QueFlow- The ultimate teller scheduling tool

Author: Raj Gaonkar

The ProductFlow Consulting when the author of this article was the president in 2003, had developed teller scheduling tool for retail banks for improving branch operational efficiency. QueFlow was the companys trade name for dynamic teller scheduling model with turnkey operational features. The traditional or manual teller scheduling functions can be made significantly more efficient with an automated dynamic teller scheduling model. The technology boom has made the branch environment more complex with the new banking products. At the same time the technology provides capable tools to solve intricate customer service problems arising from versatile product offers. Tracking profitability by customer has become an important issue for the banking industry. The customer segmentations are discretely defined and many banks have categorized their branches accordingly. Customer service levels vary categorically with the branch types such as: Upscale branch Most customers have $50,000+ in deposit Small business branch - Predominantly serves owners of small businesses Life-line branch- A community service branch, serving low income customers Drive in branch - Typically a suburban branch with drive in windows Supermarket branch Mini- branches established within super markets

The flow of customers into a given branch fluctuates constantly and the patterns of fluctuations change with demography and also topography. In order to effectively meet this fluctuating demand, a branch must employ tellers with varying time commitments. Most banks hire the following types of tellers: Full time tellers - Work minimum of 40 hours per week Part time tellers Work during busy days of the week and usually 20+ hours per week Peak hour tellers Work during peak customer demands Traveling tellers Tellers belonging to a teller pool that service a group of branches

To service widely diversified bank products, branches are equipped with various teller aids which result in varying product service times associated with higher standard deviations. The most commonly found teller aids in the branches have not changed in pace with the new product offers. The branch productivity has to increase with the new technology implementation to bear the additional costs and hence to improve profitability. In order to make the implementation of new teller technology cost effective, the teller needs to be utilized very efficiently. Many banks still schedule the tellers manually and some banks even follow ill-designed teller scheduling models which have proven wasteful of bank resources. In addition, these implementations have resulted in poor service quality leading to excess tellers at one interval and a shortage of tellers in the next. In order to resolve the fluctuating demand and limited teller supply, branches need a sound queuing theory model and flexible scheduling approach. Based upon queuing theory principles, a competent model should be able to provide customer service information and should offer suggestions that can instantly adjust to the unexpected demands. The model should enable branches to control customer waiting times and set limits on maximum waiting time. For example,

QueFlow was able set a constraint that enables 95% of the branch customers to be serviced within 3 minutes of waiting time. A teller scheduling model has to be an optimization tool for improving customer service by reducing waiting time while minimizing teller expenses. The ease of model installation in the branches and effectively facilitating branch personnel for scheduling are the important features of a good model. The usual output of a model is accurate schedules of tellers by time of day and day of week. An interactive database design is the most important attribute. For the branch personnel use the model yield: Forecasts of customer arrivals Teller requirement by half hour intervals Teller utilization ratio Shift schedules Lunch schedules Customer waiting times (Predetermined by management) Number of customers waiting in line

Daily and weekly work schedules are broken down into half hour increments. In case of teller sickness or absenteeism, a contingency schedule may be obtained with one key stroke. Schedules can also be changed to reflect special days, holidays and other exceptional occasions. The effective use of full and part time teller mix maximizes teller utilization the intended customer service quality. A What If feature can test scheduling alternatives. The senior administrators at the district and regional level use the teller scheduling of many braches combined. Typically they try to optimize cost and customer service. They try to interpret output to determine: Optimum solutions for the full time and part time blend, Teller pools to serve as back up for critical days Service levels and teller performance Service levels in the future.

QueFlow Teller Scheduling Cost Optimization

Total Cost per minute of waiting time

NUMBER OF TELLERS

Retail Banking Productivity Solutions

The exhibit above shows the opportunity cost of a branch pertaining to teller scheduling. In providing the customer service, choice needs to be made between the customer waiting cost and teller expense alternatives given limited resources. Waiting cost results from the unhappy customers leaving the bank due to unsatisfactory customer service. The best choice would be when the total cost (waiting cost + teller expense) incurred is minimum. The second best choice or any other alternative would incur the loss of potential gain. Opportunity cost assessment is fundamental to the design of teller scheduling model. However the ultimate objective is to minimize teller cost while improving customer service quality.