Financial Services Company Takes Bold Steps to Improve Productivity

by @reagan No Comments
Comprehensive process optimisation and capacity planning results in a £500K project saving, 25% increase in productivity and complete reduction of Service Level Agreement failures with customer impact.

At a Glance

A national high street bank, suffering from regulatory changes, wanted to boost productivity in their processing centre to reduce SLA failures. We supported using our proven Lean Management approach. Focusing on complete workflow redesign, organisation design and network delivery patterns, we reduced all SLA failures to zero, reduced overall FTE by 35% and delivered £500K in annual savings.

The Full Story

Like many high street banks, BankCo* was struggling to cope with the regulatory requirements to speed up the clearing process for cheques across their Scottish network. With a wide branch network, the central clearing processing centre was unable to collect, process and finally transport their customer’s cheques to the English clearing centre within the FSA clearing timescales. Any failure to clear all cheques within the correct timescales impacted customers funds and were tracked centrally highlighting all performance issues across the banking network. Even with high overtime, the was no sustainable solution.

Our initial diagnostic involved an analysis of the core processes, the resource patterns and the delivery schedules. We investigated which facet was impacting each key area and begin to work on both work standardisation and resource optimisation plans to align with an optimal delivery schedule. We also highlighted the high volume of overtime that was being used which was simply not sustainable based on employee burnout.

Case Study - Process Optimisation

£500K savings

Over £500,000 was saved through improved optimising delivery routes (£210,000), reduction in overtime (£95,000) and reduction of FTE (£195,000) due to improved process design.

+25% Productivity

Productivity increased from 58% to 83% based on process redesigns which optimised each team member. Using the Lean Management tools, the operation moved towards a cell-based operation with smaller batches of work processed faster, reducing lead time.

Zero SLA Failures

With detailed internal capacity planning, we designed an optimised delivery schedule that would ensure the right work arrived at the right time. A small processing buffer was included to catch any late deliveries resulting in 100% SLA success.

Our analysis revealed that there were periods of “downtime” early in the shifts where deliveries were slow to arrive resulting in overall poor productivity. However, towards the middle and later part of the shift, high volumes of deliveries were stretching the team’s capability too far. This was driving the usage of overtime to complete the work as possible but more often than not resulted in work being delayed to the following day before being processed.

What was also clear was that the work was done in very large batches with everyone doing the same tasks together as quickly as possible. With every high volume being treated as one single workstream (up to 40,000 items), any delays or system issues had a very high risk with a high number of customers impacted. If there were substantial system delays, all the items within a single workstream would be impacted causing very high SLA failures. This had a major impact on the “flow” causing backlogs and overall increased inventory slowing lead times.

Within 12 weeks, we had completed an analysis of the work profile, examined the delivery schedule and built a resource planning tool for the operations to identify the ideal resource levels based on the volume of work anticipated. We firstly optimised the overall processing approach. By creating cross skilled teams capable of end to end and running smaller batches of work within each team, we were able to optimise the processing volume per team for optimal productivity and output.

We optimised the delivery schedule with the supplier so that more work could be delivered earlier. As we were able to cope with higher volumes being delivered later (due to the cell production reducing the lead times) this allowed the supplier to consolidate later deliveries reducing overall costs.

Finally, with the improved throughput and aligned delivery patterns, we restructured the teams and balanced full time and part-time staff to cope with weekly and monthly variations in overall volumes. By linking the resources to work arrival times, we were able to reduce overall FTE (Full Time Equivalent) requirements by 35%.

*We take our client’s confidentiality serious. While we’ve changed their names, the results are real.