POM ISSUES AND

ANALYSIS
FIRST
GLOBAL BANK
THE CHANGING FINANCIAL
ENVIRONMENT

Featuring
Gerron Thomas as Himself
and Brian Winter Governor
of the B.O.J.
Kevin Whitehorn as Himself
and Michael lee Chin
Chairman NCB
Novelette Johnson Williams
as herself and Mina Israel
Executive Director RBC

Featuring
Rose Bachan as herself and
CFO of JMMB Donna
Duncan.
Karekia Brown as Herself
and Joan Webby Chairman
of First Global Bank.
EBBA5 Students as
themselves and head of
various financial
institutions.

Scne1
Governor of the B.O.J. and head
of financial regulations invites
some top executives to the
annual Bank Operations
Management Summit
Discussions include The
operations management
function, and changes in the

The Changing Financial

Environment
The financial environment
includes managers from the
different functional areas within
the respective firms and
organizations such as Operation
Managers, Human Resource
Managers, Finance Managers and
Marketing Managers.

The Changing Financial

Environment
Of the managers listed the
operations manager is most
central to all functional areas
and his/her job function would be
directly impacted by any change
in the financial environment and
is thus key in the coordination of
all business processes.

The Changing Financial

Environment
Various changes such as
recessions, globalization,
mergers and acquisitions,
liberalized domestic regulation,
intensified international
competition, rapid innovations in
new financial instruments.

The Changing Financial

Environment
Considering the banks roles and
responsibilities key factors that
are affected as a result of
changes are;
Demand and supply of products and
services
Cost of providing quality products and
services
The rate of response and innovation
employed by the bank.

SCENE2
GOVENOR PHONES TEAM OF
AUDITORS TO EXECUTE UNANNOUNCED INVESTIGATION ON THE
TOP BANK FIRST GLOBAL 6 MONTHS
AFTER THE REGULATORY BODY MADE
SUGGESTIONS TO MITIGATE IMPACTS
OF THE RECESSION. HE ALSO
PHONES THE HEAD OF FIRST GLOBAL
MRS. WEBBY.

SCENE3
FIRST GLOBAL HEAD IS FRANTIC
PENDING IMPROPER MANAGEMENT
OF THE OPERATIONS FUNCTION AND
POSSIBLE EFFECTS OF THE CHANGE
IN THE FINANCIAL ENVIRONMENT AS
A RESULT OF THE RECESSION.

Scene4

Auditors begin
investigations while
other smaller banks
crumble under the
effects of the recession.

SCENE4 CVM Daily update

Workers bank failed!.
Century National failed!
Eagle commercial failed!
Inconsistent
implementation of controls
at the O.M. level!

Scne5
2 weeks
later
Auditor informs Mrs.
Webby of the results of the
audit.
Proposes a training session
to include all major

SCENE6
On going training on
Operations Management,
the changing financial
environment and effects
on key O.M. decision areas.
Interactive session and

MORAL OF THE
STORY

OPERATIONS
MANAGEMENT IS
VERY IMPORTANT
TO A BANKS
SURVIVAL

Training #1 Process and

Capacity Design
For operations manager
process design matters
most as this is a major
driver behind increasing
bank productivity in an
ever changing
environment.

Training #1 Process and

Capacity Design Contd
A process strategy is a
banks approach towards,
transforming resources
into goods and services
thus meeting customer
requirements and product
specifications within cost

Importance?
Process and capacity design is a function of design of
goods and services, changes in the external
environment such as the financial environment and
the layout and location of facilities.

The process strategy

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Processes
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Clearing

Rate
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Rate
change
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change
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innovation

Teller
Teller
Operations
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Vault
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Transaction
Transaction
Processing
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What is the best process

strategy needed for bank
operations?

The operations
manager must then
determine the
appropriate process
strategy to mitigate
possible issues in
designing process and

Issues faced in the Design of

Process and Capacity

The cost of designing

processes and
determining capacity
given the dynamics of the
financial environment.
Designing processes to
satisfy unique customer
needs.

