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Quality Management in Bank Muscat “‘Quality is the degree of excellence, which a thing possesses”. Rowland-Jones & O’Brien (2005, p201) 1. 0 Introduction In this assignment I am concerned about maximising the level of quality in Bank Muscat and the way of keeping the promise of meeting the standard that are reached and gave to customers and the people with whom company is dealing. It is easy to reach a specific standard but it is difficult to keep to that level especially with the different competitions that are faced from different factors such as other commercial banks in Oman and the International Standard of Organization (ISO). . 1 An overview of BankMuscat(Sample Organisation) BankMuscat assets are worth over USD 8. 5 billion, BankMuscat (SAOG) is the largest bank in Oman today with a strong presence in Corporate Banking, Consumer Banking, Investment Banking, Treasury, Private Banking, Project Finance and Asset Management. The Bank has a network of over 101 branches and 239 ATMs in Oman and a representative office in Dubai (UAE).
BankMuscat also has a strategic stake in Centurion Bank of Punjab, one of the largest private sector bank in India, and has a 49% stake in BankMuscat International (BMI), an independent banking entity in Bahrain that is focused on becoming a truly GCC regional bank. The Bank has also recently opened its operations in the Kingdom of Saudi Arabia. BankMuscat holds the rare distinction of being voted the ‘Best Bank in Oman’ five times in a row by The Banker, FT London, six times in a row by Euromoney and seven times by Global Finance Inc.
The Bank was awarded the People Development Award at Oman Awards for Excellence, in 2003, 2004 and 2005. The Bank also won the prestigious Gulf Excellence Award 2005 for Oman. BusinessToday named BankMuscat as the Number One Bank in the Sultanate of Oman for 2006, for the fourth time. In 2004, the Bank achieved the rare distinction of becoming the first bank in the Middle East to be completely ISO 9000:2000 certified. (www. bankmuscat. com ) 1. 2 Five Approaches to Quality Professor Davis Garvin has categorized the quality definitions into five approaches to quality.
The basic principles of the individual models of Quality Management System are briefly provided below: a)The transcendent approach views quality as synonymous with innate excellence. The quality is being defined as the absolute. E. g. Rolls Royce; Rolex; Formula 1 b)The manufacturing-based approach quality is about providing products or services that are free of errors, and conform to design specifications. E. g. an EasyJet flight to Malaga c)The user-based approach assumes quality is about providing products or services that are fit for their purpose. It matches what the customer wants, E. . Quiet carriage on trains d)The product-based approach views quality as a precise and measurable set of characteristics that is required to satisfy the customer, E. g. the watch can run for five years without servicing and keeping time correct to within 5 seconds. e)The value-based approach defines quality in terms of value. They may conform to lower design specifications but as long as they are cheaper this is okay. E. g. The Pound Shop Out of the above approaches BankMuscat follows the transcendent approach views quality as synonymous with innate excellence.
This is evident from the prizes won by BankMuscat over a period of working life (Appendices 1). BankMuscat Quality Policy is to achieve and sustain a reputation for quality in the national and international markets by offering products and services that exceed the requirements of our customers. BankMuscat strive to remain the bank of first choice in all product and services. ( http://www. bankmuscat. com/about_bk_mission_statement. shtml) it clearly indicate the compa Quality is consistent conformance to customers’ expectations”. (Slack et al (2004, p595) The quality is need the conformance and consistent to win customers expectation.
Conformance to specification means producing a goods or service to its design specification. Quality planning and control can be divided into six steps as follows: 1. Defining the quality characteristics of the product or service 2. Decide how to measure each quality standard 3. Set quality standards for each quality characteristic. 4. Control quality against those standard. 5. Find and correct causes of poor quality 6. Continue to make improvements As per assignment requirement first step is discussed in detail as follows: 2. 0 Defining the quality characteristics of the product or service
Functionality – it includes how well the product or service does the job for which it was intended. It include performance and features (e. g. HD TV – Quality of picture) Appearance – aesthetic appeal, look, feel, sound and Smell of the product or service Reliability – consistency of product or service’s performance over time (e. g. does the bus run on time) Durability – the total useful life of the product or service (e. g. how long before the bus breaks down) Recovery – the ease with which problems with the product or service can be rectified or resolved. Contact – the nature of the person-to-person contacts that take place. t could include the qualitative features of staff such as courtesy, empathy, sensitivity and knowledge of contact staff. 3. 1 Total Quality Management TQM is a term coined in the USA for a quality management system, which emphasises the ideas of the quality gurus. The term was first used by Feigenbaum, but represents the observations of US management consultants who were keen to discover the quality systems used in Japan during the 1970s and 1980s. In fact the different approaches these consultants observed were the development of many ideas, some of which were first introduced in America during the Second World War.
