Operations Management Analysis

Questions: 1. Describe the organisation. Keep the description brief but make sure that the reader can clearly understand what the organisation does and the organisational context. 2. Describe the process and include its process map. Again, keep this brief but ensure the reader understands what the process is, how it affects the organisations overall performance, and how it is currently designed. Lastly, provide a high-level process map if the process is large. 3. Evaluate the process current performance in terms of all five performance objectives. Given the organisations strategy and needs, identify and discuss the performance objective or objectives that need to be improved. 4. Analyse the process and provide recommendations on how it can be improved in terms of the identified operations performance objective (or objectives). If your recommendations include the reconfiguration of the process, make sure to include the new optimised process map.Important Assignment Instructions. Answers: In case the employee is unable to process the customers requests, in that case the employee is referred to another employee until the request has been resolved. The first process deals with attending the customer coming in the bank and finding of the appropriate officer to handle the queries. The process is followed by classification of the customer based on the purpose and the nature of product demanded by the customer. The customer is dealt with based on the profile of the customer. The next process deals with winning opportunities to meet a series of targets predefined by the customer requirements. The bank needs to verify the portfolio details in accordance with the various policies of the bank before attending the customer. The policy formalization of the process begins with approval of finance or a credit policy by bank personnel. The incident resolution is carried out by reporting to the relevant bank employee until the issue has been resolved. The telephonic procedure is asso ciated to a bank when a customer asks to enquire about a service via phone. The authorized person need to attend the call or the call is transferred to the designated personnel. The protocol approval process begins with the time when a different company partners with the bank. A protocol needs to fulfill in order to start the operation with the company. The various process of the ANZ bank have been selected on the frequency of the occurrence. All the processes listed have been represented graphically by using the modeling technique used before. The following figure represents the sub model which is related to the information request or risk advice. The process model shown below shows the activities of the client and the bank asses about the service ordered by the customer. In case the customer needs service (Box operation or process) then his/her requirement needs to be served by the designated banking personnel. In case the customer does not need process operation then the requirem ent need to serve according to the customer type. This model shows the treatment which ANZ bank does for general type of transaction and for a special type of service. Introduction The organization selected for the purpose of this study is Australia and New Zealand Banking Group. The company was founded in the year 1835 with its headquarter in Melbourne, Australia. ANZ bank with its market capitalization of $ 71.84 Billion and enterprise value of $ 79.71 Billion is the fourth largest bank in the country. The bank has total 1337 number of branches globally. ANZ along with its subsidiaries deals in various financial and banking services for small business, corporate and various institutional clientss based in Australia, New Zealand and Asia Pacific. The retail products of the company include housing loans for a single owner or for commercial purposes, personal loans to individuals, transaction banking, credit cards, merchant services and cash management accounts. The bank is also known for offering corporate banking products to large multinationals and private companies. The bank is also known for providing financial services to agri-business, small and medium si zed business owners, vehicle loans and equipment finance products. The bank also provides solution for working capital assessment and liquid assets, which includes documentary trade, financing of supply chain services, trade finance, wealth solutions and debt capital. It also provides several solutions related to superannuation, life insurance, mortgage services and CASA services. (Schumacher 2015). In terms of sustainability index the company ranks one, in the year 2008. The Asia Pacific groups of the bank have proved to be aggressive in expanding itself into the emerging markets such as China, Indonesia and Vietnam. In the year 2005 the bank formed a strategic merger with Sacombank with an acquisition percentage of 10%. Hence the company needs to deals with lot of processes in order to operate in the country. This report shows a detailed analysis of the various banking operations through process mapping and performance objectives. (In.finance.yahoo.com. 2016). Process mapping of Australia and New Zealand Banking Group According to Patakova et al. (2013), process is considered as the basic unit of importance. The operations manager is involved in specifying the configuration of the process and the requirements for the operating of the firm. A deeper understanding of the process becomes crucial for the company for an efficient management practice. This further implies the understanding of how the various processes are in line with the performance objectives of the company as the aforementioned criteria plays an important role in the mapping of processes that exists within a large company like ANZ bank. Once the relationship has been established the various processes can be mapped in order