Case Study Nipissing Bank SCM 310

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Nipissing Bank, one of Eastern Ontario’s premier financial institutions, was established in 1986 in Ottawa Ontario. Working with corporate, personal, and commercial customers they established about 25 retail branches mainly in Ontario and provide many financial services such as general banking, trust, insurance and wealth management. Though as time went on more competitors moved in and as is usually the case, Nipissing Bank has been pressured to gain more customers and retain their current clientele. By 2008, Nipissing was struggling to maintain their clients using their current marketing tools. Their manager of administrative services, McKenzie Scott, is making an attempt to improve these efforts and has a few options with which to…show more content…
This presents a problem because QZT’s service agreement only covers fixing the machine while QZT manufactures it. If the rumor is true, there is a possibility that if the Mailsorter breaks any time after 2012 there will potentially be no way to get parts replaced and serviced and a new system may have to be replaced anyway. This could prove quite a large problem and could result in spending the money for the new system anyway; it potentially just pushes the problem off for another 4 years. For option 2, Nipissing will install the QZT VIP Inserter. With this new machine, Nipissing can cut down half of the current time needed. The estimated new time for whole process is about 14 seconds and it only takes a week. The cost for this VIP Inserter is $435,000 plus annual maintenance fee of $25,000, but Nipissing might earn back $10,000 to $15,000 through salvage. Although this new machine is expensive, it can make the process faster and can be upgraded to handle 16 hoppers if necessary. However, it will take 30 days to install and run the tests. During downtime, all the processes needs to be done manually and will cost Nipissing extra in order to pay overtime to the mailroom workers already in employ. Manual processing will end up being 78.75 seconds. If Nipissing wants to do the option 2, they need to figure a way to solve this issue or the customer will receive their bank statement 20 days late.

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