Example Projects – Business Banking
This section describes a program of work that has matured into one of the most enduring Lean programs in banking. The program has been implemented across over 150 business banking centres. At the time of P2C’s appointment, the program consisted of a pilot of Lean methods in a number of business banking centres (BBCs), over an elapsed period of about 16 months. Our task was to convert this into a scalable approach able to be rolled across the BBCs in 8-week waves. The first wave included 5 BBCs, and at its peak the program was including 20 BBCs in each wave.
Key outcomes and milestones of the program include:
§ Focus on providing Lean skills competencies to a wide group of process champions
§ Champions are coached through their improvement work by qualified Lean coaches (in many cases
§ from P2C)
§ Leadership engagement and up-skilling run in parallel with the improvement program
§ Best practices identified, codified, and implemented broadly
§ Program methods and timeframe simplified and compressed for smaller banking centres
§ Second round of leadership development to apply the Lean skills to more significant business issues
§ The program had the freedom to run e2e DMAIC projects in parallel with local Lean problem-solving workshops, and continuous improvement / best practice sharing. This combination of levels of work was able to be achieved without excessive distraction or “change fatigue” due to the unifying influence of the process champions and the consistent coaching model.
Key business benefits delivered:
§ 5 hours per week per person saved across the banking centres, delivered within the 8-week wave, much of which has been converted into client-facing hours
§ 14% reduction in “non-value-add” inbound phone calls through better information provided to customers
§ Significant, immediate, and enduring uplift in staff engagement scores as measured by the HR survey
§ E2e lending times reduced from 18 days to sub-7 days for key lending types. Faster draw-down has delivered approximately $186,000 improved profit per banking centre; over $20m bank-wide
§ Staff training needs now operate on a visual management system, tracking “hours to competency” across each banking centre
§ Refer-backs from credit reduced by 64%
§ Centre-wide visual management of work in progress vs. settlement dates, including capacity sharing
§ Significant non-FTE savings relating to printing wastage, client file storage, and improved compliance
§ Lean 5S methods implemented in mail and voucher processing areas (see photo), resulting in reduced delivery errors and improved turnaround times.
§ The performance of the program was monitored using “thermometer” charts, (see example). The implemented initiatives from both local Lean workshops and shared best practices are entered into the chart. Benefits are calculated to local conditions and signed off by local management. In this example a banking centre of 24 people have (by Week 6 in the program) eliminated 120 hours per week of non-value-add activities, equal to 5.25 hours per week per person. This represents a13% uplift in capacity.
Example Projects – Working Capital Continuous Improvement
The Continuous Improvement program had as its key objective to “engage all staff in making day-to-day improvements in capacity, capability, service levels, simplicity, and customer focus”. Based around a group of trained CI Champions (selected from the business), the program operates through:
§ regular Lean improvement meetings conducted each fortnight,
§ solutions implemented locally,
§ solutions shared and best practices identified,
§ leadership engagement in approving solutions and signing off benefits (to ensure reality of benefit measure)
The Champions were asked to make a series of presentations at a day-long conference, inviting leadership to visit the displays and discuss the solutions implemented, the benefits, and the challenges of running such a program. This provided the Champions with excellent exposure to the leadership group, and a chance to share their own ideas about making the program a success. Typical solutions include:
§ Simplified reference material and training guides for sales staff
§ Improved access to contacts for specialist product information
§ Better communication between sales and support staff
§ Lean Visual Management concepts applied to track workflow, capacity, and deadlines
§ Lean 5S techniques applied to file storage, computer shared drives, interstate team data, data archiving, access across multiple servers
§ Creation of “click-through” portals to reference materials and standard forms specific to sales, support, post-sales team members
§ Error reduction techniques relating to customer data stored in more than one location
§ Information sessions for sales teams, reflecting common data collection error types
§ Reduction of non-value-add time in a range of transactions
§ Standardized transaction templates
This program was implemented across a department of 450 people in seven divisions. During the first eight months, 257 Lean workshops were completed and 154 solutions designed, tested, approved, implemented, and benefits signed off.
Over 610 hours per week are being saved at this stage in the program, an annual saving of over $1.2M worth of non-value-add time, much of which has been re-directed to client-facing activities. An additional $830,000 in benefits are in the process of being signed off.
These outstanding benefits have been achieved through the actions of 25 process champions (trained and coached by P2C) each spending between 1 and 2 days per month on the program.
Example Projects – Retail Bank Fraud Detection:
The context of this project was a major bank retail fraud detection unit of 75 staff, acting on fraud transaction alerts for a range of credit card, cheque, and lending products. Key objectives included:
§ Achieve a 15% headcount reduction
§ Merge two functional areas and achieve efficiency and cross-skilling advantages
§ Do not deteriorate the fraud write-off results in achieving the efficiency gains
§ Resolve inconsistent customer service
The project was completed on time and on budget, using predominately simple Lean tools supported by appropriate data analysis. Key outcomes included:
§ Over 30% efficiency gain achieved across the alert handling teams. Some teams achieved over 46% efficiency gains in reviewing and decisioning fraud alerts.
§ Headcount reduction achieved within the project timeframe, with union support and good staff engagement.
§ Resource model developed during the project to provide a sound basis for trade-offs between headcount numbers and fraud write-off outcomes
§ Simple visual management tools implemented (diagram on right) to allow the teams to manage their resources on a half-hourly or hourly basis.
§ 5S presentation of the key decision frameworks, based on intensive data analysis of behaviours vs. write-offs
One of the early team engagement techniques applied here was to create an Ideas Wall at each of the two team locations. Key project objectives, as-is process measures and workshop topics of the week were presented on the ideas walls. As can be seen in the photo on the left, many improvement ideas were generated by the team. These were assessed each day and weekly awards made for the best ideas under a number of categories. The team members stated that “this was the first time in years that the bank had taken any notice of or acted on their ideas”. As a project team, we made sure that the ideas were given proper assessment, and implemented as soon as practicable.
