10,000
5
12,000
20,000 10,000
.000
10,000
13,000
10,000
12,000
Next, we change the shape of the parts to suit the system in the workshop until the requirements are met.
5,000
Load - distance analysis.
Operation chain analysis and block diagram analysis do not select the optimal layout, they only give us one good layout. In case there are many layout options to choose from, the above method is not effective, then people use load-distance analysis.
This is a very useful method in comparing several satisfactory layouts, to select an optimal layout based on the lowest movement of raw materials or products in a period.
Example 5.3: Suppose the production layout department is hesitating between the two best layout options below. Not knowing which option is better, they perform the method of calculating the load - distance of the two layout options based on knowing the average production quantity of each type of product in the period (month) and the transportation distance between the production departments as given below.
The layout department knows two good layout options:
Layout A | ||||
8 | 4 | 10 | 2 | 5 |
3 | 7 | 1 | 9 | 6 |
Maybe you are interested!
-
Management accounting for production costs and product prices at handicraft manufacturing enterprises in Nam Dinh province - 2 -
Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
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zt2a3gsnon-credit services, joint stock commercial bank
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At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services".
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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Monitoring Report Based on Approved Plan Item: Operation Management Area of Song Bung 4 Hydropower Plant -
Accounting for production costs and product pricing of P&G Advertising and Trading Company Limited - 1 -
Perfecting the Organization of Applying the Production Cost Accounting Method to Serve Cost Management Accounting

Layout B | ||||
7 | 1 | 9 | 6 | 3 |
4 | 10 | 2 | 5 | 8 |



Know the transportation distance between production departments.
Movement
between parts
About | way | (m) | Movement between parts | About | way | (m) | |
Layout A | Layout B | Layout A | Arrange | B | |||
1-5 | 30 | 30 | 3-9 | 30 | 20 | ||
1-7 | 10 | 10 | 4-5 | 30 | 30 | ||
1-9 | 10 | 10 | 4-7 | 10 | 10 | ||
1-10 | 10 | 10 | 4-10 | 10 | 10 | ||
2-5 | 10 | 10 | 5-6 | 10 | 10 | ||
2-6 | 20 | 20 | 6-9 | 10 | 10 | ||
2-10 | 10 | 10 | 7-8 | 20 | 50 | ||
3-6 | 40 | 10 | 8-10 | 20 | 30 | ||




Know the manufacturing method and average quantity of each type of product produced during the period.
Product
parts chain | Number of products manufactured | Product | parts chain | Number of products manufactured |
product
manufacture | in the month | product | manufacture | in the month | |
AB C | 1-5-4-10 2-6-3-9 2-10-1-9 | 1,000 2,000 3,000 | DE F | 1-7-8-10 2-5-6-9 1-7-4-10 | 1,000 2,000 4,000 |


Solution:
First, calculate the shipping distance for each product from the start of the


until product completion for each layout.
Product
parts chain manufacture | Distance/product rating (dm) | ||
Layout A | Layout B | ||
ABCDE F | 1-5-4-10 2-6-3-9 2-10-1-9 1-7-8-10 2-5-6-9 1-7-4-10 | 30+30+10=70 20+40+30=90 10+10+10=30 10+20+20=50 10+10+10=30 10+10+10=30 | 30+30+10=70 20+10+20=50 10+10+10=30 10+50+30=90 10+10+10=30 10+10+10=30 |





Next, we take the transportation distance and multiply it by the average monthly production volume to know the load distance of each product, then calculate the total load - distance of each layout. The layout with the smallest total load - distance is the better layout.
Product
Number of products manufactured in the month | Distance/sp (dm) | Distance/month (dm) | |||
Layout A | Layout B | Layout A | Layout B | ||
ABCDE F | 1,000 2,000 3,000 1,000 2,000 4,000 | 70 90 30 50 30 30 | 70 50 30 90 30 30 | 70,000 180,000 90,000 50,000 60,000 120,000 | 70,000 100,000 90,000 90,000 60,000 120,000 |
Total | 570,000 | 530,000 | |||