With the war effort, many young operations managers were encouraged and able to experiment with methods for improving quality and productivity. The quality gurus and their ideas on quality Philip CrosbyQuality is free – the optimum is zero Defects W. Edward Deming Deming’s 14 points. How to use statistics. Armand FeigenbaumTotal quality control Kaoru IshikawaQuality circles and cause and effects diagrams Joseph JuranQuality as fitness for use, rather than conformance to specification Genichi taguchi Loss function. Minimise variation Shigeo ShingoPoka – Yoke system and zero quality control
Yoshio KondoCreativity vs. standardisation, continuous improvement Source: Rowland-Jones & O’Brien (2005, p217 W E Deming concluded that to develop better quality to satisfy customers’ needs (or, more correctly, to improve quality standards), a constant rotation should be made between the activities of the company with the object of quality improvement paramount. This process became known as the Deming wheel or Deming cycle. The process begins with a study of the present situation, during which data are collected to be used in formulating the details (the PLAN) of the improvement.
When the plan is finalised, the improvement is implemented (the DO). After implementation, a follow up is made to confirm that expected improved results have been achieved (the CHECK). Steps are then taken to ensure that the adoption of the change is sustained (the ACTION). Deming believed that top management has overriding responsibility for quality. He was a strong advocate of the use of statistical techniques and the need for everyone in the organization to be familiar with them. 3. 2 Quality and BankMuscat
Top management of BankMuscat is committed to the development and implementation of Quality Management System and continually improve its effectiveness by establishing quality policy, objectives and review of quality management system at planned intervals. Top-level management shall provide evidence of its commitment to the development and implementation of the quality management system and continually improve the effectiveness by: a)Communicating to personnel of the organization, the importance of meeting customers as well as statutory and regulatory requirements b)Establishing quality policy )Ensuring that quality objectives are established d)Conducting management reviews, and e)Ensuring availability of resources 3. 3 Quality Policy in BankMuscat In BankMuscat, Quality Policy is to achieve and sustain a reputation for quality in the national and international markets by offering products and services that exceed the requirements of the customers. BankMuscat strive to remain the bank of first choice in all banking products and services. Towards this policy, BankMuscat objectives are: ·Establishing and maintaining a quality system based in the most recent ISO 9002. Continually reviewing our products and services, feedback from employees (Appendix-1) and our customers to ensure that there is continual improvement ·Offering our clients excellent service, innovative products and value-added banking while developing with them a mutually beneficial association. ·Demonstrating vision, professionalism transparency and integrity in the conduct of our business and service ·Achieving disciplined growth and reasonable profitability while operating on a sound financial base ·Creating value for our shareholders Encouraging, motivating and developing our human resources our most valuable asset and the cornerstone of the Bank ·Working towards the successful implementation of government objectives applicable to us ·Striving towards and maintaining prominent position in the banking community in Oman The Quality Management documentation of BankMuscat includes documented statements of a quality policy and quality objectives, quality system manual and is presented in a four level format as described below: Level 1 ; Level 2 ; Level 3 ; (Work instructions Job descriptions) Level 4 ; 3. 4 Quality Operations Management Schroeder said, “Operations managers are responsible for producing the supply of services in organizations. Operations managers make decisions regarding the operations function and the transformation system used. Operations management is the study of decision making in the operations function. ” Operations management history was dated back even to the age of Plato, 400 BC who defined it, as “a man whose work is confined to such a limited task must necessarily excel at it”.
Quality Operation Management in BankMuscat is more effective, efficient and competitive. The following points need consideration:- 1. Services and manufacture are interrelated 2. Customer-directed operations 3. Continuous improvement 4. Integration of operation 5. International operation 3. 5 Quality Customer Contact in Bank Muscat Schmenner (1986) developed a conceptual framework categorizing service delivery by the degree of interaction between customers and staff. Customer involvement is of twofold: 1. They can participate – the type of service determines the degree. . They can specify the service – this depends on the degree of customisation required in the service. In BankMuscat we need to categorize the services because they help to examine ways to change and improve it and help in the allocation of staff and other resources. It also helps in highlighting the managerial problems relating to different types of service. 4. Suggestions In order to maintain the quality standard, BankMuscat issues a checklist to ensure that every customer receives quality service (see Appendix-I). But it is not strictly followed and filled.
