Quality Control

At Millington Savings Bank, quality control is a very important attribute to consider because it tests the customer satisfaction. Millington Savings continuously focuses on improving its quality and keeping its customers highly satisfied with the service it provides. All quality control must begin initially with the process itself; it can be an individual machine, a group of machines, or any of the administrative processes that exist within the organization. Millington Savings has its own internal customers, products, and services offered that are produced.

The first step in designing a quality control system for Millington Savings Bank would be to identify the processes where inspection and testing are needed. Inspection should be done per each teller, making sure every teller knows what they are doing and doing so properly. It is very important that each teller is trained and educated properly with the banking procedures and systems used at the institution. There should be no error reports occurring and if so it should be on a rare occasion. Testing of the transaction time is important as well. Depending on the transaction at hand, the customers should not have to wait more than five minutes for the transaction to be completed. Also wait time should be limited, customers should not have to wait to be helped; if there is proper staffing within the bank customers should be helped immediately. Technology as well plays a role; it should be up to par with the banking systems, which will provide a smooth transaction process for both the teller and customer. The second step is to decide on the type of measurement to be used at inspection point. The quality control method that Millington Savings currently uses is the attribute measurement of control. The attribute method measures the counts, such as the number of defects in a sample. In the attribute the product characteristic is evaluated with a discrete choice, whether is it good or bad, yes or no.  The third step is to decide on the amount of inspection to use. Millington Savings inspects or in other words audits all the teller cashboxes once a month, the main vault once a day, the ATM once a day, the coin counting machine once a day, and proves out the whole branch at the end of each day. The final step in designing a quality control system is deciding who should do the inspection. In Millington Savings Bank’s case there is internal and external auditing that occurs. The internal is when the manager and/or head teller audits each tellers cashbox once a month, audits the vault, coin machine, and ATM once a day. The external is the hired auditing company that shows up unexpectedly at each branch location once a year and audits out the entire branch to make sure everything is running smoothly and properly within the banking regulations.

Continuous improvement is used; it is administered through the fishbone diagram. Millington Savings believes in searching for the true causes of each and every problem, to develop the best solution possible. The fishbone diagram provides a cause and effect method, experimenting with brainstorming in a structured format. The brainstorming technique helps to identify the root cause of the problem in a structured and uncomplicated manner and to work and essentially fix each prior cause.

Millington Savings Bank uses the process improvement steps of Six Sigma (DMAIC), which is, define, measure, analyze, improve, and control. Six Sigma uses the project/team approach. A process is selected for improvement then a cross-functional team is formed, someone is chosen as the black belt to be the head of the team, in Millington Savings case the black belt would be the branch manager; and the team will use the DMAIC method to find the main causes and improve the process. The Six Sigma approach is very project focused and intensifies training to the staff, which will all in all eliminate defects. Each and every step is important for improving the flow of the institution.

Some new ideas for quality control that Millington Saving Bank may consider would be to continue to expand new technology efficiencies. Although Millington Savings does offer online banking as well as telephone banking, another modern feature would be mobile banking. This would be a faster and more convenient way for customers to bank, to have an application on a mobile device. Also, Millington Savings should offer temporary ATM or debit bankcards. Larger commercial banks offer a temporary card so when a customer opens an account they receive a temporary bankcard right away until the official one comes in the mail. Millington Savings does not offer this feature; customers would have to wait seven to ten days to receive the bankcard in the mail. With these two additional features, customer satisfaction would definitely increase positively for Millington Savings Bank. 

Service Process Design

The 3 Elements of the Service-Product Bundle:

-Tangible service, Millington Savings offers a wide range of accounts and also great customer service.

-Psychological benefits, this implicit service rest in the hands of the customers and their overall experience when they bank with Millington Savings. The customers' satisfaction is a main priority. Millington Savings creates an enjoyable atmosphere for their clients with the small home town friendly environment, which allows the customers to feel welcomed and safe.

