Analysis

Total Quality Management (TQM)

In our text, Operations Management by Krajewski, Malhotra, and Ritzman, we learn about the many functions and processes utilized in any service industry to ensure the highest quality of service. Total quality management is described as "a philosophy that stresses three principles for achieving high levels of process performance and quality: customer satisfaction, employee involvement, and continuous improvement in performance". With the TQM (total quality management) philosophy, managers are attempting to have the appropriate processes in place not only to manage cost, but improve service, prevent failure, and maintain an ethical environment not only for customers but for team members as well. Wells Fargo has been under the radar for some time regarding ethics, and after spending a lot of time in the branch and reviewing the changes being made and processes put into place it is clear to see that previously they may not have been utilizing a TQM process such as the one they have put into place now. Customer satisfaction, employee involvement, and continuous improvement are three factors that Wells Fargo are focusing on across the board. 

One of the main priorities of the Service Manager is to ensure top quality service is being offered to employee engagement (one of the important elements of TQM), is the use of service signals. These are signals sent through e-mail to the Service and/or Branch Manager which are color coded as red, yellow, and green. The color sent is determined by the experience the employee believes the customer has received. For example, if a teller assists a customer with a transaction and the customer is irate, complaining, or just seems distressed – that teller would send a red service signal to the Service Manager. The Service Manager would then contact the customer by the end of the business day to go over their experience in the branch, and figure out what he/she can do to make it better and improve his next and future visits. This is one way to help ensure customers are satisfied with the service they receive.

every customer at every interaction. One of the simplest systems Wells Fargo has put into play to help monitor the quality of service, and implement.

Being that customer satisfaction is another important element of TQM, Wells Fargo also conducts random surveys. Each branch has about 10 surveys per week conducted at complete random. A customer will receive a survey after a visit to the branch, whether it be conducting a transaction with the teller or opening a new account with a banker. There are specific questions asked regarding the customer's experience. The questions are rated 1-5 (5 exceeding expectations), and team members are expected to receive nothing less than a 5 in every category. They also are also asked about wait time, which should be no more than 3 minutes on the teller side and 15 minutes on the platform. This is an easy way for Wells Fargo to evaluate the service being produced in each branch, and correct the issue if not up to par. The customers are asked to rate their experience based off of the following 5 key drivers:

● Did the team member go out of their way to please you?

● Did the team member do things right the first time?

● Did you feel like the team member valued your business?

● Would you consider increasing business with Wells Fargo?

● Will you recommend Wells Fargo to family and friends?

The customers are then given the opportunity to speak about their experience and what can be changed or modified to make future experiences even better. Team members are expected to receive all 5’s, every time.

The final element in total quality management is continuous improvement. Wells Fargo strives to continuously improve not only daily but with every interaction they want their team members to do better. Service managers spend their days conducting Demonstrated Behavior Evaluations on all team members throughout the day. They are expected to do a minimum of one per employee, per day. This is somewhat like an unannounced observation. The Service Manager will observe the interaction the employee has with their customer, taking notes and looking for recommendations on how to improve the service for the next customer. The DBE also requires the Service Manager to point out the employee's strength, weakness, and area for improvement. team members are expected to introduce themselves to every customer, use the customer's name more than once throughout the interaction, reiterate to the customer what they will be doing for them, and confirm the transaction that everything was done to their expectations. The Service Manager observes all of these things and notes what was done well or what wasn't done correctly. This is a great way to ensure continuous improvement for team members. Wells Fargo also conducts quarterly required training for all team members. This ensures that everyone is up to date on changes, updates, and rules/regulations. Policies and procedures change often, so without these required training classes team members may be utilizing old processes which could result in not the best service for a customer.

One issue with conducting these surveys is the response the company gets back. The survey is sent via e-mail, where the customer is given an access code and then required to sign in and complete the survey which takes 5-7 minutes. In Seaside Park, other than during the summer months, the customer base consists of elderly customers - most of which do not utilize the internet or regularly check e-mail. According to city-data.com median resident age is close to 60 years old. The number of elderly is approximately 53% higher than median age in New Jersey.
The team members have built very strong relationships with their customers, constantly building rapport and deepening relationships. However, the customers who usually sign in to take the survey are customers who are unhappy with something and utilize this as an outlet to speak their mind or voice their complaints. Therefore, the survey scores are not always where they are expected to be.

