Lean in Finance and Services: Success can be contagious!
In recent years Lean Thinking, once the mainstay of the manufacturing plant, has gained widespread acceptance and acclaim in the services sector.
In the face of budget pressures, Financial Service Providers, Internal Finance Functions, Business Process Outsourcing, Contact Centres and Other Customer Service providers are turning to Lean to improve their level of overall customer satisfaction while positively impacting the bottom line.
The value constraint of speed, cost and quality can be a difficult equation to balance and getting the right alignment between the overall objectives of the business and the investment in initiatives to help deliver these objectives can be challenging for all finance and business leaders.
The benefits of using Lean to drive competitiveness and growth are well documented, with most industry sectors reporting significant reductions in lead times, overall effort, cost and defects whilst at the same time, increasing overall financial performance, customer and employee satisfaction – so why is Lean not the normal way of working for all businesses operating within the finance or service delivery space?
Could it be that the traditional view of how value is created and service is delivered in these sectors does not involve a product that can be visually tracked from one step to the next in the overall services production system? Could it be that our perception of service delivery experts does not involve processes? There tends to be an array of reasons why some of us in the Financial or Service sector cannot relate to the delivery of a series of transactional tasks as a process and therefore a production system to maximise value for our customers – either internal or external.
Lean is the constant pursuit of identifying and eliminating waste within a given work process by identifying the value added and non-value added activities that make up that process. Lean enables a company to improve process speed and quality whilst reducing cost, creating the conditions for a more effective and efficient service which in turn helps deliver a transformed customer experience.
Waste should be eliminated in order to reduce lead time, reduce cost and improve quality of the process output for the customer. Typically wasteful activities can account for around 95% of total lead time in delivering a service to a customer. So if up to 95% of the activity associated with delivering a service is waste, how do we go about removing it to create additional value for the customer and realise the benefits for the business of doing so at the same time? This involves looking a little closer at how we categorise waste in our processes.
Lean thinking categorises and defines 8 wastes as follows:
- Transport – movement of people, products & information
- Inventory – unnecessary storing of files, documents or stock inventory
- Motion – needless physical exertion involved in completing a task
- Waiting – for instructions, information, approval
- Over-production – Making more than is required by the customer
- Over-processing – Tighter tolerances or including more steps than are necessary
- Defects – Rework, errors, incorrect documentation
- Skills – Under-utilising capabilities, delegating tasks with inadequate training
It is the continual focus on removing these wastes from our processes that delivers increased value for our customer and increased benefits for our businesses.
For more information, please click on the following link: https://leigroup.com.au/