Therefore, it may be made as mandated and an automatic computerized form may appear every time after attending every customer. This will help the management to receive the feedback of the service quality at every instance of service. A constant update on the services provided by other banks also necessary. There should be constant monitoring of quality improvement in other competitors in country to improve BankMuscat quality standards. Therefore a constant survey over other banks activity and implementation will enhance the quality at BankMuscat. For this even a separate section/ department may be established. . Recommendation to improve Quality in Bank Muscat BankMuscat shall establish, document, implement, maintain and manage the Quality Management System and continually improve its effectiveness in accordance with the requirements ISO 9001:2000. BankMuscat should establish and maintain a documented quality management system that is design to provide products and services that meet the requirements of internal as well as external customers. It shall do it through: a)Identifying the processes needed for the Quality Management System and their application through out the organization. )Determine the sequence and interaction of these processes c)Determine criteria and methods to ensure that both the operation and control of these processes are effective. d)Ensure that the availability of resources and information necessary to support the operation and monitoring if these processes are effective. e)Monitor, measure and analyze these processes, and f)Implement actions necessary to achieve planned results and continual improvement of these processes 6. References Rowland-Jones & O’Brien (2005, p217), Slack et al (2004, p71 www. bankmuscat. com 2001 BankMuscat Quality System Manual – BankMuscat Checklist Quality System (ISO Certification), 2002 – http://www. improve. org/tqm. html-TQM And Organizational Change And Development By Thomas Packard, D. S. W. – http://www. well. com/user/vamead/demingdist. html -http://gunston. gmu. edu/708/deming. htm Kindly fill in this form. Your feedback will help us serve you better. How do you feel about ExcellentGood Satisfactory Poor Operating Hours ATM Uptime Accessibility to Bank’s senior staff Parking Resolving of Complaints Staff Adequacy Staff Response time
Telephone Response Staff Care/Friendliness Staff awareness of Bank’s Products Communication of terms, conditions, charges etc. What should the Bank provide which you asa customer think is missing? In your interaction with the Bank, did anyoneor anything let you down? If yes, please give details. What did you appreciate the most while interacting with BankMuscat? Any further comments Your Name Your Phone No. Your Email appendices 3 Vision Statement “Over one million satisfied customers by 2010 through continuous enhancement of stakeholder value” Quality Policy
Our Quality Policy is to achieve and sustain a reputation for quality in the national and international markets by offering products and services that exceed the requirements of our customers. We strive to remain the bank of first choice in all our product and services. Towards this policy, our objectives are: Establishing and maintaining a quality management system in the Bank, based on international quality standards. Continually reviewing our products and services, feedback from employees (internal customers) and our customers to ensure that there is continual improvement.
Offering our clients excellent service, innovative products and value-added banking while developing with them a mutually beneficial association. Demonstrating vision, professionalism transparency and integrity in the conduct of our business and service. Achieving disciplined growth and reasonable profitability while operating on a sound financial base. Creating value for our shareholders. Encouraging, motivating and developing our human resources our most valuable asset and the cornerstone of the Bank. Working towards the successful implementation of government objectives applicable to us.
Striving towards and maintaining a pre-eminent position in the banking community in the Sultanate of Oman The awards won by BankMuscat The Bank’s performance, as a whole and across many of its business lines, were once again recognized and lauded by financial community during the year. Notable amongst the awards and recognitions gained during 2006 were: • Euromoney: Best Bank in Oman (for the 5th time) • Global Finance: Best Bank, Oman (6th year running); Best Forex Bank and Provider, Oman (3rd year running);
Best Trade Finance Bank and Provider, Oman (3rd year running); Best Internet Consumer Bank, Oman (3rd year running) • Lloyds List Middle East: Trade Finance Award (2nd year running) • The Banker FT London: Deals of the Year, Oman • Datamatix: Banking & Finance CEO of the Year • Middle East Institute: Banking and Finance Personality of the Year, 3rd Middle East CEO Awards • JP Morgan Chase: MT103 Quality Recognition Award (6th time) • Muscat Securities Market: Best Brokerage Firm (in terms of volume) and 2nd Best Services offered by a Brokerage House Oman Awards for Excellence: People Development Award (3rd year running) • BS7799 certification: for Best Practices in Information Security inthe IT security function first organization in the Sultanate and the fourth bank from across the region to receive this certification. • Maiden entry into Global League Tables (mandates won) for Financial Advisors: published by The Infrastructure Journal magazine. Ranked 11th in the Global Financial Advisors list (overall 3rd in the Africa and Middle East region) in terms of mandates won.
