Lean in Financial Services

We’re excited that we’ve been able to recently help Financial Services customers implement lean thinking in their businesses. Our most recent activity has been to help stabilise operations, eliminate waste, reduce lead times and most importantly improve the customer experience in a major bank’s PPI operations. This section tells you more about the application of lean in this sector and a little about our approach.

There’s a great deal of activity applying lean principles to the Financial Services nowadays. Most financial organisations have at the very least started to apply lean in some areas of their operations. However, there is still an enormous amount of opportunity to go further especially in a sector that should be centred on what the customer values.

Our approach is to take a holistic view of the customer’s query or transaction journey, using the Value Stream Mapping tool. In our experience ‘silo’ thinking and disconnected processes often make the customer’s experience poor, and can result in the customer having to do much more work that they would wish to do, just to get their problem solved. A great driver for improvement in Financial Services is to design processes that make the customer’s experience as effortless as possible. If the focus of this exercise is based on this principle, then cost reduction and increased productivity will naturally follow. A high-level VSM activity enables Senior Managers in the organisation to really focus in on issues; such as where the process is disconnected, teams working in isolation, local metrics driving the wrong behaviours, batching work for local efficiency, and the associated costs of all the waste in the current system.

From the initial map, we help identify the areas of the organisation that require immediate improvement, and work through facilitated Kaizen workshops with the client’s own people, to improve processes and to eliminate waste. The key stages of this improvement phase are:

MAKE VALUE FLOW -> Its key to improving the customer’s experience to understand where the barriers to flow originate. Many of these barriers are self-inflicted in Banks and other Financial organisations, for example; the local ‘batching’ of work in the belief that this is more efficient, the disconnect between hours worked in different departments, the availability of skills and decision-makers as key points in the process. A reduction in lead time generally improves the customer experience, and also increases productivity across the entire process. The VSM exercise shows us where Flow is poor, and highlights the potential benefit of improving the flow of customer value in the organisation. One of the changes with highest impact is to break down silos and to create work cells’ around specific customer types that work collaboratively to move customer requests through their team quickly.

SYNCHRONISE YOUR PROCESS STEPS -> There’s little point making isolated improvements in your processes to just move the customer’s request from one queue to another. With our help we can help Financial organisations to understand their customer demand, and use this to generate the drum beat within your departments, so that all steps in the process can work to this beat (this is the ‘takt time’ in lean terms). It’s important to understand the current capacity of each step in the customer’s journey, and to be able to monitor closely the ‘bottleneck’ step in the process. All other steps need to be subservient to this bottleneck so that this asset (or team) is as fully utilised as possible. Furthermore, we can ensure work teams stay closely synchronised to each other by managing the flow in their departments through visual controls and balancing their capacity to demand through flexible working and multi-skilling.

LEVEL YOUR DEMAND -> Although it depends on the product or service offered, customer demand is often much more predictable and stable than our clients realise. What is often misunderstood is that batching of work in planning systems artificially creates these wild swings in demand, and that ‘true customer demand’ is often far more stable than people would imagine. Once we have established Synchronised Flow in your business we can help you to understand how by Levelling demand you can really start to drive out waste and save cost in your business. Again our Value Stream Map shows us where to apply this thinking, and we make extensive use of a tool called the ‘Glenday Sieve’ to help us and you understand the true picture of customer demand.  Sometimes though just employing a basic planning tool, such as a ‘Levelling Box’ or Kanban system can help smooth out the peaks and troughs of work and allow the focus to be on value-added work.

The final part of our lean model focusses on people development. By adopting a lean approach you quickly start to surface problems and barriers that have to be tackled. To do this you need people in your organisation to become ‘problem-solvers’, otherwise the waste that was hiding these issues creeps back in. We coach and train your people to see waste, and to give them the structured problem-solving methods that help them to solve their own problems and become your internal lean thinkers of the future!

Contact us today, using the details below, to arrange a visit to your site and learn more about how Lean FSL will be able to help you.