBC Holdings plc, 2001). Amongst the hundreds of different services provided by the global bank, payment services forms one critical unit and service which has sound impact on its customers as well as the bank itself. Capacity planning is the process of calculating the capacity of materials, personnel and/or other resources needed to provide service to the customers. This process involves determining the capacity required for providing service to forecasted number of customers or volume of work at each branch or unit at each time (Chase, Nicholas & Jacobs, 2001). In service management, especially payment services that work real time, services need to be produced on real time basis. Hence, capacity must be available and have the capability of producing services at desired levels. Capacity planning in payment sector is based on workload and manpower besides technology and space. In a typical banking firm, like HSBC, capacity planning is done based on previous work volume and pattern forecast, benchmarked targets and service level quality in line with organisational principles in terms of efficiency, accuracy and speed. From structure perspective, capacity planning should include applications and data, technology systems, number of work stations and infrastructure. While the bank has to provide world-class services to retain its competitiveness and customers, it should also be equipped to handle larger volumes of work, which requires periodic revision of strategies and procedures followed at payment services. One important strategy followed at banks is to cross train employees from other departments to work for payment services during high demand. Inefficient capacity planning and management can result in service chaos, payment errors and customer dissatisfaction; therefore, effective outcomes from resources also require appropriate management and effective leadership. Considering payment services to be a critical and sensitive business, usually the work is sequenced on a first-come first served (FIFO) basis. However, to process large value payments for high business customers, the bank offers service to the most critical or most valuable first. Otherwise, the FIFO pattern works best for the usual payments. In order not to disturb the FIFO customers, the bank uses specially trained personnel to deal with most critical and most valuable customers. The bank implements different kinds of effective control systems. HSBC payment services uses technology to serve complex and expensive customers through regular automated payment transfer systems. Designing specific processes with standard operating procedures to ensure satisfactory payment transfer to the end customer helps in providing efficient service (see figure a). Other spheres requiring effective control systems in payment services include fraud-free and error-free payment mechanism for which the bank relies on appropriate technology that is tried and tested many times before putting into use. Secondly, personnel working in this section are highly trained on the system and process. Capacity management is not complete with planning and allocation, but also requires identification and resolution of issues that could be potentially reducing efficiency, in other words, bottleneck management. For instance, the high and low demand in service can be addressed through effective capacity management; however, erroneous payment transactions could create issues such as customer dissatisfaction and rework that would require additional capacity. This eventually results in revenue and reputational loss for the bank. Erroneous transactions can be stopped by introducing strong control and checking process before the payment is sent out. Redirecting the payment for correction or verification of the error would save much time compared to complete investigation and correction after the payment is processed (see Figure a). Another bottleneck for payment services in banking sector is complete halt on payment processing due to factors such as data loss, technology breakdown, or any other catastrophe that could potentially stop payment processing function of the bank. Risk assessment and planning for such events could save much revenue and reputation for the bank. This can be accomplished by having a business continuity plan in place (Rottinghouse & Ransome, 2005). For this, payment processing should be carried out from more than one location or capacity should be developed at other locations to continue service during disaster. Managers should ensure that selected personnel are trained on payment processing. Within the bank, it would be possible to access customer information and payment technology; however, they should ensure enough workstations are available to carry out similar service operations. In conclusion, looking at the impact capacity management can have on service operations and customer service, this task forms the core function of service operations management. Capacity management can actually decide the revenue of the business; customer satisfaction greatly depends upon capacity utilization; thirdly, capacity management is a dynamic function in service operations, especially in sensitive and critical operations like payment services. Identification of bottlenecks in operations and their management helps in improving efficiency and quality of services provided, thereby improving revenue and customer satisfaction. References Chase, R.B, Nicholas, J.A, and Jacobs, R.F. (2001). Operations Management for Competitive Advantage. Ed 9. McGraw-Hill Irwin. HSBC Holdings plc. (2001). HSBC Holdings plc: Silent Social Report 1999-2000. Retrieved from, http://www.st-andrews.ac.uk/~csearweb/aptopractice/SilentAccountHSBCSilentReport-RHG1.pdf Johnston, R and Clark, G. (2008). Resource Utilisation. Service Operations Management: Improving Service Delivery. Ed. 3. Prentice Hall. Rottinghouse, J.W and Ransome, J.F. (2005). Business Continuity and Disaster Recovery for Infosec Managers. Oxford, UK: Elsevier Digital Press. Figure a: PAYMENT PROCESSING – FLOW CHART Read More