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Northeast Ohio LSS Forum


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Northeast Ohio LSS Forum, here is the presentation from this past meeting at Key Bank.

Northeast Ohio LSS Forum, here is the presentation from this past meeting at Key Bank.

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  • Here is our primary product. These trees grow in a special “green” house at our HQ. Sorry no free samples.
  • This is an overview of Key bank – how long we’ve been in business and where we operate. Our physical presence (branches) arel ocated in the northern tier of the US from Washington to Maine. Our HQ is in downtown Cleveland.
  • Risk Operations, my dept., is made up of about 150 people. We focus on default management – trying to keep Key clients from defaulting on their loans (home, car, boat, student, etc). We also manage the assets that we have to get back from the clients through foreclosure or repossession.
  • This is Risk Operations Maturity Model. This gives a good idea of where we stand in our Process Excellence Journey. Green means we have reached that level, yellow means we are in progress and red means we have not started work on it. We have been working on this for about 4 years now and would consider ourselves working on the Stabilization section.
  • If a dept is not using LSS, I ask what methodology do you use to improve? LSS is not the only one. But is has the advantages listed: Proven, customer-focused, data-driven For ALL processes Valuable analysis tools & skills (when reinforced)
  • The first 3 items are the blocking and tackling of Continuous Improvement. You have to know what you are supposed to do to make it better. You must have Standard Operating Procedures (SOPs). We call them Operating Instructions (OIs). You also need to check adherence to the SOPs. We have a compliance dept. that audits our processes for process and regulatory compliance. Another basic is measuring how you are doing on Critical to Quality (CTQ) metrics. CTQ metrics are a reflection of what your customer wants. Once you have metrics you can then start improving them by identifying low performing processes and applying LSS principles to those processes. More advanced parts of Continuous Improvement are identifying strategically-important projects and utilizing Kaizen events (3 to 5 day quick hit analyses) where appropriate.
  • Our LSS projects focus on: Min. $25 K savings Projects that can be completed in 5 months or less. No projects that involve technology solutions (because of lack of availability of IT resources). Using tollgates (or regular checkpoints) to insure the project is on track.
  • Here is how many people we have involved as sponsors or belts. We have many more people who are involved on LSS project teams and everyone has gone through some level of LSS awareness training (4 hours).
  • This is our Green Belt Training Roadmap. It lists the steps within each phase across the top. Across the bottom are the tools we teach.
  • Metrics for some of our processes.
  • Project Example. We propose settlements with clients who cannot pay off their loan. We were paying excessive costs to have 3 rd parties to collect on defaulted loans and started an LSS project that developed a model to use to determine when to propose a settlement.
  • Project Example. Replevins are court orders to obtain an asset from a customer who has defaulted. We pay legal fees to obtain these judgements. In the past we were paying on average $450 K per year.
  • We’re in Wave 4 now. Wave 3, from last year, had these results. We shoot for $25 K savings per project. We do better than that.
  • Here’s what we have learned during our implementation. Mgmt support is critical. You need it at the top of the dept. to set the tone, and you need it from each of the project sponsors to drive the Green Belt projects to completion. You must limit the scope of the projects or they will take longer than 5 or 6 months. The tendency is to try to solve every problem in a process. I’d rather solve one smaller project quickly than let a project drag on forever to try to solve many problems. Chances are the longer project loses momentum and dies. You need to have some full-time resources to serve as mentors and coaches for the process. In LSS these people are called Black Belts. Learning LSS is a long involved process. You must expect results. One way to do this is to schedule regular tollgates to keep the Green Belt on track.
  • Transcript

    • 1. Northeast Ohio Lean Six Sigma Forum July 19, 2011
    • 2. Agenda
      • Introduction/Agenda
      • Opening Remarks - Todd Hammond, Director, Key Bank Risk Operations
      • Gemba Walk - Key Bank Risk Operations Dept.
      • Presentation of Voice of Customer Survey Results
      • Review of NEO LSS Charter
      • Next Steps/Next Meeting
    • 3. Lean Six Sigma Risk Operations Alan Luck, OpEx Manager
    • 4. Agenda
      • Key Bank
      • Risk Operations
      • Process Excellence Journey
      • Our Lean Six Sigma Approach
        • Structure
        • Training
      • Types of Processes
      • Example Projects
      • Results
      • Success Factors
    • 5. $$$$$
    • 6. Key Bank (by the numbers)
      • 1825 Commercial Bank (Albany, NY) -> Key Bank (1979)
      • 1994 Society (Cleveland) + Key (Albany)
      • $94 B in assets (Top 20)
      • 13 States
      • 1000+ Branches
      • 1500+ ATMs
    • 7. Risk Operations
      • 150 people
      • Default Management
        • Mortgages, Educational, Auto & Boat Loans
      • Support Processes
        • Workout (Loan Restructuring – Modifications)
        • Foreclosure
        • Repossession
        • Internal auditing
        • Employee Engagement
    • 8.  
    • 9. Why Lean Six Sigma?
      • How do you improve?
      • Proven, customer-focused, data-driven
      • For ALL processes
      • Valuable analysis tools & skills (when reinforced)
    • 10. Our LSS Approach
      • SOPs!!!!!!!
      • Metrics (where are we?)
      • Assure adherence to SOPs
      • Project/process selection
      • Projects vs. Kaizen events
        • Data/analysis vs. Lean/quick hit
    • 11. Project Focus
      • Green Belt projects
        • 5 months or less
        • (1st day of training to Control Tollgate)
      X $25 K
    • 12. LSS Structure 25+ All management + high performing associates Green Belts 2 LSS Process Manager Black Belts 6 Senior Managers Sponsors # Level LSS Role
    • 13. Green Belt Training
    • 14. Processes
      • Default Management Metrics
        • Outbound/Inbound Calling Avg Handle Time, Contact Rate
        • Call Documentation Documentation Accuracy
        • Workout Workout Packet Accuracy
      • Asset Management
        • Repossession Liquidation Rate
        • Foreclosure Foreclosure Cycle Time
        • Asset Remarketing Vendor Effectiveness
    • 15. Settlement Decision Making
      • Issue: Paying $300 K per month in commissions on defaulted loans
      • Metric: Net $ recovered after loan charges off
      • Goal: Improve net recovered $ by 10%
      • Data analysis:
        • Paying $1 M per year in commissions (within 60 days)
        • Poor settlement/payment criteria (learned through MSA)
      • Solution: Create settlement model
      • Results: Min. savings of $200 K/yr (more like $500 K)
    • 16. Replevin Process
      • Issue: Paying $450 K per year in replevin costs
      • Metric: Replevin Success Rate, Liquidation rate post replevin
      • Goal: Reduce Replevin costs by 10%
      • Data analysis:
        • Out of 300 Replevins filed, 13 granted, 8 assets recovered
        • Repossession in 116 cases
      • Solution: Eliminate replevin filing only in special cases
      • Results: Estimated at $150 K per year
    • 17. Overall Results
      • Wave 3
        • 13 Green Belts
        • $900 K savings ($70 K per project)
        • Ability to collect and interpret data = priceless
    • 18. Success Factors
      • Management Support
        • The Top
        • Sponsors
      • The Right Projects
        • Scope, scope, scope
      • Resources
        • Full-time Mentors/Coaches (Black Belts)
      • Tollgates
        • Expect results!
    • 19.