to know about the optimum performance and productivity of the bank (Brandon-Jones et al.2012). As the business process defines the system the formulation of Business process modeling is a critical task, because of the difficulties involved in collection of the information for the continuous improvement. The methodology of the designing of the process mapping of the ANZ bank involves the following steps: The first step is to identify the individual linked to ANZ bank. The individual linked are further identified in accordance with the organizational chart of the company. The second step of data collection process involves interviewing the people who are linked to organizational chart. The next step is the identification of the processes for the bank and the modeling team, and preparing an outline of the process map. Having identified and implementing the modeling process, it is important to identify the appropriate individuals in order to obtain the information related to each process. It is crucial for the management to identify the suitable modeling tool which will ensure accurate interpretation of the situation which relate3s to the study of Business process modeling. The next important step is to develop the business process models which have been developed in the chosen technique for the identification of the suitable model. The process modeling needs to be further validated and corrected during the BPM modeling. This step is important in order to generate a more robust model by utilizing the knowledge of the banking staff. These further correspond to the validations of the appropriate steps undertaken for the correctional decisions. The next step is to identify the relevant aspects which must be considered highlighting the business process mapping in relation to the busine4ss proce4ss diagram. This step is often defined as the final step for finding the relevant aspects which directly relates to the business process environment requirements and proposal framed for the model. The last step is to set out the proposal which may be established for the improvement process of the model. Thus process is mainly executed in the analytical level or at the stage of redesigning (Beuth et al. 2013). The key processes within the bank are associated with various activities carried out by the bank. The activity selected for the purpose of business modeling involves customer service (PCS), customer acceptance (PCA), treatment of customer (TOC), bank winning (CWA), bank acceptance (BCA), formalization of the policy (FOP), resolutions of incidence (ROI), telephonic feedback (TOF), preparation and analysis of protocol (PPA) and approval of protocol (AOP) (Ghattas et al. 2014). The process shown above clearly states recommendation of the proposal to the customer to approval of the disbursement of loan. The process map clearly states the various stages involved in the risk advice. The requesting of the information process also involves situational study giving both optimistic and pessimistic outcome of the exception being fulfilled and the outcomes of change to the new guarantees. If the exception of the customer is fulfilled then the request of the customer will be approved and the loan will be further forwarded for signing of the mortgage until the transaction has been finalized. In case it is not accepted then it needs to go through the process whether the change to new guarantees are accepted. The final process of the mapping deals with situational analysis (Windisch et al. 2013). An important component which may be considered along with above diagram refers to appraisal and simple note requesting. After the retrieval process the information is entered to the proposal system. In case the situation study is approved a mail may be sent to agency notifying about the transaction process. The present process mapping of two situations shows the efficiency of the management of the overall performance of the organization. It can be seen that the bank is able to take corrective steps for making sure that the service of the issues related to the customer is handled by the appropriate banking personnel. The risk advice model suggests the various steps that the bank takes on the basis of situational analysis (Thursky et al. 2014) Evaluation of present performance on the basis of five performance objectives According to Elgazzar et al.(2012), the five performance forms an integral part of the designing process. The analysis and process design will depend on evaluating the performance with individual relevant objective if the company and making an attempt to improve the present performance. The five performance objectives of Australia and New Zealand Banking Group have been shown below as follows: Performance Objective Present Situation Key Performance indicators Quality According to CEO Mike Smith the bank has shown a lot of potential in the credit cycle which has a direct impact on the profit and dividends of the company. The bank has been able to defend the quality by writing off $990 billion which the bank took as impairment charges. Market capital of the bank (71.96 B) Enterprise Value (79.71B) Profit margin (34.38%) Operating Cash flow (13.55 B) Total Debt (214.99 B) Speed The bank ensures a fast bank to bank payment through SWIFT MT 200 series. The counter payments are settled with Real time gross settlement (RTGS) in case a transaction has to be performed with some other bank. Time take for payment settlement Time taken for documentation and loan processing Time taken for loan disbursement Time taken for remittance of cheques Dependability Although the bank can be trusted for most of its deposit and advance activities in the recent time the bank has been dealing with several issues relating to dependability of the services. In the year 2014 the bank has faced allegations for funding a loan in sugar plantation of Cambodia that engaged child