Operating Management of ANLG Bank - Inputs, Outputs and Transformation Processes - Assignment Example

Operations Management: Case Study Student’s Name Course Tutor’s Name Date: Q1: The Case of ANLG Bank a) Discuss the major inputs , outputs and transformation processes involved and how would you classify them i.e. transforming or transformed inputs The major inputs in ‘call centres’ include: customers, phones, information by customers, call centre operators, the call centre facility and the inbound call screens. Customers, the information they provide, phones and the inbound call screens are transformed resources, while the call centre operators and the call centre facility are transforming resources. The major outputs include customer satisfaction by having their queries answered and/or their concerns addressed. The transformational processes involve getting information about the customers’ bank accounts, their queries, and or concerns, and addressing them in the best possible way according to the operator’s knowledge. The major inputs in ‘credit control’ are the customers, the customers’ accounts, and the back office operators who include the personal team and the corporate credit control team. The customers and their accounts are transformed inputs, while the back office operators make up the transforming resources. The major outputs include cheques and/or letters. The transformational process involves interpretation of the customers’ account status and decision-making on whether to bounce cheques or send letters to the customers who exceed their overdraft levels. The major inputs in ‘voucher processing’ include courier services, the cheque encoding machines, the customers, and the human resource working in that department. The courier services and the customers make up the transformed inputs, while the cheque encoding machines and the HR staff constitute the transforming inputs. The major output includes processed cheques. The transformational processes involve receiving the cheques from the courier and processing them through the cheque encoding machines. The major inputs in ‘High net worth banking’ include customers, phones, meeting places preferable to the customers, and account executives. The customers and phones constitute the transformed resources, while the accounts executives and meeting places constitute the transforming inputs. The major outputs include customer satisfaction attained through properly addressing the customers’ queries or concerns. The transformational process involves obtaining information from the customers and handling it in a manner that generates a personal touch and satisfaction. b) Determine the similarities and differences between the four divisions using the “4-V’s” approach. The 4V’s framework as proposed by Slack, Chambers and Johnston (2007) will look as follows when applied to the four centres at ANLG Bank: Call Centre Credit Control Voucher processing High Net-Worth Banking Volume High volume – involves repetition High Volume – everyday, the centre gets a list of customers who have exceeded their overdraft levels High Volume – cheques arrive by courier and Monday is the busiest day High volume – customer queries may be made by phone or a customer may demand for a one-on-one service Variety Low – call centre’s efficiency in delivering customer service depends on the number of callers seeking to speak to customer care attendants. At night, one may get faster services while one may have to wait during the day Low – credit control does not offer much flexibility. A customer is either denied the services (e.g. a bounced cheque) or attended but with a reminder letter indicating that they have exceeded their overdraft levels. Low – voucher processing does not offer much variety because the processing depends on whether the vouchers are delivered in good time, the number of vouchers waiting to be processed, and the functioning of the voucher-processing machine. High – if the bank does not satisfy their high net-worth customers, other competing banks will. Variation High – customers call more during the day compared to night time Low – everyday, credit control gets a list of people who have exceeded their overdraft levels. High – Monday and before Christmas are very busy days for voucher processing High – customers are unpredictable despite being extremely demanding Visibility Low – the customers contact call centre staff through phone calls Low – credit control is a back office operation Low – the voucher-processing machine does a lot of the work. Customers and staff do not interact Mixed (high and low) – although some customers place their concerns, queries or comments via telephone calls, others prefer to be served on a one-on-one basis by the bank’s executives. c) Discuss to what extent you think a common set of principles apply and what are the different skills and approaches to “fine-tuning” the improvement activities that Jan speaks about. According to Slack et al. (2007, p. 22), “high volume, low variety, low variation and low customer contact help keep costs down”. Going by the aforementioned quote therefore, the common set of principles that all departments at ANLG bank can apply is keeping variety, variation and visibility low, while enhancing volumes. To fine-tune their operations, and in recognition that the four departments are different, each department would need to develop skills and approaches that serve their respective principles of keeping the volumes high and keeping variety, variation and visibility low. High net-worth banking specifically needs to work towards lowering all three aspects (variation, variety and visibility), while the other departments need to work on an aspect each. -- Question 2: The Case of St James’s Hospital a) Discuss the elements in St James’s new approach that could be seen as deriving from lean principles of manufacturing