Additionally, the Bank has been ranked 2nd globally in the Power Sector. The Bank’s ranking has been based on winning four transactions amounting to USD 1. 7 billon in the power, petrochemicals and waste sector. Appendix:1 QUALITY SERVICE DAILY CHECK LIST Branch Date: Sl. No. AREAConf 1. ACCOUNTS 1. 1All new accounts have been opened, and reports have been checked; especially name, address & ID. No. 1. 2Customers have been advised of their new account numbers. 1. 3Signatures for all new accounts and amendments have been scanned 1. Cheque book requests have been processed in the system before 12: 00 Noon 1. 5Customers have been contacted to collect their cheque books applied earlier 1. 6Amendments in customer account file have been made and confirmations sent to customer. 2. ELECTRON/CREDIT CARDS 2. 1New Electron Cards applications have processed in the system before 12:00 Noon. 2. 2New Credit Card applications have been processed and faxed to Cards Services Dept. 2. 3Credit/Electron Cards replacement/amendment/cancellation requests have been faxed/send to Cards Services Dept. 2. Customers have been contacted to collect their Electron/Credit Cards applied before 2. 5Follow up with Cards Services on applications sent earlier 2. 6Captured Cards have been collected from the machines 2. 7ATM claims have been processed/forwarded to Central Services 2. 8Lost/Stolen cards have been reported to Cards Services Dept 2. 9Special payment instructions on credit cards have been complied with 3. LOANS/CREDIT 3. 1All loan applications received during the day have been processed/faxed to Retail Credit /RM. 3. 2All approved loans during the day either by BM r RM or RB have been input in the system 3. 3Customers have been advised by telephone of the status of their loan applications, i. e. whether approved or additional information is required. 3. 4Follow up with other branches on information on proposed guarantor, if any. 3. 5Follow up with BM, RM, RB on applications send last working day/earlier 3. 6Post letters of facility offer to customer/guarantor. 3. 7Credit requests received during the day have been reviewed/processed. 3. 8Customers have been contacted for information required on their credit requests. Sl. No. AREAConf 3. Customer have been advised of the expiry of their facility and the information required for renewal if need be. 4. CLEARING/COLLECTIONS 4. 1All clearing and transfer cheques received during the day have been processed. 4. 2All collection cheques have been processed 4. 3Follow up with Central Services on collections sent earlier 4. 4Customers have been contacted to collect their returned cheques or post the cheques in a registered mail to customers 5. REMITTANCES 5. 1All telegraphic transfers have been faxed to Central Operations by 12:00 noon and fax conformation is obtained. 5. Follow up with Central Operations for TT confirmations for remittances made last working day. 5. 3Customers have been contacted on TT with no enough information. 5. 4Draft drawing confirmations have been faxed 5. 5Customers have been contacted on inward remittance. 5. 6All local telexes have been emailed/ faxed to Central Operations Dept and confirmations obtained 6. STANDING ORDERS 6. 4New Standing Orders and amendments have been input and acknowledged 6. 6All standing orders have been executed, e. g. CBO payments (local banks) Pay Orders, Drafts, TT’s, have been prepared and sent 6. Follow up with Central Services on standing order telexes processed last working day to ensure that they have been affected. 6. 8Standing Orders due in the next two days have been prepared 7. FIXED DEPOSITS 7. 1Customer has been contacted to advise the fate of their fixed deposit. 7. 2All new, renewal and liquidation of fixed deposits have been input in the system and advices sent to customers 8. OTHERS 8. 1Stop payment instructions have been input and acknowledged 8. 2All dumped and rejected entries have been reviewed and reversed 8. All efforts have been made to trace customers who made transactions with incomplete information, e. g. account number in the deposit slip, beneficiary’s details in remittances, signature in the forms/registers, cash excess/shortage 8. 4All customer complaints during the day have been discussed with all the staff involved. Sl. No. AREAConf 8. 5The branch has enough cash in the premises and machines for the next day, and order has been placed if required. 8. 6All forms for customer use are available 8. 7All pending customer applications have been reported to the Branch Manager 8. 8New Circular/memo has been addressed to all staff