Issues faced by Erste Group Bank AG
Discuss about the Creative Research Earned Value Project Management.
Operation management is the planning as well as execution of operations (i.e. routine work) in the service and manufacturing sectors. It includes, demand forecasting, planning of production, inventory control, supply chain collaborations and quality management. On the other hand, project management means the planning the implementation of projects (i.e. non-routine work) in the service as well as business worlds. It includes the initiation, controlling, monitoring and termination of projects (Christopher, 2016). The report describes the operation and project management in Erste Group Bank AG (Erste Group Bank AG, 2018). The report is focused towards the identification of general issues and organizational attributes. Based upon these, various queries have been solved that are linked to supply chain management.
There are numerous issues which are faced by the Erste Group Bank AG in performing its operational activities as well as project activities. Some of the issues have been listed below:
- Globalisation issue: It is the most common or general issue which is arising in the banking sector. Due to increase in globalisation, banks need to provide more loans and investment options to its customers oversee (Christopher, 2016). If the success is not achieved then it becomes difficult for them to recover the amount.
- Economic imbalances: The economy of the Austria is declining and this has created issues for the bank because the inflation or deflation rate of the country impacts the profitability and success of the Erste Group Bank AG (Russell and Taylor, 2006).
- Consumer expectation: The expectations of consumers are increasing with the time and trend. Due to this, bank has undergone high pressure.
- Regulatory pressure: The requirement of regulatory keeps on increasing and bank is required to spend a large part of their discretionary budget on being compliant, on building systems and processes for keeping up with the escalating requirements (Kerzner and Kerzner, 2017).
- Increasing competition:Many new banks have been established and it provides new and innovative services to the customers. Thus, Erste Group Bank AG is facing the issue of innovation for exceeding the expectations of the customers.
The core service of the company is to take the deposits from the customers and provide service of withdrawing the money. Moreover, its service is also to provide loan to the customers on the basis of their savings and security. However, the company Erste Group Bank AG is not only focused towards these services but it also doing beyond this (Fleming and Koppelman, 2016). The bank also provides the services like insurance, investment facility, foreign market shares and many other similar services.
Thus it can be said that Erste Group Bank AG is providing the core service of banking up to certain limit and it is not availing it for the customers purely. If the bank does not provide other services to its customer then it will lag behind and could not compete with its competitors.
Operations and supply chain management helps in getting the work done very quick and that too in an efficient manner without any error and at lowest cost. This department of the company does the major work where in operations management, manufacturing or operational work is done and in supply chain management, the outcome is supplied to the customers. Thus, it is very necessary for these departments to integrate with other departments of the firm (Adner, 2017). In Erste Group Bank AG, the operation management is the one where customers are interacted and cash is taken for deposit. Moreover, the supply chain is followed during the withdrawal by the customers or while providing loan to them. Thus, these two departments are integrated with other departments like marketing and sales, finance, HR, etc.
Operation and Supply Chain Management in Erste Group Bank AG
The integration of operation department is with finance department and marketing department. This way they can convey the requirements with the customers and can solve their queries. Similarly, supply chain management is also connected with finance department so that fund could be provided to the customers as and when required.
The above describe issues are competition, regulatory pressure, economic imbalances, and globalisation. These issues impact the operation and supply chain management of banking because of its industry. The major characteristics of this industry are of dealing in money by depositing and providing withdrawals to its customer (Langabeer and Helton, 2015). Moreover, this industry plays an effective role in every nation because it is the reason for their economic growth and currency factor.
The industry of the Erste Group Bank AG is moving towards globalisation and for that company has to move along in order to stay updated in the market. Due to this, operations and supply chain management of the company gets impacted because they have to focus more on globalisation rather than on it is basic or core service. Similarly, due to industry trends, consumer’s expectation is increasing continuously and due to this, a firm is not able to concentrate on its operations management. Further, economic balance in the industry is highest and this has affected the supply chain management of the bank because consumers are demanding more and deposits are less. It has become difficult to manage the supply chain.
If the size of the bank is small then its operation will be very less and similarly the supply chain will not be long. In simpler terms, complexity in the bank will be less. Moreover, the bank will not be able to exceed the high customer’s satisfaction as well as globalisation will not have a major impact on it. On the other hand, big banks like Erste Group Bank AG, has to face many issues which have been described above in operations and supply chain management (Wuenderlich and et al, 2015). The regulatory pressure on these big banks is high because it manages the currency factor of the country. While performing operational activity, bank has to follow each and every regulation. Moreover, the rising expectations of consumers have put the pressure over supply chain management. The reason is that due to fluctuating economy, consumers are depositing less and withdrawing more and this has disturbed the supply chain of the bank.
Impact of Industry, Competition, Size, and Location on Operations and Supply Chain
Competitive environment exists in banking sector and this environment has impacted the supply chain and operations management of Erste Group Bank AG. Many new banks have been established, small or big in size and this has taken the competition on to another level. Furthermore, due to high competition, customers are moving to other banks and Erste Group Bank AG is losing its customer base (Heizer, 2016). Because of this competition, operation department has got extreme pressure to attract more and customers by providing exciting offers. Along with that, supply chain has been impacted because people are depositing more of money and are not demanding loans for their use. Because of this, input is less and output is more.
Company’s location plays an essential role in the logistic activities that are involved in supply chain management. In real-life, the optimization of location as well as allocation decisions is often preceded by an evaluation of the existing distribution network system. This evaluation often starts by analysing the quality of the current locations of the service facilities and the allocation of customer demands to that facility (Collins, 2017).