Lean manufacturing is described as a philosophy that seeks to eliminate waste and defects by pursuing perfection (Correa, Gil & Redin 2005). At St. James’s Hospital, lean manufacturing is evident in that by streamlining suppliers, the hospital has been able to get the exact products that the hospital staff need at a much lower cost. For example, the hospital identified cheaper gloves to replace the almost 20 different types that were previously ordered by the hospital, some costing as much as £1. Additionally, the hospital adopted a just-in-time (JIT) ordering system that ensured that items were delivered as requested and that there was no wastage of supplies, money, time or goodwill as indicated by Womack et al. (2005). The manner of ordering syringes is one such JIT approach, where a storeroom in one of the wards has two boxes for 10-mm syringes only. This means that the resources that would otherwise be tied in too many 10-mm syringes’ stocks would be free to be utilised elsewhere. It also appears that St. James’s Hospital is pursuing a model of its work being error-free. For example, by reorganising the process of admissions to urology, the hospital has been able to make the surgery admission process much reliable, faster and cheaper. As indicated by Correa et al. (2005), operations management in hospitals must ensure that physical and emotional safety of the patients is enhanced. Cancelling the surgery of a patient who had been scheduled for the same as would happen at the hospital before the operations were streamlined arguably went against their physical and emotional safety. Overall, the changes at St. James’s Hospital dealt with the seven wastes in health care as indicated by Correa et al. (2005). The wastes that have been minimised include: overproduction (10-mm syringes are ordered in a JIT manner); transportation (only goods that add value are transported to the hospital – e.g. a smaller supply of gloves is now supplied to the hospital without compromising quality and safety); motion (people no longer have to reschedule treatment – e.g. in urology department – unnecessarily); waiting (the idle time that was previously wasted when equipment, people, materials or information were not ready has been minimised); processing (the hospital has reduced the number of suppliers it deals with, and has also been able to get better value and better bargaining leverage as a result of the re-organisation); inventory (it would appear that the hospital now orders what its staff and patients need); and defects (the re-organisation has reduced the probability of errors, mistakes, or the absence of vital inputs needed for use by staff and patients). b) What further ideas from Lean manufacturing do you think could be applied in a hospital setting such as St James’s? Other lean manufacturing ideas that can be applied in hospital settings such as St. James’s Hospital include the “attitude of continuous improvement”, which as Toussaint and Berry (2013, p. 74) note, recognises that lean management is not an event; rather it is a continuous process that involves a cultural transformation in the organisation. In this case, the management and service providers at St. James’s Hospital need to understand that lean management calls for them to adopt a new attitude that is open to change in addition to new skills and habits, which constantly look for better ways of doing things. Value creation is also another lean management principle that St. James’s Hospital and other hospitals can use. According to Toussaint and Berry (2013), value provision for patients should be the underlying theme in lean management in health care settings because health care is primarily for patients although other stakeholders benefit as well. Unity of purpose is also another lean management principle which Toussaint and Berry (2013) cite as being pivotal in the effective management of the complex systems in health care institutions. Unity of purpose enables the management to clarify priorities and guide the staff towards executing duties in an improved manner. Respecting people “who do the work” is also another lean management principle applicable in health care institutions as suggested by Toussaint and Berry (2013, p. 78). The foregoing argument means that the top management would have to respect and support the innovations, input and opinions of front-line workers. The managers would also need to teach and be role models in quality improvement, and may also have to invest in training and development in order to equip the front-line workers with the necessary skills (Toussaint & Berry 2013). Visualising lean management (e.g. in areas of quality, cost and patient satisfaction metrics) is also a principle that hospitals might consider applying and using in staff-only areas. Such visual displays of the lean management process also enable hospital staff to propose or post improvement ideas or communicate issues that need to be addressed. Finally, flexibility is another principle that health care institutions such as St. James’s Hospital can apply. Toussaint and Berry (2013) note that flexibility allows for processes and performances to be re-inspected for weakness and shortfalls, and for re-designs to be executed in order to enhance the management. References Correa, G A., Gil, M J A & Redin, L B 2005, ‘Benefits of connecting RFID and lean principles in health care,’ Universidad Carlos III De Madrid Working Paper, no. 05-44, series 10, pp. 1-13. Slack, N, Chambers, S & Johnston, R 2007, Operations management, Pearson Prentice Hall/Financial Times, Upper Saddle River, New Jersey. Toussaint, J S & Berry, L L 2013, ‘The promise of lean in healthcare,’ Mayo Clinic Proc., vol. 88, no.1, pp. 74-82. Womack, J, Byrne, A, Fiume, O, Kaplan, G & Toussaint, J 2005, ‘Going lean in health care,’ Institute of Healthcare Improvement, pp. 1-21. Read More