labour, land grabs by military and faced food shortages. In the year 2016 the bank has been alleged for manipulation of the benchmarking of inter-bank interest rates within the country. Charging accurate processing fees Granting credit in fair projects Cost The cost involved in applying for various services of the bank such as electronic credit, charge and debit card processing of ANZ bank has been observed to be high than its competitors such as National Australia Bank. The internet banking fees of the bank is also high in compared to the other banks. (ANZ Access Advantage - Unlimited transactions | ANZ 2016). Personal account fees and charge General banking charges Internet banking fees and charges Cost involved in issuing, replacement and repurchase of the cheques. Annual fees on credit cards. Flexibility The bank offers flexibility in various dimension of service. Some the flexibility aspects of the banking services includes ANZ access advantage to use the money via online service and overseas with Visa debit access. The acces to the money grants a lot of freedom with unlimited transactions at the ATMs of the bank, ANZ go money and electronic fund transfer. The bank offers the flexibility to move the regular payments through assisted switching service or by taking advantage of online switching service. Switching of bank accounts Electronic accessibility and overseas acceptability of the debit and credit cards. Flexibility to change savings scheme or term deposits options. (ANZ's staunch defence of credit quality Financial Review 2015) According to Chenouard et al. (2014), on the basis of five performance objective the bank needs to considerably reduce its cost of service in terms of reducing the processing fees for its loans. The internet access fees are also on the higher side in terms of its competitors. If the bank is able to reduce its service charges related to deposits and advances in compare to other bank then it will be able increase its customer base to a larger degree (Stockport et al. 2012) According tro Mehrsai (2016), In order to increase the speed of the service the bank can implement Littles Law and calculate its impact of the service on the throughput and cycle time. The Bank is responsible for processing 48 loan orders every day and the time of arrival of new proposal is 2 hours. Then the throughput time will be calculated as 48 x 120 = 96 hours. This shows that in order to complete the processing of the 48 loan proposal, the bank needs to 96 hours. (Potter et al. 2014). Conclusion The process mapping of the various activities shown through the diagram suggests that the bank has scope of improvement in the following fields Process Improvement Proposal Advantages Telephonic answering A separate call center division Efficient telephonic query redressal Customer acceptance Non current account form processing through electronic mailing Reduction in cycle time by 22% Company acceptance Documentation by the means of electronic mailing Reduction in cycle time by 22% Reference List ANZ Access Advantage - Unlimited transactions | ANZ (2016). ANZ's staunch defence of credit quality Financial Review. (2015). ANZ's staunch defence of credit quality. Brandon-Jones, A., Piercy, N. and Slack, N., 2012. Bringing teaching to life: Exploring innovative approaches to operations management education. International Journal of Operations Production Management, 32(12), pp.1369-1374. Chenouard, N., Smal, I., De Chaumont, F., Maka, M., Sbalzarini, I.F., Gong, Y., Cardinale, J., Carthel, C., Coraluppi, S., Winter, M. and Cohen, A.R., 2014. Objective comparison of particle tracking methods. Nature methods, 11(3), p.281. Davis, R., Tao, L., Scarlata, C., Tan, E.C.D., Ross, J., Lukas, J. and Sexton, D., 2015. Process Design and Economics for the Conversion of Lignocellulosic Biomass to Hydrocarbons: Dilute-Acid and Enzymatic. Elgazzar, S.H., Tipi, N.S., Hubbard, N.J. and Leach, D.Z., 2012. Linking supply chain processes performance to a companys financial strategic objectives. European Journal of Operational Research, 223(1), pp.276-289. Ghattas, J., Soffer, P. and Peleg, M., 2014. Improving business process decision making based on past experience. Decision Support Systems, 59, pp.93-107. In.finance.yahoo.com. (2016). ANZ.AX Profile | ANZ BANK FPO Stock - Yahoo! India Finance. [online] Available at: https://in.finance.yahoo.com/q/pr?s=ANZ.AX [Accessed 7 Jun. 2016]. Mehrsai, A., Karimi, H.R., Thoben, K.D. and Scholz-Reiter, B., 2016. Pilot Prototype of Autonomous Pallets and Employing Littles Law for Routing. In Dynamics in Logistics (pp. 101-114). Springer International Publishing. Patakova, P., Linhova, M., Rychtera, M., Paulova, L. and Melzoch, K., 2013. Novel and neglected issues of acetonebutanolethanol (ABE) fermentation by clostridia: Clostridium metabolic diversity, tools for process mapping and continuous fermentation systems. Biotechnology advances, 31(1), pp.58-67. Potter, A.T., Towill, D.R. and Gosling, J., 2014. On the empirical applications of Little's Law in Operations Management. Schumacher, C., 2015. Material Provisioning Concept for a Repair Business in Aviation. Stockport, G.J., Godley, M., Guagliado, D., Leung, O., Mercer, B., Varma, G. and Wong, S., 2012. ANZ Bank: Building a strategy for Asia. South Asian Journal of Business and Management Cases, 1(1), pp.31-41. Thursky, K., Haeusler, G., Teh, B., Comodo, D., Dean, N., Brown, C., Willis, J., Morris, K., Lingaratnam, S., Slavin, M. and Worth, L., 2014. Using process mapping to identify barriers to effective management of sepsis in a cancer hospital: lessons for successful implementation of a whole hospital pathway. Critical Care, 18(Suppl 2), p.P53. Windisch, J., Rser, D., Mola-Yudego, B., Sikanen, L. and Asikainen, A., 2013. Business process mapping and discrete-event simulation of two forest biomass supply chains. Biomass and Bioenergy, 56, pp.370-381.