Operations Management

Evaluation of Operations Management

A financial institution is selected for the purpose of this review. To maintain its confidentiality this organization will be referred to as RCB Bank. This review is based on personal working experience in RCB Bank and reference to other materials such as internet and books on related subject. RCB Bank was established in July 1959 with its first branch located in Kuala Lumpur. RCB Bank was the first American bank to be incorporated as a subordinate company of the worldwide American bank.
It started with 17 employees and now has 5,500 staff of which more than 95% are local. It was localized in 1994. Now, this institution serves customers across 7 branches in KL, Selangor, Penang and Johor. RCB Bank offers both consumer and corporate banking services. It offers a range of banking and financial management service including credit card, loans, insurance and investment in consumer business. RCB Bank is a leading player in Malaysia credit card space, holding 20% market share in credit card usage.Corporate banking services offers a broad spectrum of financial services that includes treasury management, transaction services, securities custodianship, foreign exchange, fixed income, sales and trading and corporate finance to corporate clients, governments and financial institutions.
RCB Bank is the only foreign bank to be rated AAA by the Rating Agency Malaysia for 8 consecutive years a reflection of its effective operation management. Operation Management is the science and art of ensuring that products and services are created and delivered successfully to internal or external customers.Every organization’s ultimate goal is to maximize profit and improve its return on investment. To achieve this, a proper operation management is necessary. There are five objectives of operation management, namely Quality Speed Flexibility Dependability Cost All this five objectives apply to all type of operations (organization), including RCB Bank. The diagram below shows the bank’s transactional process flow. It will assist to illustrate how the five objectives integrate within the institution’s operation.