Through the calculation table, we see that layout B gives good results, with the total distance of product movement during the month through the machinery and equipment being the smallest.
In recent years, many computer programs have been developed to develop and analyze process-oriented layouts. Some programs use proximity ratios to maximize the total relationship for different parts to fit on the factory floor. Others are written to minimize the transportation cost over a period of time.
In general, these programs help us save time and effort in solving large and complex problems. However, the results are only initial layouts, sometimes we need to edit, check the logic as well as the equipment must be adjusted to fit by hand.
2.2.2 Product-oriented floor plan analysis:
Process analysis is the central objective of product-oriented layout. Factors such as product design and market demand for the product ultimately determine the technological process and production capacity. In addition, the number of workers, manual or automatic machines and other tools needed for production are also determined.
Production line balancing: Is to analyze the production line, dividing the work performed into each production area, each production area is responsible for a task.
similar tasks, grouping these homogeneous production areas into production centers. The goal of production line analysis is to determine how many production areas are required and what tasks are assigned to each area. Thus, the number of workers and machinery is minimized while still ensuring the required volume of products produced.
Now the production area has completed its assignment. Finish and start a new production area.
Tea
Level
Is this usage 100%?
Yes
Is all the work assigned?
Rain
Stop
No
End of assignment for old production area, start of new production area.
Continue adding work by assigning the next unassigned work in the priority chart to this production area, calculating the utilization for the production area.
In production line balancing, work is assigned to production areas so that there is as little idle time as possible. This means that work at each production area is as close to the cycle time as possible but does not exceed that time.
Starting from the left side of the priority diagram
Start a new production area by assigning the next job in the priority chart to the new production area, calculating the utilization for this production area.
Figure 5.3: Implementation process of incremental usage method
Steps to balance the chain:
Identify the tasks that must be performed to complete a particular product.
Determine the order of work to be performed.
Draw a work sequence diagram (circles represent work, arrows show the order of work).
Estimate work time.
Cycle time calculation ( T ck ).
T T sx Production time in period
ck d
The production process in the period
Calculate the minimum number of production areas.
S kv
T tg
T ck
Time to complete the demolition
Time of use
Efficiency of use (machinery, equipment or labor)
Effective
Output power (uS kvs xmin ) x 100 Output power (S kvs xthèûtăc )
Researchers often use linear methods or various mathematical models to solve the problem of balancing a production line. However, these are not useful when solving a large problem. Other methods based on simple principles are used to find very good but not optimal solutions. These are the incremental utility method and the longest operation time method.
Incremental usage method:
Figure 5.3 shows the sequence for performing work assignment using the incremental usage method represented by the general block diagram as on the previous page.
This method simply assigns additional tasks to production areas, in a prescribed order of work, until utilization reaches 100% or begins to decline. This process is repeated until all work is assigned to production areas.
Example 5.4: A pesticide production workshop determines the market demand to be 4,160 bottles of medicine/day. Knowing the time to prepare machinery, equipment, raw materials,






materials, production tools,... takes an average of 64 minutes/day. To complete a bottle of medicine, the factory needs to go through 15 production stages as shown on the following page.
Job
Work completed before | Job completion time (seconds) | |
ABCDEFGHIJKLMN O | A,B C,DE GF,H I,J LK,MN | 10 15 10 6 8 6 10 5 7 8 12 10 15 20 10 |
Add | 152 |








