Problem areas

Once all the steps in the flowchart have been documented, it is possible to analyse it to reveal potential problems areas. Changes to a flowchart can be one of four types. These are:

Reduced divergence. This leads to uniformity which tends to reduce costs, improve productivity and provide a more effective distribution system. This process is usually aimed at reaching economies of scale. Increased divergence. Greater customisation and flexibility, which leads to price increases and indicates a niche positioning strategy. Reduced complexity. This indicates a specialisation strategy steps and functions are dropped from the system, so the resources can be focused on narrower services and complete satisfaction to the customer. Increased complexity. The strategy is used to gain a greater penetration in the market, eg banks have expanded their product ranges to maximise revenues.

The following problem areas that are identified and highlighted in Figure 2 are discussed below:

Entrance and exit

The first problem that was identified is the bank’s opening hours. Although this cannot be diagrammatically changed and expressed on the flowchart, the problem needs to be addressed and considered. Identification of the problem areas is undertaken with the intention of improving the service and customer perception of the service. Most banks are open 9—5 during the week and 9—1 on a Saturday. However, the customer may find it hard to access their bank during these hours, especially if they are working 9—5. Alternatively, the Internet could be used which would allow 24-hour banking. Nevertheless, customers who do not have access to the Internet or do not feel that it is secure would not benefit from such a service. So, the High Street banks should be looking towards extending their opening hours.

Obtaining the form

This has been identified as being problem area number two: when the customer goes to obtain a form, are there enough available, and are they identifiable? To solve the immediate problem of supply, a fresh supply should be put on the shelves daily. During the first week of university, when all first-year students are opening accounts, bank staff should check on the supply during the day.

Completing and submitting the form The customer needs somewhere to rest and sit so that they are able to complete the form. In most banks there are tables and chairs as well as counters for the customer to rest on, but probably not enough to cope with the demand in the first week of term. This could be rectified by adding a few more chairs, and also surfaces to write on.

This leads to the application form itself; specifically, the user-friendliness of the form. Lloyds TSB stated that they already have existing problems with the language barrier of the form as it is only written in English. The bank still has not rectified this problem. One method of solving this problem would be to have application forms in several languages. This would provide excellent customer service and increase the perception of service quality to the customer.

Illegibility of handwriting may also prove to be a problem; this is illustrated in the revised flowchart. Each form has to have precise and correct information in order to be processed into the database, which takes time as the form has to be screened and all the information then has to be processed into the database.

The revised flowchart addresses all the above problems to provide a customer- friendly service; this makes the customer feel better about the process that they have just completed.

Service counter staff availability: Is the customer prepared to queue? Once the form has been completed, the customer then needs to go back to the service counter, queuing if necessary, which has a negative effect. Furthermore, while queuing, there is nothing to occupy the customers’ minds, such as a customer notice-board.

One problem for the bank is that the customer has already spent a great deal of time filling in the application form. They will not want to waste any more time queuing. The system works on a first- come, first-served basis. This is unlikely to be changed in the short term, because it is an equitable way of inventorying customers. It is the processes that occur between queuing stages, such as returning to the service counter to submit the form, that need addressing. Thus, the customer is not wasting any more of their valuable time by returning to the queue. This problem is rectified in the revised flowchart (see Figure 3), by the clerk entering the customer’s details straight into the database, which would provide a more effective customer service.

Required identification After all the form filling has been completed, queuing has taken place and the customer is at the counter, unless they have two forms of identification with them the process stops once more, maybe for a few hours, days, or for good, as the customer may not return to that bank. The fact that two forms of identification are required should be mentioned at the beginning of the form so that time is not wasted by the customer or the bank staff.

The above processes and problems all take too much time. The revised flowchart does not completely prevent all the problems and it would be naive to think it

does, but it does address the problem of time wasting; the bank becomes more efficient and economies of scale are achieved. Bearing these factors in mind the current flowchart will be changed according to the reduced divergence factor, as the new process provides uniformity and economies of scale.

Representative APR 391%

Let's say you want to borrow $100 for two week. Lender can charge you $15 for borrowing $100 for two weeks. You will need to return $115 to the lender at the end of 2 weeks. The cost of the $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you decide to roll over the loan for another two weeks, lender can charge you another $15. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Implications of Non-payment: Some lenders in our network may automatically roll over your existing loan for another two weeks if you don't pay back the loan on time. Fees for renewing the loan range from lender to lender. Most of the time these fees equal the fees you paid to get the initial payday loan. We ask lenders in our network to follow legal and ethical collection practices set by industry associations and government agencies. Non-payment of a payday loan might negatively effect your credit history.

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