-Physical goods, Millington Savings satisfies the customer needs by knowing they are getting good service at a reliable institution. Although customers do not walk away with a physical good, they leave the institution knowing that their money is in a secure and trusting organization.

Millington Savings Bank utilizes three elements of the service product bundle effectively in order to maintain their exceptional customer service. From the tellers to their personal bankers, Millington Savings provides explicit service to each and every customer through direct support, helpfulness and courtesy. Millington Savings accomplishes their exceptional service because they focus on maintaining the appearance of the institution by making sure it is organized and well kept. Bank tellers and representatives both also make sure every customer is attended to immediately to ensure great individual customer service.

Millington Savings Bank falls in the highly standardized service which is why they have a provider routed service. All Millington Savings Bank employees are properly trained to interact with customers in a professional manner, be courteous, knowledgeable and understanding. Customers have a limited number of process pathways that they could choose from and the service that is offered is standardized with a highly reputable business. Tellers at Millington Savings Bank are the first line of customer service once a customer enters the building. Tellers are equipped with highly technical and protected computer software so that every transaction is protected. Millington Savings also offers a host of ATMs so that customers are able to skip the line and directly deposit or withdraw money from their account without the direct communication with a teller, this is available 24-hours.

The Cell they operate in on the Service Matrix:

The cell that Millington Savings Bank operates in on the service matrix would be the provider-routed services. The services that the bank provides are characterized by only a few options that the customer has to choose from; all the customers that walk into the bank expect the same or similar service transaction to occur. Millington Savings Bank also provides an ATM, which would also be considered a provider-routed service. ATMs provide a limited amount of service that customers may choose from such as, making a deposit, withdrawal, transfer, and balance inquiry.

The customer wants and needs in the service package are standardized with highly repeatable process sequences to captivate what the customers are initially seeking. Customers also have low decision-making power in this service matrix. For instance in banks, rates and the database systems in which the bank operates on is already set and formatted to the institution. For example, a customer is unable to go into a banking institution and request a certain interest rate they would like to receive on a specified account.

The operations service system process is the limited number of process pathways. Depending on the account at a bank a customer may be limited to the amount of checks written out or even the amount of withdrawals made.

Some types of customer contact they encounter and how they respond to it.  Do they use self service?  Do they use technology?  Do they use focused operations? How do they support employees?

Millington Savings Bank is considered to be under the low customer contact matrix, which separates the customer from the service production system allowing a greater standardization of processes and providing better production efficiency. Under this matrix there is a strong focus on office innovation which includes paper handling, most of the work is considered to be clerical skills for both the tellers and the customer service representatives. Also there is low sales opportunity on the tellers end. The only form of high contact services would be that there is direct face-to-face customer contact; however the provider has complete control of the process being conducted.

Millington Savings gives the customers an opportunity of self-service by having 24-hour banking through the ATM. Our company uses technology as a customized database to register new customers and processing transactions of existing customers by also using other programs to verify identity. For focused operations, the bank has developed accuracy in handling high volume of paper work, flow control, and making sure that we provide excellent customer service. These operations support our employees becoming friendlier and delivering service value to the customer.

Service Recovery and Guarantees:

At Millington Savings Bank it is our duty to make sure each customer gets great service. The tellers and/or the customer service representatives start by greeting each customer and giving our undivided attention to each and every need, whether it is completing transactions or answering a few questions. If all tellers are busy at the moment and no one is available to take care of another customer, the tellers always make sure to acknowledge that customer and verify that someone will be with them shortly. If it just so happens that a customer is waiting a little longer than usual the teller will apologize for the wait and thank that customer for their patience.

As a bank there is no way of compensating a customer for bad service. If a customer is dissatisfied with the service received by the teller, the teller can only apologize and assure them that it will not happen again or send that customer to see someone with higher authority, such as a supervisor or a manager, if they continue to be dissatisfied. Depending on the situation, the supervisor or manager will take this matter into his or her own hands.