Issues faced in the Design of

Process and Capacity

Implementing process
design without
affecting the other
decision areas under
consideration given the
linkages between
decision areas

Issues faced in the Design of

Process and Capacity

Designing process and

capacity requirements to be
flexible, meet effective
scheduling techniques,
modular designs with rapid
throughputs and overall a
mass customized approach of
process and capacity design
needed to meet the

Solutions
Identify process design
analysis strategy namely
Service Blueprinting which is
a process analysis technique
that lends itself to a focus on
the customer and the
providers interaction with
the customer.
Determine type of process
strategy would be necessary

Solutions
Provide the Separation
option by structuring some
services to be highly
interactive and customer led
or self service with simplicity
to ensure customer
interaction is in the heart of
the process design.

Solutions
Ensure that process is
designed with an
integrated approach
considering layout and
Human Resources.

Solutions
Rethink current process
and identify options such
as Business Process
Redesign to include
implementation of more
technology into process
design example Enterprise
Resource Planning (ERPs).

Training#2 Short Term

Scheduling
With limited resources
becoming even more
difficult to arrive at, banks
need to find a way to
control cost whilst
increasing productivity.

The significance of accurate

scheduling
Accurate scheduling of laborhours is needed to assure
quick response to customer
demand; therefore, in this
environment there is no
room for the proverbial
sacred cow as supervisory
duties are extended to fill
the gap in times where the

Financial Environment
Challenges
areas affected might also
include unemployment, more
virtual services, scheduling
cross borders due to global
positioning strategies and
ensuring the organization of
self directed teams are
appropriately configured to
meet the variations in

O.M. Issues
Availability of staff or size of staff
Absenteeism
Legal considerations such as hours
worked, wages, union contracts
Design of service areas
Meeting the expected waiting and
service time desired by customers
Behavioral, social, seniority and
status issues provide personal
challenges for Operations
Managers responsible for bank

Scheduling Solutions
Computerized teller
scheduling software
Cross-training to ensure
there are secondary staff to
facilitate business continuity
Employ part time personnel
to provide variable capacity.
Create budgeted times and

Strategic Importance of Scheduling

Effective scheduling in a
bank environment means
more expediency in
satisfying customer needs,
faster movements of services
through the facility which
creates more economical use
of assets both human and
non-human.

Strategic Importance of Scheduling

Added capacity, faster

throughput and the relaxed
flexibility mean quality in
customer service design.
Good scheduling also
contributes to realistic
commitments and hence a
dependable of the banks
services from customers.

Other Considerations>>>
Determining a scheduling
approach whether backward
short term (beginning with due
date and scheduling final
operations first and other job
steps in reverse order) or forward
short term scheduling.
Determining scheduling criteria
(Maximizing completion time,
maximize utilization and
minimizing customer waiting

Layout Strategies
Layout Strategies are key
decisions that determine the
long-run efficiency of operations
in the financial environment such
as downsizing, mergers and
acquisitions and the various
types of product offering
innovated as a result of
changing in technology, a bank
may need to revisit or

Challenges for determining

layout
The global environment
dynamics can affect the layout
strategy of an operation which
holds numerous strategic
implications for operations
management

O.M. ISSUES CONSIDERED

To serve the customers
effectively, the bank operations
management has to meet
demand, cost and quality. Hence
the operations management
must take into considerations
ways to satisfy;

O.M. ISSUES CONSIDERED

Higher utilization of space,
equipment, people
Improved the flow of
communication, technology
Improved employee morale and a
safe working environment
Improved customer and client
interaction
Flexibility (Ability for the banks
layout to be modified to meet long

O.M. ISSUES CONSIDERED

Type of layout chosen and location
of workers requiring frequent
contacts to customers.
Determining capacity and space
requirements.
Designing layout to meet safety
requirements

LAYOUT SOLUTIONS
PROPOSED
Identify the type of layout, which
would feature a mix between
process oriented layouts and work
cell layouts.
Determine the types of material
handling requirements of the
overall operation to appropriately
plan for changes in capacity.
Determine capacity and space
requirement by researching and

LAYOUT SOLUTIONS
PROPOSED
Considerations must be placed for
aesthetics and the environments
which regards decisions about
customer breathing comfort,
determining the best location for
windows, color of work environment
and proximity between process
changes.
Determine servicescapes such as
ambience, spatial layout and
functionality, signs, symbols and