Thus, the network of location of Erste Group Bank AGhas impacted the above described issues in operations and supply chain management. The location of one of its branch in Slovakia was not appropriate and it created the issue of high competition. Due to this, the company was unable to get success in the market. Secondly, the location of Austrian branch is at prime and due to this, regulatory pressure is very high because it represents the country’s economy (Drucker, 2012).
The corporate strategy of Erste Group Bank AG is to achieve financial strength as well as growth which includes expanded market share and for generating income for its shareholders by continued profitability (Banks, 1998). Second is to root the banking culture in the European market with trust and partnership with our customers and an on-going focus on providing professional as well as quality services.
These strategies often get contradict with the general issues of high customer expectations and regulatory pressures. Due to this, bank is unable to fulfil its operational goals and this lead to the loss of customers as well as less employee satisfaction.
Conclusion
From this file, it can be concluded that there are various issues which the bank faces and due to these issues, its operations and supply chain management is often impacted. There are various parameters that impacts its operations and supply chain management and that are industry, competition, size, network location, etc.
References
Adner, R. (2017). Ecosystem as structure: An actionable construct for strategy. Journal of Management, 43(1), 39-58. https://journals.sagepub.com/doi/abs/10.1177/0149206316678451#
Banks, J. (Ed.). (1998). Handbook of simulation: principles, methodology, advances, applications, and practice. John Wiley & Sons. https://books.google.co.in/books?hl=en&lr=&id=dMZ1Zj3TBgAC&oi=fnd&pg=PR9&dq=operation+and+project+management+free+full+book+&ots=osGGhqZmaq&sig=hrMev52tGdikc66dAbGPonm560I#v=onepage&q=operation%20and%20project%20management%20free%20full%20book&f=false.
Christopher, M. (2016). Logistics & supply chain management. Pearson UK. https://books.google.co.in/books?hl=en&lr=&id=NIfQCwAAQBAJ&oi=fnd&pg=PT7&dq=Christopher,+M.+(2016).+Logistics+%26+supply+chain+management.+Pearson+UK&ots=x248DxElpA&sig=kRkV_F-7eJpl13cKK7RQmDJJLbk#v=onepage&q&f=false
Collins, H. (2017). Creative research: the theory and practice of research for the creative industries. Bloomsbury Publishing. https://books.google.co.in/books?hl=en&lr=&id=sJA3DwAAQBAJ&oi=fnd&pg=PP1&dq=operation+and+project+management+free+full+journal+paper&ots=FUr9Qorv3U&sig=XFfSGzHgoRCVAKzR-FYeK1bt5LA#v=onepage&q&f=false
Drucker, P. (2012). The practice of management. Routledge. file:///C:/Users/Admin/Desktop/9781136356223_googlepreview.pdf
Erste Group Bank AG. 2018. [Online]. https://www.erstegroup.com/en/home.
Fleming, Q. W., & Koppelman, J. M. (2016, December). Earned value project management. Project Management Institute. https://books.google.co.in/books?hl=en&lr=&id=yOSuDgAAQBAJ&oi=fnd&pg=PT6&dq=operation+and+project+management+free+journal+artical&ots=SE1Iae3Kak&sig=5OQhnjoG6K2SMLZQULV8Bomn5nQ#v=onepage&q&f=false
Heizer, J. (2016). Operations Management, 11/e. Pearson Education India. https://books.google.co.in/books?hl=en&lr=&id=ZcbODAAAQBAJ&oi=fnd&pg=PP2&dq=operation+and+project+management+free+full+journal+paper&ots=gyTBAbu75m&sig=jNcoYErfoF-I3sV6Y2vbaFJJLiA#v=onepage&q&f=false
Kerzner, H., & Kerzner, H. R. (2017). Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons. https://books.google.co.in/books?hl=en&lr=&id=xlASDgAAQBAJ&oi=fnd&pg=PR19&dq=operation+and+project+management+free+full+book+&ots=Xb2q_PW-CY&sig=zHW1z0svmF7eRWrXBWTdzG2qXFA#v=onepage&q&f=false
Langabeer, J. R., & Helton, J. (2015). Health care operations management. Jones & Bartlett Publishers. https://books.google.co.in/books?hl=en&lr=&id=L4WHCgAAQBAJ&oi=fnd&pg=PR1&dq=operation+and+project+management+free+journal+artical&ots=6MkxycfOO1&sig=AfX7GhieqSh__xeWsisyuDrDl5w#v=onepage&q&f=false
Russell, R. S., & Taylor, B. W. (2006). Operations management: Quality and competitiveness in a global environment. https://scholar.google.co.in/scholar?hl=en&as_sdt=0%2C5&q=operation+and+project+management+free+full+book+&btnG=#d=gs_cit&p=&u=%2Fscholar%3Fq%3Dinfo%3AOtt-08IEKA8J%3Ascholar.google.com%2F%26output%3Dcite%26scirp%3D0%26hl%3Den
Wuenderlich, N. V., Heinonen, K., Ostrom, A. L., Patricio, L., Sousa, R., Voss, C., & Lemmink, J. G. (2015). “Futurizing” smart service: implications for service researchers and managers. Journal of Services Marketing, 29(6/7), 442-447. https://www.emeraldinsight.com/doi/abs/10.1108/JSM-01-2015-0040
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