Requirements: Develop a process for processing and packaging plant protection drugs.
Calculate cycle time and minimum number of production areas
Balancing the production line using the incremental utilization method
Calculate the efficiency of using machinery and equipment.
Solution:
First, we base on the sequence of performing the tasks to complete the processing stages, we build the diagram as follows.
A
C
E
F
I
K
N
O
B
D
G
H
J
L
M
Cycle time (production rate): is the time interval between the previous product and the next product being completed.
T T sx 8x60 64 x60 6 pcs/bottle
ck d
4,160
Calculate the minimum number of production areas (minimum number of workers or machinery and equipment needed for production).
S kvsx
T tg .d
Production
T tg
T ck
152 25.3 kvsx
6
Balancing the production line using the incremental utilization method.
First, we assign tasks to each production center (production station), which must strictly follow the order of the tasks (C must come after A, after B; E must come after C, after D; ...). The tasks are combined in order until the utilization of the production center is 100%, or when we observe a decrease in it compared to the previous assignment. At this point, we open a new production center and start the sequence again.
Production station (1)
Work (2) | Minutes/machine (3) | Number of working KVSX (4)=[(3)/time cycle time] | Production area number necessary practice (5) | KVSX utilization rate (%) [(4)/(5)]x100 | |
1 | A | 10 | 1.67 | 2 | 83.3 |
1 | A,B | 10+15=25 | 4.16 | 5 | 83.3 |
1 | A,B,C | 10+15+10=35 | 5.83 | 6 | 97.2 |
1 | A,B,C,D | 10+15+10+6=41 | 6.83 | 7 | 97.6 |
1 | A,B,C,D,E | 10+15+10+6+8=49 | 8.17 | 9 | 90.7 |
2 | E | 8 | 1.33 | 2 | 66.7 |
2 | E,F | 8+6=14 | 2.33 | 3 | 77.8 |
2 | E,F,G | 8+6+10=24 | 4.00 | 4 | 100.0 |
3 | H | 5 | 0.83 | 1 | 83.3 |
3 | H,I | 5+7=12 | 2.00 | 2 | 100.0 |
4 | J | 8 | 1.33 | 2 | 66.7 |
4 | J,K | 8+12=20 | 3.33 | 4 | 83.3 |
4 | J,K,L | 8+12+10=30 | 5.00 | 5 | 100.0 |
5 | M | 15 | 2.50 | 3 | 83.3 |
5 | M,N | 15+20=35 | 5.83 | 6 | 97.2 |
5 | M,N,O | 15+20+10=45 | 7.50 | 8 | 93.8 |
26 |
Summary of work assignment to production area on the line as follows:
Production station
1 | 2 | 3 | 4 | 5 | ||
Work in the production station | A,B,C,D | E,F,G | H,I | J,K,L | M,N,O | |
Actual number of production areas | 7 | 4 | 2 | 5 | 8 | Total: 26 |
Thus, to complete the production volume of 4,160 bottles of medicine in 1 day, we need 5 work stations, depending on each station, the number of production areas (number of workers or machinery and equipment) is needed.
A
1
C
E
F
I
K
N
O
2
3
4
5
T B i c u d e r e d e r e s e d u c t i o n g machinery and equipment ( M s d ) J
L
M
M
S kv mim
25.3 x100 97.3%
S
26
sd
area
Longest working time method.
In this method, jobs are added to a production area in the following order. If there is a choice between two or more jobs, the job with the longest working time is selected and assigned first. This is effective for quickly assigning difficult jobs to production areas.
Example 5.5: Continuing with Example 5.4 , suppose the unit redefines the production demand of this workshop to be 832 bottles of medicine/day (instead of 4,160 bottles). Balance the production line in this case.
Solution:
First, we calculate the cycle time.
T T sx 8x60 64 x6030 pcs/bottle
ck d
832
Minimum number of production areas.
S kv
T tg
T ck
152 5.07 square meters
30
Assign work to production areas.
Area
manufacture
The works job | Working time new | Total time perform | Time left over Production area | |
(1) | (2) | (3) | (4) | [30''-(4)] |
1 | A | 10 | 10 | 20 |
1 | A,B | 15 | 25 | 5 |
2 | C | 10 | 10 | 20 |
2 | CD | 6 | 16 | 14 |
2 | C,D,E | 8 | 24 | 6 |
2 | C,D,E,F | 6 | 30 | 0 |
3 | G | 10 | 10 | 20 |
3 | G,H | 5 | 15 | 15 |
3 | TAKE NOTE | 7 | 22 | 8 |
3 | G,H,I,J | 8 | 30 | 0 |
4 | K | 12 | 12 | 18 |
4 | K,L | 10 | 22 | 8 |
5 | M | 15 | 15 | 15 |
6 | N | 20 | 20 | 10 |
6 | N,O | 10 | 30 | 0 |
Summarize the assignment of jobs to production areas on the production line.
Production area
1 | 2 | 3 | 4 | 5 | 6 | |
Work to be done | A,B | C,D,E,F | G,H,I,J | K,L | M | N,O |
Time left (seconds) | 5 | 0 | 0 | 8 | 15 | 0 |
Calculate the usage of machinery, equipment or labor.
M S kvmin x100 5.07 x100 84.5%
S
6
sd
kctt
6
A
1
C
E
F
I
K
N
O
2
3
B
D
G
H
J
4
L
M
5
The conditions for using the longest working time method are:
T ck
T cv(max) ,
That is, the cycle time must be greater than or equal to the maximum time required to perform the work in the product manufacturing workflow. According to the above problem, T ck = 30 seconds, the work that consumes the maximum time is work N which takes 20 seconds.
III. SERVICE LAYOUT:
3.1 Types of service floor layout:
Service premises layout depends on the nature of the service and the way businesses coordinate and transport their services: airlines, banks, retailers, hospitals, restaurants, insurance, transportation, entertainment, telecommunications.... In addition, service premises layout also depends on the specialized machinery for each type of service.
The difference between service businesses and manufacturing businesses is the encounter between customers and the services they provide. This encounter may be intense because the customer is actually part of the production process, as in a hospital, where the service is actually built on the customer. Or it may be less intense in a retail store, where customers select, pay for, and take away physical goods. But in either case, the service floor plan has a profound effect.
The general principle is to arrange so that customers can easily enter, exit and move between parts of the premises. In addition, it is also necessary to allocate appropriate areas for corridors, waiting rooms...
There are two poles in the arrangement of service premises. For example, in multi-banks, one pole is public services, where machines and equipment must be arranged around customers, making them most convenient (waiting room, parking lot, cashier window...). The other pole is internal services with service machines arranged mainly according to financial transaction work (updating accounts, making reports...).
Most layouts revolve around these two poles. For example , restaurants are designed to emphasize customer acceptance and personal convenience rather than food preparation and cooking.
3.2 Analysis of service floor layout:
In most types of services, people try to arrange so that the total distance of the customer's movement is as short as possible, in addition to arranging convenient service machines. In addition, it is necessary to pay attention to the arrangement of waiting rooms and queues so that they are comfortable.
For many services, the reasons why a department is located next to another department are complex. In this case, people often use proximity ratios to reflect the desire for a department to be next to another department. Then, using trial and error, chain of operations analysis or block diagram analysis, use proximity ratios to build a good floor plan.
Example 5.6: Suppose a store sells food products and plans to arrange 6 groups of products (A, B, C, D, E, F) according to the degree of close relationship between the groups of products as follows:
Intimacy ratio
Meaning | Intimacy ratio | Meaning |


![Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
zt2i3t4l5ee
zt2a3gsnon-credit services, joint stock commercial bank
zt2a3ge
zc2o3n4t5e6n7ts
At that time, the Branch had to set aside a provision for credit risks, which reduced the Branchs income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giangs profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project Restructuring the system of credit institutions in the period 2011-2015 approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services.
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giangs products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Ministers Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giangs treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giangs income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giangs corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giangs card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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