If a teller makes an error on a customer’s transaction, the teller must apologize and fix the transaction before the customer leaves the institution. The depth and the sincerity of the apology given is greatly important in the service recovery at Millington Savings Bank, all customers must receive great service and leave the institution completely satisfied.

Millington Savings Bank deals more with service recovery than guarantee, as a bank there is no true way to compensate for a service that is not guaranteed. However, there are rare exceptions that may occur. For instance, a customer wanted to go into her safety deposit box, the bank employee followed the procedures to allow the customer into her box. The employee has to use both the bank key and the customer key to open the lock, when the employee tried opening the lock; the customer’s key broke inside of the lock. The customer immediately got aggravated and became irate with the employee; there was nothing the employee can do besides call a locksmith that wouldn’t arrive for another forty minutes. When this occurred Millington Savings Bank deeply apologized for the inconvenience and offered her one-year free rent guaranteed of her safety deposit box.

Other than rare occurrences like the example, Millington Savings Bank does not offer service guarantees.

Process Selection

1.  What type of product flow do they use?

-The type of product flow that Millington Savings Bank uses is the assembly line. When conducting a transaction at the bank, it is the same process for every interaction. It is a system of steps to complete one transaction, thus making it an assembly line product flow.

2. What type of customer order do they process?

-The type of customer order that a company such as Millington Savings Bank would use, would be a MTS order, Make-to-Stock. The reason why they use this customer order is because it consists of forecasting, control of inventory, and customer specifications.
When in the banking industry, you need to be able to tell the future and what is going to happen. Next, banks have an inventory of money that is controlled to only a certain amount; a bank cannot hold all the money that its clients are worth. Finally, customer specifications are something all banks need to do to make their clients satisfied. If a customer has a specification to get locked in at a certain interest rate, then the bank needs to meet those certain specifications.

3. Which cell do they fall into in the process characteristics matrix?

-According to the Process Characteristic Matrix our company would fall under the continuous and assembly line column. Being that Millington Savings Bank is a local bank with an emphasis on high investments, low inventory, and a low variety of production the continuous and assembly line column accurately describes what our company offers our customers.

4. What are some of the factors influencing their process selection?

-Market conditions, capital requirements, availability and cost of labor, and technology are the factors that influence Millington Savings Bank’s process selection. Market conditions is a major factor and Millington Savings focuses on providing the best possible service to the customers and also providing higher rates on the variety of accounts offered, then their competition. Millington Savings competes with not only other small savings banks but also the larger commercial banks. Millington Savings puts in an effort and makes itself aware of the competition surrounding and how to make our bank more attractive to the customers’ eye. Millington Savings provides unique benefits to our customers’ which maintains their loyalty. The second factor is capital requirements, which deals with the financial aspect of the institution. This factor deals with operations and keeping Millington Savings Bank up to date and fully stocked with inventory needs. This aspect of the process selection keeps the bank functioning properly while keeping the customer fulfilled. The third factor would be the availability and cost of labor. This factor goes hand in hand with the human recourses department of Millington Savings, by providing employee selection, training of the new hires, and the compensation issues for all employees. Since, Millington Savings is considered an assembly line approach of product flow, the labor is relatively low skilled and inexpensive to the institution as a whole. The last factor that influences Millington Savings process selection is technology. Technology is important for both process and product of the institution. New changes in the database system always occur. It is the employees’ job to keep up to date with the new changes of technology that are constantly occurring. Millington Savings Bank relies on technology to keep functioning properly.

5.  Can they adopt any of the mass customization methods discussed?

-Yes, Millington Savings Bank can adopt the modular production method of mass customization. Each customer has an own individual account customized personally, however with new technology nowadays there is no real need to come into a bank and make a transaction. With the recent technology of phone and Internet banking, customers can conduct a transaction that way, rather than making a trip to the bank. Also another way to complete a transaction other than visiting a branch would be to use an ATM machine as well. These are all examples of the modular production method of mass customization.