Quality The first objective discussed is quality.As many competitive organization, RCB Bank also emphasizes on its quality. It aims to always exceed customers’ expectation. For a financial institution quality means doing things right in the first time on processing coupled with knowledgeable and courteous staff. In its effort to ensure quality RCB Bank manages the following activities: •Staff training •Process documentation •Campaigns on quality. Staff training Staffs are given training that befits their station. A sales staff is trained on product knowledge, customer service as well as compliance to both internal and external regulations.
This is to ensure that they are able to provide quality service to the customer. The bank tellers and processing clerks are given high-level product knowledge training and more on the processes and compliance. This is to ensure a zero defect processing. Then there are the various levels of managers, all of whom are given the trainings that will enable them to support the organization’s drive towards quality. Process documentation This organization invested in getting ISO accreditation for its processes. This is a proof of the organization’s commitment towards quality.In order to obtained the accreditation the organization is required to document its processes and ensure that the quality aspect of these processes are given due emphasis.
Each department in the organization has the relevant processes documented. These processes are designed to ensure error free process, such as inclusion of maker and checker. New processes are added and obsolete ones removed. These documents are updated and reviewed on regular basis to ensure that they are current and remain relevant. Staff are required to read, understand and follow this standard processes.This is to ensure that the quality of the process is maintained throughout the organization. Campaigns on quality On regular basis this organization will launch campaigns to ensure that quality is maintained.
Among the popular ones are the ‘Zero defect’ and the ‘WOW’ campaign. As the name suggest, these campaigns are to encourage an error free processing and a beyond expectation customer servicing respectively. Staffs are encouraged to support the campaign and rewards are given to those who excelled in their achievement.The above are just some example of the tools applied by the organization in ensuring quality, hence gaining edge against its competitors. Speed Speed is another important objective for organization to have an edge against it competitors. Customer expect speedy fulfillment of their needs in various aspects of their lives i. e getting a passport or loans application.
In this millennium world, it is possible to provide instantaneous service like internet banking and phone banking. Customer could make their banking transactions electronically without having to physically go to the bank.This not only saves the customer precious time and money but provide convenience of banking from their own home. The institution has invested time and money in re-engineering processes to eliminate long and unproductive processes. An example of this is where previously customer is required to sign multiple forms in order to conduct transactions on the various banking products. With re-engineering, the institution has cut through the process and now requires just a single form to affect their banking. This contributes to a speedy service delivery, which benefits the customer.
With such implementation, it provides convenience and save cost for the customers. This institution will launch a process improvement program on regular basis. Staff is encouraged to provide feedback and suggestion to improve processes, which they are familiar with. Staff is being trained to re-look into the existing process and to eliminate redundant work without impacting the compliance and regulatory. An example of this is reduction of the numbers of hands off in a process i. e. approving Credit facilities where it used to flow across four departments.
After a brainstorming session, this process was reduced from passing through four departments to only two. This new process satisfies customer need for speedy deliver by reducing service turnaround time. Another move by the institution in ensuring speedy service is by keeping close watch on their staff availability to service customers. Capacity planning is done up to ensure adequate staff is available to meet customer demand in providing service within the turnaround time. Staff is trained to multi-skill so that they can support each other in time of staff shortage.This will ensure that the speed of service delivery is not affected. (Appendix I).
Flexibility Flexibility simply means the ability to adapt quickly and effective to changing requirements. This changing requirement can either be a change in the customers’ need for a product or service or a change in volume of demand. Although RCB Bank has limited branches in Malaysia compare to other banks, it still attracts wide range of customers from parts of the country where it has no branch represented. This is made possible through partnering with other non-financial institutions and designing innovative products.An example of this flexibility is the partnering with a well-known mobile company to provide fund transfer services to their customers. Funding of the funds transfer is made through mobile company who will then relay the instruction to RCB Bank to affect the fund transfer. This provides the convenience and flexibility to customer who may not even be a client of RCB Bank.
In terms of services, multiple choices are available to serve customer conveniently. Customer may do phone banking or internet banking.In addition, for the corporate client the bank also provides collection services, where the bank partnered with courier companies to service the customer needs such as collecting checks and other financial transaction request from their doorstep. With all these services being offered, customers can avoid the hassle of jam or looking for parking as they do not need to go to the bank and do their banking transactions. In addition, there is also the standing instruction service, which the customer can subscribe to, and the bank will handle the rest of the work on a timely hassle free manner.Flexibility to volume or demand Another example is in their ability to rise to the increase in demand during the festive season. During this time e.
g. Chinese New Year the bank may expect a higher volume of customer in the bank, mostly with the needs for new notes. The bank has made it convenient for the customers by dispensing new notes via the Automated Teller Machine (ATM). This will speed up the service as well as reduce the bank operating cost as the process of exchanging of new notes is now transferred from human to machine. DependabilityDependability is another objective of operation management. In a financial institution, it is important that both its system and human resource to be highly dependable. RCB Bank has a responsibility of meeting its customers’ expectation and deliver as promised.
System Dependability System dependability is fulfilled through various means. As a bank, it is expected that the Automated Teller Machine (ATM) and internet banking is available as promised i. e. 24 hours a day. In ensuring this, the bank has placed its IT support personnel to be on stand-by round the clock.In the event of breakdown of any of this channel, the supports will instant work on recovering the system. All system downtime are closely monitored and contingency plan evoke in the event recovery is not possible within the expected time frame.
Understanding the importance of system dependability, RCB Bank undertakes a system recovery exercise semi annually. Through this exercise the bank is able to gauge its system recovery time. This exercise includes all system, even the mainframe. Human Resource DependabilityIt is the bank’s responsibility to ensure that it can function even when it has human resource crisis such as during pandemic of any kind, strike or any form of emergency like ‘September 11’. In ensuring that service is not disrupted under such circumstances the bank has come out with Continuity of Business Plan. This plan is being tested semi annually, simulating a condition of such crisis. Staff is trained to be multi-skilled in order to ensure dependability.
Security of deposits Security of deposits is another form of dependability expected of a financial institution.The bank is responsible to ensure that customer funds are safe at all time. Security measures are being taken to ensure that physical cash are safe by employment of security guards, close circuit camera and vault. The bank also invested in system security to prevent hackings into customer data and funds. The Bank is also mandated to take up insurance for customers’ deposit via Malaysian Deposit Insurance Corporation (PIDM) as protection in the event the bank goes bankrupt. COST Last but not least amongst the objective of operation management is cost.Cost refers to cost of operation which includes both capital costs and annual operating costs (fixed cost and variable cost).
In order to remain competitive and profitable, an organization needs to keep their cost as low as is compatible with the levels of quality, speed, dependability and flexibility as demanded by their customers. There are many ways cost can be contained. An error free operation not only projects quality but also help maintain cost low as no costly rework needs to be done. No personnel required to pacify irate customers. RCB Bank aims for zero-defect processing in its operation.It also embarks on process re-engineering to reduce the processing time, eliminates redundancy and reduces usage of stationeries, RCB Bank also invested in automation. Though this adds to fixed cost it helps reduces annual operating cost.
An example of this is internet banking. With internet banking, RCB Bank managed to reduce cost through reduction of manpower. With reduction of manpower, rentals are reduced, as less workspace is required. As internet banking also means error free processing it also contribute to cost reduction and quality. ConclusionIn summary, it can be seen that RCB Bank has successfully applied the five objectives of operation management in meeting its business goal, namely in maintain good return on investment (ROI). RCB Bank needs to continue its effort in producing more innovative product and services. This is because the competition is great and before long its winning ways will be copied.
In order to continue being a market leader and having an edge over its competitors, it will need to continue delivering new products and services that exceeds customers’ expectation and keep them satisfied.