Human Resource
Strategy and the
Financial
Environment
Given the continuous changes in the

financial environment operations

managers need to ensure that the right
human resource strategies are
employed in order to gain competitive
advantage over competitors.
The objective of a human resource
strategy is to manage labor and design
jobs so people are effectively and
efficiently utilized
The changing financial environment

Human Resource
Strategy and the
Financial
Environment
The cost of attracting and retaining

talent and the ability for operations

managers to effectively design jobs
which provide incentives and benefits.
The key focus on a human resource
strategy is to ensure that people:
Are efficiently utilized within the constraints
of other operations management decisions.
Have a reasonable quality of work life in an
atmosphere of mutual commitment and
trust.

O.M. Issues on Human

Resource Strategies
The mix of products and services may be
the key determinant of seasonality and
stability of employment.
Technology, equipment and processes
may have implications for safety and job
content.
The location decision may have an
impact on the ambient environment in
which employees work.
Layout decisions such as work
cell/station vs. virtual offices may

O.M. Issues on Human

Resource Strategies
Acknowledging the issues
imposed on human resource
strategy operations
managers need to focus on
three distinct decision areas
of human resource strategy:
labor planning, job design
and labor standards.

SOLUTION#1-Labour
Planning
Labor planning is determining
staffing policies that deals with
employment stability, work
schedules and work rules.
In order to maintain
employment stability in the
banking sector as changes
occur in the financial
environment operations

SOLUTION#2-Job Classification
and Work Rules
Employing flexibility in work
schedules and staffing modules
implemented so as to improve
responsiveness and efficiency.
This can be done by reducing
job classifications and work
rule constraints and thus
promoting a flexible workforce.

Solution#3- Job Design

The bank could look to retain
and attract talent through;
Job Specialization
Job Expansion
Psychological Components
Self Directed Teams
Motivation and incentive systems.

Goods and service

design
Given the adjustment to
changes in the financial
environment, the design of
financial products and services
will be the front runner in any
transformation process for a
bank.

Goods and service

design
The design of goods and
services acts as the major
driver behind;
costs, quality and human
resource decision
which subsequently affects the
other decision areas specifically
process and capacity design,
scheduling, maintenance and

Issues of Goods and

service design
The changes in the financial
environment therefore
provide the following
challenges/issues to the
operations management
function as it relates to the
design of products and
services;

Issues of Goods and

service design
Robust design of products and
services- This speaks to the fact
that irrespective of changes in
the financial environment,

Issues of Goods and

service design
the innovation of products and
services the bank offers in the
form of loans, investments,
internet banking, mobile
banking and mortgage
packages must be designed in
such a way that small variations

Issues of Goods and

service design
as a result of globalization and
the expansion of markets,
introduction of new financial
instruments does not adversely
affect consumer demand

Issues of Goods and

service design
Maintaining a modular products
and service design which offers
a diverse rains of options for
consumers.

Issues of Goods and

service design
Maintaining a modular products
and service design which offers
a diverse rains of options for
consumers.

Issues of Goods and

service design
Maintaining and mastering the
art of time to market and time
based competition in product
and quality service
development due to the issue
surrounding the shortening
lives of products and services
(PC banking transformed to

Issues of Goods and

service design
Making the decision on whether
or not to outsource specific
services and/or internal
processes for efficiency
reasons.

Solutions
Ensuring the design of products
and services process is tailored
to meet and satisfy customer
needs.
Investing in research and
development so as to keep
pace with the dynamics of the
financial environment.

Solutions
Delaying customization of
service/product to as late in the
life cycle of the product as
possible.

Solutions
Divide services into small parts
and identify those that lend
themselves to automation or
reduced customer interaction
(implanting online bank and
reducing the need for ATM
machines reduces cost to
customers and increases

New Focus
Banks should aim at ensure there is a
overall strong approach towards
quality management which includes
implementing various quality
management programs aimed at
reducing customer complaints,
improving processes and overall
reduction of waste which will reduce
the cost of providing services to
consumers and also add value

Interactive Session

Questions and
Answers
Comments and
Concerns