SECTION 1 – DATA ANALYSIS FOR PROCESS IMPROVEMENT (Critical thinking in
operations management) [35 Marks]
There is an Excel workbook of data available from the Assignment page on WebCT. This data
has been collected from direct observation of customer services in a banking chamber. There are
nine days of data – 3,598 data points (customers). For each customer, three pieces of information
The time a customer entered the First-in-First-out (FIFO) queue of the bank,
The time that customer left the queue to be served, and
The time a customer exited service.
It was also noted when a customer reneged – that is, joined the queue; waited for an amount of
time and then abandoned the queue. There is a difference between a customer who reneges and a
customer who enters the bank and decides NOT to join the queue, generally because the queue
‘looks too long’. This type of customer is said to have ‘baulked’ not reneged. Customers who
baulk are immediately lost to the service system.
The piece below gives you some background into the banking service operation from which the
data was drawn:
Profile of Bank Branch A
The branch in this study was selected for its size and a history of poor performance in terms of customer
satisfaction. The bank contracts an independent organization to perform random surveys of over-thecounter
(OTC) customer satisfaction. A strong correlation has been established between a satisfied
customer base and a survey score of over 75 (on a scale to 100). Scores in this vicinity also indicate high
performing branches in terms of sales and growth. Results for Branch A ranged from 49 to 53. A further
measure of the branch’s performance in this area was the number of customer complaints received by the
area manager. Around ten written complaints were dealt with each month and many more phone calls of
The branch’s reputation with customers was mirrored in its reputation with tellers, who had dubbed it the
“Branch from Hell”. Tellers did not want to be sent there, and the branch had a poor record of staff
retention. Turnovers were high and permanent positions remained vacant. There was a common feeling
of being ‘hard done by’ in being sent to this branch – ‘overworked, under-staffed, and having to pay for
parking!’ The unstable workforce meant that a team culture had not developed at Branch A.
Branch A was situated in the business / commercial centre of a major city. A prominent corner position,
adjacent to large areas of pay-parking and two blocks from the transport interchange, ensured
accessibility for both local business customers and visitors to the commercial sector. Residential clients
would find this branch less easy to access than suburban branches.
Situated on a prominent city corner, Branch A had customer access on both street-frontages and a large,
open chamber area with counter capacity for 13 tellers – 10 in view of the queue-line, and three at the
recently closed commercial telling counter.
Layout of Branch A The banking chamber provides the largest direct interface between a bank and its customers.
Branch A was situated on a corner and had entrances on both street frontages. Although the branch had physical
capacity for thirteen tellers, staff restrictions limited the nominal service capacity to six.
In line with the introduction of express business banking (the alternative to queueing for commercial
customers), a ‘One-minute Teller’ had been introduced, to dispense pre-ordered change for business
The operating queue system in the bank was a first-in first-out (FIFO) arrangement, with the queue
forming parallel to the larger serving counter. A rectangular structural pillar obscured the queueing
customers’ views of the smaller counter. The ‘back-office’ area, where bank work other than OTC telling
was carried out, is open-plan. Generally non-telling staff worked in full-view of the queued customers.
Teller levels varied across the week in response to the predicted load. Six tellers were employed on
Mondays, Thursdays and Fridays; four on Tuesdays; and three on Wednesdays. In addition to dedicated
tellers, the branch had a Service Advisor (SA) responsible for teller activities; and three Sales and Service
Advisors (SSA) responsible for all other branch activities. The most senior SSA managed the branch but
was given no distinguishing title within the organizational structure. At the customer interface there were
three substantive OTC tellers on each of the days observed (two on Wednesdays) – this means there
was a minimum service level throughout the day of three (or two on Wednesdays). There was capacity to
increase staffing levels up to a maximum of six tellers on Mondays, Thursdays and Fridays in response to
the queue length (up to four on Tuesdays and three on Wednesdays). The queue-length response was
an arbitrary decision-making tool. If a teller looked up from serving – generally at the end of a transaction
– and the queue was around 6 people or more, (s)he would call for another teller to be brought on. If the
queue grew past 12, an additional teller would be called and if the queue grew past the end of the queuing
area – about 15 – the staffing level would go to capacity. This approach relied heavily on a teller
observing the queue length and there being a staff member available to drop whatever (s)he was doing
and begin telling services.
Branch A served the commercial businesses of the area and their customers. Business banking was
disproportionately high in this branch, but a dedicated ‘Business Banking’ set-up ensured that these
customers did not directly contribute to the OTC service problems. Registered business customers were
able to drop off deposits and pre-order change so that processing did not require customers to wait and
very few business customers queued for service. Overseas transactions (money exchanges, bill
purchases – labour intensive transactions) were high at this branch, in line with it being the major city
Non-business customers to this branch comprised ‘white collar’ workers and casual customers (shopping
in the precinct). These two groups had differing expectations of the branch, with time being the defining
factor. Casual customers were less easily frustrated with the queuing process than the workers who were
attempting to transact their business during a work-break (morning or afternoon tea; lunch; flexi-time).
The service demands of this latter group were much higher, and in general they were more impatient.
Empirical data was collected to establish the service performance of the tellers in the banking chamber
and involved recording the:
Time at which the customer entered the bank queue,
Time at which the customer exited the queue; and
Time at which the customer’s business with the teller was complete.
A computer was used to log and hold the time of occurrence of the three events in a spreadsheet.
Sample of Empirical Data Collected
CustomerNo. 1 2 3
Enter Q 9:41:56 9:43:05 9:44:03
Exit Q 9:42:00 9:43:57 9:44:10
End Transaction 9:44:03 9:44:59 9:45:32
From the data provided, you should be able to determine a number of things about the OTC
operation, for example:
Interarrival times (and distributions) – i.e. the time between the arrival of one customer in
the queue and the next customer,
Queue times (and distributions) – i.e. the time a customer spends waiting for service (in
Service time or transaction time (and distributions),
Number of daily reneges,
Changes in distribution patterns throughout the day [The bank was open from 9:30am to
4:30pm Monday –Thursday and until 5:00pm on Fridays.],
The effect of staffing levels on queue times, and
YOUR TASKS FOR SECTION 4:
You are to use the information provided to analyse the performance of Branch A and
write a report outlining your findings. Also outline related information that you would
collect (and how this could be collected) to expand or enrich your understanding of the
performance of Branch A. [20 Marks]
Design a process improvement strategy for this Branch – what would you change and how
would you go about it, to improve the performance of this Branch? Present your design in
a 35-40 minute team presentation. This is a presentation only – there is no
documented submission required here. [Note: This need not be a radical re-design of
the entire operation. It may be simple steps that would impact the performance criterion
or criteria you have selected to improve.] [15 Marks]