Operations Management

Operations Management Narrative Essay

QUESTION 1 Operations management must be managed properly in order to improve an organization’s productivity and profitability. In the Cadbury World case, several micro and macro processes are involved and those processes bring some impacts to Cadbury World. Thus, Cadbury World must possess a sustainable micro and macro processes to achieve the best outcome and performance. Micro processes that involved are easily to manage compared to macro processes because macro processes are hard to manage or manipulate (Jae, Shim, Joel & Siegel, 1999).
As a result, Cadbury World must put more efforts in solving the obstacles and troubles that occurred within the macro processes. First of foremost, we will be discussing the micro processes that involved in Cadbury World case. Within the micro processes, they can make some planning on their operation and strategic management processes to enhance their business and profitability. Micro Processes| Explanation and elaboration| Company| * Cadbury has set up a team to improve their operation management. * More tickets collectors have been assigned in the exhibition centre to manage and help visitors when they need assistance. Cadbury is always open for criticism, feedbacks and recommendation to improve their operation management. | Customers | * Cadbury always attempting to fulfill all the requirements and needs from their customers and ensure their customers will have a wonderful trip in their exhibition centre. * This is because customers will affect their reputation and brand name if they are not satisfying with the services and products that provided (Galloway, 1998). * Other than that, Cadbury has launched some new products and add more elements into their exhibition programme to attract more visitors and customers. Competitors| * Cadbury World has implemented SWOT analysis to identify their strengths and weaknesses and also the opportunities and threats from their outside environment. So that, they are able to gain the competitive advantage among their competitors. | Intermediaries| * Cadbury requires several marketing intermediaries in promoting their activities and products. * As such, they have selected some marketing intermediaries to promote this Cadbury World exhibition event and help them to gain the profits. | Suppliers| * It is crucial to select the best suppliers to enhance the production of Cadbury.
Due to this, Cadbury has implemented some analysis and works when choosing their suppliers because they always ensure their products have the high quality that can fulfill every customer’s requirements. | Table 1: Micro processes as applied to the case Cadbury World Macro Processes| Description | Demographic| * Several analysis have been implemented to analyze the preference and needs among people from different demographic profile. * This is because demographic profile is crucial when managing the requirements from different customers. Those analysis can be done according to several groups such as gender, age group, nationality, likeliness. | Natural| * Cadbury always seek for alternatives although their natural resources are still available and still able to support their operation and production. * This is because they believed that natural resources will be finished exploited in one day. So that, they want to put some efforts before the day to come. | Economic| * Economic trend must be aware from time to time to prevent Cadbury World business being affected during the economic crisis. Technological| * Cadbury always conscious and aware with the new technological and applied the technological elements into their operation system to gain the higher profits. * Besides, with the technological elements such as automated system or centralized system can help their operation system become more efficient and easy to manage the visitors that entering their exhibition centre. | Table 2: Macro processes as applied to the case Cadbury World Figure 1: Input-Transformation-Output model (Cadbury World case) The model of input-transformation-output in Cadbury World case has been displayed in Figure 1 above.