Use of appropriate data analysis techniques allowed the project team to form statistically sustainable conclusions on the links between process design, team member behaviours, and subsequent fraud write-offs. We developed a model linking overall business activity, detection ratios, intervention methods, false positive ratios, and speed of detection with lagged write off results. This provided much greater visibility of the effectiveness of alert rules, and supported trade-off decisions such as determining staff levels on particular shifts vs. write-off results. It was the data analysis model that predicted a reduction of over $2m in write offs, subsequently signed off by senior management and included in the overall operating budget of the department.
One of the key drivers towards the capacity uplift was to organise the behavioural approach used by the detection teams in forming a decision on each of the alerts.
We conducted statistical analysis of the links between various decision factors and the fraud write-off outcomes relating to those factors. By mapping the lagged write-off results against the touch time for each of the decision factors we were able to form a rational view of the “value” of each of the decision factors and the correct order of considering each factor.
In the “new” era of performance coaching and measurement, team members were most concerned that certain work types were more complex and took longer than others. Performance coaching needed to recognise the variable throughput that a team member might achieve if working on the complex decision types. To address this we used the Lean Touch Time measures to identify where the human effort was across the various decision types. The measures were then converted into “Decision Units”, so that each team member received performance coaching based on the real work effort required. The chart at right shows the time taken to form a decision for a number of loan application alert types, based on a sound sample size.
Performance uplift as a result of the project ranged from 30% to 48% in the alert detection teams. Overall team size reductions of 15% were achieved. Write-off reductions of over $2m were achieved. Other outcomes included:
§ Team size changes and staff transition to the re-deployment / redundancy pool were achieved within the timeframe of the project, rather than being left for line management to achieve later
§ Co-location of the two fraud functions was achieved within the project timeframe, including all telephony and systems requirements
§ Demand and capacity measures were made clear. If fraud activity changes over time, it will be easy for management to respond and justify any required team size changes. Further, the trade-offs between resourcing and later write offs are supported by clear and rational data.
§ Team performance recognition now takes into account the different times taken to complete tasks from different queues, leading to a more consistent monitoring and recognition of performance
§ Cross-skilling opportunities have been identified to enable further capacity to be applied selectively to alert queues
The project demonstrated a successful coordination of process improvement, project management, IT engagement, and HR support.
Example Projects – Major Bank, Group Security:
This project involved working with a team of 50 people in order to achieve efficiency gains, headcount reduction, without losing any of the business performance measures relating to write offs. Deadlines were tight, the project was run during the Christmas / New Year period, and maintaining great people engagement was essential. We decided to use the simplest of Lean methods in order to engage with the team from the start. Key project activities included:
§ Simple process mapping using sticky notes and project wall
§ Touch time measures taken across a sound sample of transactions and transaction types
§ Demand analysed by time of day, day, and skill-set requirement
§ Resource calculation model built and tested, showing headcount requirements
§ Productivity measures established, and “traffic light” reporting pack introduced
§ Quality measures introduced
§ Team Leader performance coaching behaviours defined and introduced
§ Lean Visual Management concepts introduced to track performance on an hourly basis
§ Workforce planning concepts introduced based on the demand forecast
§ Continuous improvement methods introduced, and team members trained. Management were engaged to monitor the conduct of continuous improvement activites
FTE calculator, based on sound Demand Analysis (image)
“Traffic light” reporting of team performance (image)
Lean Visual Management used as the basis of performance management. Simple chart, updated hourly, allowed the teams to become self-managing with regard to throughput and management of work in progress / backlogs (image)
The process improvement and adoption of Lean methods enabled an efficiency gain of 20%, headcount reduction from 50 to 42, improved service levels, and improved staff engagement.
This was achieved rapidly, in a work area that was unfamiliar with process improvement methods.
It is an example of how extremely simple Lean tools can be applied to great effect.
Example Projects – Share Trading Call Centre:
The goal of this project was to improve service delivery in this 70 seat call centre. The base line performance of at the commencement of this project and results of at the completion of the project are:
§ Grade of Service – The baseline was 45% (calls answered within 20seconds). The target was 80% which was consistently exceeded at the conclusion of the project. (78% improvement)
§ Abandoned calls – The baseline as 19% - this is extremely high and drives high levels of customer dissatisfaction. This was reduced to less that 3%. (85% reduction)
§ Average Handling Time (AHT) – 6.9 minutes per call on average. After eliminating waste from the process this was reduced to 4.5 minutes. (35% reduction).
§ Agent efficiency (number of calls completed) increased by 48% whilst still maintaining quality levels.
The project was completed on time and used Lean tools and methods to achieve the outcomes listed above.
Outline of some of the changes implemented:
1. Analysed call process and eliminated waste & non value added activities.
2. Changed the structure of the call to allow the agents to answer client questions if generic in nature without having to fully identify.
3. IVR message updated to remind clients to have identity information available.
4. 5S & Physical layout changes to enable agents to have documents/materials within easy reach as needed.
5. Visual Management Boards (VMB) showing team and individual performance introduced.
6. Team Leader Coaching model introduced which focussed on performance coaching.
7. Team roster changed and aligned to incoming call demand.
8. Model established to determine how many agents required each day (15min increments) to achieve GOS based on call volumes.
9. Agent “adherence to schedule” (time spend on phone taking calls) guidelines established and monitored.
“Absolutely Smashed It” now part of the Lean lexicon (image)