Above is a visual chart demonstrating which factors contribute to the specific areas of the TQM Analysis.Above is a visual chart demonstrating which factors contribute to the specific areas of the TQM Analysis.
Another great tool that could be beneficial in Wells Fargo operations is a Pareto Chart. Pareto chart is described as a vertical bar graph in which numbers are plotted in decreasing orders of relative frequency from left to right. The Pareto chart is used for analysis what problems a company like Wells Fargo is facing and how that issue has affected the company. This chart identifies customer's issues with Wells Fargo prior to the scandal that Wells Fargo faced in 2016. According to Tyler Burden, “Bloomberg reports, management consultancy cg42 released a poll showing 14% of Wells Fargo customers have decided to leave the bank, potentially withdrawing billions of dollars and crimping revenue."

The data confirms what a separate poll by SurveyMonkey Intelligence released last week revealed. According to the survey, since the scandal broke, Wells Fargo has been losing as much as 140,000 of its mobile customers every week. The report finds that while the bank reported a downturn in new customer applications and accounts opened since the scandal broke, Wells Fargo curiously hasn't reported on its customer churn rates. That is the rate at which Wells Fargo is losing customers as they close their accounts after the scandal. Conversely, customer retention rates would reveal the rate of customers keeping their accounts. Either metric works.

Below is an example of a Pareto chart that shows how Wells Fargo bullied their employees by pressuring them to hit their sales and making sure that every customer that they came in contact with they encourage them to open an account in order for them to keep their jobs and make their incentives. This chart shows how Wells Fargo begins to decrease during September since that was when the scandal occurred which made the market close and drop dramatically towards the end of 2016. This turned out to be a serious issue for customers because they were not aware of accounts that were been open under their name and were getting charge for overdraft fees. This made several customers worried that their accounts were been falsely leading them to close their accounts and other businesses they had with Wells Fargo. 

Managing Inventory

While the bank offers products as well as services, the inventories look much different than other businesses who sell products. The product that Wells Fargo needs to keep on hand are not products that the customers go home with. They are products (supplies) that ensure the branch can continue to do business and service each and every customer. Wells Fargo offers a variety of products and services, most of which are intangible. However, there are still many items that the Service Manager must ensure are available in the branch at all times.

Referring back to our text, Inventory Management is defined as “the planning and controlling of inventories to meet the competitive priorities of the organization”. Inventory is one of the most important factors to keep a business afloat. Without the necessary inventory on hand needed to supply your customer with the product or service that they expect – you are risking the quality of service they will receive.

Wells Fargo has different levels of necessary inventories, and they are all ordered at different times cash. Cash to a bank is one of the most important products that they exchange. The branch orders cash every Monday, and it is delivered on Thursday. The amount of cash they order Monday to be received Thursday must be enough to carry the branch until the following Thursday. This type of inventory would be considered safety stock inventory. When ordering cash, the Service Manager is ensuring that she orders enough cash to cover a variation in demand.

from different locations. One of the most important inventories to keep on hand at all times is

It seems simple, but in reality, it can be stressful. When ordering cash, the Service Manager has to take many factors into account. Are there any events in the area this week or weekend that will cause business owners to need more cash or coin on hand? Are the ATM business owners coming in for large sums of cash this week? In Seaside Park, a majority of their business customers are owners of bars and restaurants on the boardwalk. During the summer, it is not unusual for each of them to come on Friday night and request $10,000 in singles and $2,000 in quarters. This is another factor the Service Manager needs to take into account. The Inventory Management model utilized for ordering cash would be the Periodic Review Model. The period is weekly, and the lot size (amount) would be based on demand expected.

Another area of the bank that utilizes cash and cash ordering is for the ATM cash supply. However, this the Service Manager has no control of. There is a department that orders the cash for the branch, based off of the demand at that exact time the previous year. This is a huge flaw in inventory management. For example, there may be an upcoming event planned in Seaside that team members are aware of, but the person ordering cash from a department in North Carolina have absolutely no clue about. They may only order $5o,000 for the ATM. It isn't known how much will be ordered until Thursday when the cash is received. By Saturday night the ATM could be completely empty and there is not a new shipment of cash coming in until the following Thursday. This is when the Service Manager would have to make the decision to utilize vault cash supply for the ATM, but this does a disservice to business customers that were depending on that cash. The department responsible for ordering ATM cash is utilizing the EOQ model, which is assuming that demand is constant and known. The huge issue is that demand is not constant and known when it comes to ATM cash. All cash ordering in the branch should be the responsibility of the Service Manager since that is the person who truly knows and can predict the best what will be needed.