This model consisted of micro and macro processes because as mentioned earlier, micro and macro processes are very important for the operation processes in an organization. From the figure above, we will be discussing the micro processes of Cadbury World case in the form of input-transformation-output model. Those micro processes are company, customers, suppliers and competitors. Cadbury needs a lot of human resources such as manpower to carry out their daily operations process. Those manpower with the technological methods are essential to convert the raw materials from the input to the transformation process  (Tilanus, 1997).
After that, the incomplete goods that in the transformation process will turn into the outputs which are products and goods that introduce to the markets. When the products introduced to market, Cadbury may get some feedbacks from publics or their customers and also their competitors. Hence, Cadbury must do some amendment on their operation processes within the internal management in their organization or review their suppliers to enhance their operation process. QUESTION 2 Process flow chart to show the ways of customers are being processed through the operation from start to finish
The process design that adopted by Cadbury World case is the product-based layout because the arrangement of the equipments in every section of the exhibition centre are clearly displayed in a logical sequence. Hence, the process design can provide the better understanding to their visitors if they wish to take a tour without guiding. This is because the product-based layout can eliminate the confusion of the visitors as the process flow is predictable and repeatable (Thompson, 1967) . QUESTION 3 3. 1: The capacity of each processes in question 2 above The entrance 5-20 visitors x (60 minutes / 2-1/2 minutes) = 360-480 visitors per hour The Marie Cadbury room * Original design (70 visitors x 1/3) x [60 minutes / (5 minutes + 1-2 minutes + 4 minutes)] = 131-144 visitors per hour * Peak times 70 visitors x [60 minutes / (5 minutes + 1-2 minutes + 4 minutes)] = 382-420 visitors per hour The packaging plant 30 visitors x [60 minutes / (3 minutes + 8 minutes) = 164 visitors per hour The demonstration area (15 visitors x 8 guides) x (60 minutes / 6-17 minutes) = 424-1200 visitors per hour * The shop [(60 minutes x 60 seconds)/15 seconds] x 3 checkouts = 720 visitors per hour * The restaurant: If the tables are allowed to sit with different families or groups of visitors (60 minutes/25 minutes) x 169 covers = 406 visitors per hour * If the tables are allowed to sit with one family or same group of visitors (60 minutes/25 minutes) x 53 tables = 128 visitors per hour The coffee and ice-cream parlour (60 minutes/18 minutes) x 46 covers = 154 visitors per hour 3. 2: The projected annual, weekly and hourly demand from the data in the case (Mid August to end of December 4. 5 months). Explain the impact of seasonality on these figures. 1. The Entrance: 2. 5 minutes 2. The Marie Cadbury Room: 10 – 11 minutes 3.
The Packaging Plant: 11 minutes 4. The Demonstration Area: 6 – 17 minutes 5. The Shop: 15 seconds = 0. 25 minutes 6. The Restaurant: 25 minutes 7. The coffee and ice-cream Parlour: 18 minutes After reviewing the case of Cadbury World, we can understand that the time required for each station in the case of Cadbury World when during the normal period are 84. 75 minutes / 3. 53 hours and 72. 75 / 3. 03 hours during the peak periods. Therefore, the projected demand are as below:- 1. Annual demand = 4. 5 x 30 x (3. 03 – 3. 53) = 409. 05 – 476. 55 hours 2. Weekly demand = 7 x (3. 03 – 3. 53) = 21. 21 – 24. 71 hours 3.
Hourly demand = 3. 03 – 3. 53 hours Holiday season, weather, national celebration or event such as election can cause some impacts of seasonality that affect Cadbury World business and operation. From the Cadbury World case, the period of the exhibition event is held from mid of August to the end of December. During that period, Halloween and Christmas might influence their operation as people may wish to take a short travel to refresh themselves during these holidays. As such, Cadbury World can be a better selection. However, when the demand of seasonality increased, Cadbury World needs extra capacities to support their operation.
If not, they will face some bottlenecks and affect their overall performance and profitability. QUESTION 4 4. 1 The ways that Cadbury world management has varied capacity to respond to changes in demand When the business of an organization is boosted up, this means that the demand has been increased as well. Thus, the organization need more capacities to prevent they fall into bottlenecks (Stevenson, 2010). In Cadbury World case, some bottlenecks might be occurred if they didn’t varied the capacity to respond to the changes of demand. Firstly, more ticket collected have been arranged accordingly in the entrance area during peak period.
Those ticket collectors will apply the technological system such as automation system to handle the situation in the exhibition centre and also the safety of their visitors. Besides, Cadbury internal management team have implemented some actions to enlarge the space of parking lots during the peak period. After that, the shop, restaurant and ice-cream parlour areas will be amend to cater more visitors. 4. 2 The operations that occurred the bottlenecks in the process and the ways that service can be amended to increase bottleneck capacity. Where are the bottlenecks in the process? How could service be amended to increase bottlenecks capacity? | The entrance| * Introduce online ticketing to reduce the time that needed to purchase the tickets. * Utilize information technology system to handle the safety of visitors that enter the exhibition centre. * Enhance the dependability and speed in the exhibition centre to provide the convenience to visitors. | The exhibition area| * Boost up the efficiency of Cadbury staffs that handle the visitors that enter this area. * Apply micro operation system and information technology method to reduce the delays problems and also eliminate the workload of attendant. Improve the process flow in Marie Cadbury room as it is the bottlenecks in this section. | The packaging plant| * Change the areas that show the brief videos. * Such as displaying the brief videos in the areas before entering the packaging plant to give a brief explanation and understanding to visitors. | The restaurant| * Amend the process flow because current process flow is inconvenient to visitors. * Redesign the serving points and serve more variety of food in each serving point. * So that, visitors can enjoy their favorite food without passing every serving points. The restaurant design can amend to a round shape instead of row arrangement to increase the flexibility to visitors. | LIST OF REFENCES Galloway, L. (1998) Principles of Operations Management. India: ITP. Jae, K. , Shim, Joel, G. & Siegel (1999) Operations Management. USA: Barron’s Educational Series. Stevenson, W. J. (2010) Operations Management. An Asian Perspective (9th Edition). New Zealand: McGraw-Hill. Thompson, J. (1967) Organizations in Action. New York: McGraw-Hill. Tilanus, B. (1997) Information Systems in Logistics and Transformation (2nd ed). USA: Elsevier Science Ltd.