In addition to cash, there are other inventories needed. The branch needs office supplies to work efficiently, and they utilize Staples to order the supplies needed. This can be paper, pens, paper clips, and even personal use items such as coffee and cups. This can also refer to New Account Kits, debit cards, receipt paper, disclosures, pamphlets, and account information. Any of the necessary items that will provide their customer with the best service possible, and keep the branch functioning. This type of inventory refers to cycle inventory – buying a specific number of a certain item and then re-ordering when that item is almost at 0. For these supplies, Wells Fargo is utilizing the visual system. The visual system works great for office supplies orders at Wells Fargo. There is a sheet log in the back office, where team members write down the office supply which needs to be ordered once it is low. As needed, the manager places an order directly from Staples website. Usually, a large quantity is ordered since the cost of office supplies is low.

Workforce Scheduling

At Wells Fargo, they seem to utilize forecasts for a lot of their processes. As mentioned earlier, ATM cash is sent based off of a forecast of the branch. This goes the same for the workforce scheduling. The term workforce scheduling refers to “scheduling that determines when team members work”

(Krajewski, Malhotra, and Ritzman). Wells Fargo utilizes a program called CloudCourd, which is a program which schedules team members. The process they follow would be a level strategy. A level strategy is a strategy where the workforce remains constant, but varies utilization with overtime, undertime, and vacation planning to match the demand forecast. They do not follow a chase strategy, which is when the workforce is adjusted by hiring and firing employees. However, if the schedule is varying too often or there is too much overtime being utilized, the company will send help from other outlets (other branches, etc.) for the time being until the demand returns to normal. There are a lot of different elements that go into scheduling team members. The branch requires a stagecoach at all times – someone who is behind the teller line assisting with overrides, and issues during transaction processing. There also must be either the Branch Manager, Service Manager or Lead Teller in the branch at all times. Preferably if the Branch Manager is not present, the Service Manager must be and if the Service Manager is not present, the Lead Teller must be – and vice versa. This ensures there is always a manager on duty as well as a team member from the management team behind the Teller line. There also needs to be at least one banker, but preferably two with specific times set out for the bankers to lobby lead. With that, the schedule must also ensure that dual control members are scheduled together at all times. The bank requires dual control for many of their processes and procedures. Dual control refers to two people becoming a “dual control team” and completing tasks together. This ensures the accuracy and security of specific tasks which have either sensitive information involved or cash exposure. Some examples of dual control are:

● Entering the cash vaults – One individual has key/combination

● Entering safe deposit vaults – One individual has 1st half/2nd half

● Entering/servicing ATM – One individual has a key/combination

Therefore, when the schedule is automatically generated by CloudCord, a member of the management team must still go in and tweak it to accommodate the needs of the branch to ensure everything is accessible at all times, and there is sufficient management on staff at all times. As mentioned previously, Wells Fargo utilizes forecasts in their scheduling program. There is an option for auto-schedule, where the system will schedule team members based off of the transaction number the branch had on this exact day last year. This issue with that is exactly the same issue as the ATM, each year is different. For example, Memorial Day weekend may fall on a different day in May each year, which would leave the branch either understaffed or overstaffed. The auto scheduler does have the ability to schedule key-persons with combination-persons to ensure dual-control is available, but it still needs to be reviewed.


One of Wells Fargo main values is leadership, not only employees are prepared to become leaders, but also customers. In the past few years, Wells Fargo has developed certain business strategies to develop environmentally sustainable programs to contribute to the environment. Wells Fargo has established goals for 2020 such as: “Purchase renewable energy to power 100% of our operations by 2017 with a transition to long-term agreements that fund new sources of green power by 2020.” Wells Fargo has been supporting businesses, communities, organizations, and universities facilities to focus on “environmental projects and innovative clean technologies.”   In 2016 Wells Fargo supported 300 projects nationwide; in addition, they awarded $221 million dollars to 40 different organizations because they were part of Wells Fargo Clean Technology and Innovation program, the organizations awarded worked on discovering alternatives solutions on “renewable energy, energy-efficiency, “greener” buildings, alternative transportation, sustainability, agriculture, and water. 

All policies and procedures implemented at Wells Fargo are in place to ensure the confidentiality of all customer information, while also minimizing bank loss and eliminating risk. Every process must be followed every time. There are so many different situations and scenarios that may arise on a daily basis, so Wells Fargo provides all team members access to a Branch Portal, which also has a policy and procedure database where virtually any policy or procedure can be searched and the steps to correctly handle the situation are listed. This revolves around sales as well as service, but for this analysis, we were focusing mainly on the service platform. This analysis was only on some of the most important procedures related to the everyday operation of Wells Fargo bank.