Guidon And RBFCU Lean For Credit Unions Webinar

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Leveraging Lean Thinking in Credit Unions: Three Ways to Improve Member Service While Reducing Costs. …

Leveraging Lean Thinking in Credit Unions: Three Ways to Improve Member Service While Reducing Costs.

In today's competitive environment, member service is a top priority for credit unions. At the same time, there is an increased pressure to do more with less and reduce costs. The adoption of Lean principles and tools provides an opportunity for credit unions to engage employees and simultaneously improve member service and reduce costs.

Learn the basics of Lean and how it can be applied to credit unions. Hear from Randolph-Brooks Federal Credit Union about how they are leveraging Lean methods to make significant improvements in:

* Branch Channel Lending
* Call Center Member Service
* Branch Resource Management

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  • 1. Leveraging Lean Thinking In Credit Unions Deliver Great Member Service While Keeping Expenses Down September 30, 2009
  • 2. Agenda • Introduction • What is Lean • Why Lean in Credit Unions • 3 Case Studies – Branch Channel Lending – Call Center Member Service – Branch Workforce Management • Getting Started • Questions © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. © 2008 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group 2
  • 3. With You Today Larry Mead, Vice President, Guidon Performance Solutions, LLC • Over 15 years of experience in application of Lean and Six Sigma • Co-founder of Guidon Performance Solutions – the pioneer in applying LeanSigma® in non-industrial and non-traditional companies • Client experience in financial services, insurance, healthcare, media, and information technology • Masters of Engineering Randy Smith, President/CEO, Randolph-Brooks Federal Credit Union • President and CEO of RBFCU since 1987 having prior served 5 years as VP Finance • Elected in 2008 to the CUNA Mutual Board of Directors and the NAFCU Board of Directors • 27 year career in the United States Air Force (active and reserves) • Masters of Business Administration • Certified Public Accountant © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 3
  • 4. With You Today Jimmy O. Junkin, Senior Vice-President of Finance and Administration, Randolph-Brooks Federal Credit Union • Joined RBFCU in 1993 as Senior Vice President of Finance and Administration which also includes the Process Improvement function • Previously a partner at Ernst & Young whose clients included RBFCU and many other financial institutions • Certified Public Accountant • Masters in Public Accountancy Peter Farrow, Vice-President Process Improvement and Project Management, Randolph-Brooks Federal Credit Union • Joined RBFCU in 2004 to establish a new Project Management function • Selected in 2007 to establish a formal Process Improvement function • 17 years of Credit Union experience • Master in Technology and Masters of Business Administration © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 4
  • 5. What is Lean? • Provides What the member wants • Where the member wants it • When the member wants it • In the Manner they want it While utilizing minimum resources and minimizing member effort. Specifies Value from the standpoint of the member. © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 5
  • 6. Why Lean in Credit Unions? Membership is growing Confidence and safety … Members expect superior service Growing spectrum of products … complexity and scale Regulatory environment is more complex Sound processes, controls, costs … Return on Assets for many Credit Unions is stretched thin Low interest rates, more members, more services … The pace of change requires new thinking © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 6
  • 7. What does the member value? Wasted Time & Activity Core Process Value Backlog of Excessive Motion Defective Process requests (Walking to Next Task, etc.) (Identifying, Handling, Fixing) OPERATIONAL LEAD TIME Missing Waiting Review/QA Mail final Information for next Process Documents to internal representative The key is to reduce processes and effort to “core value.” Lean is simply about creating more value for members by eliminating waste… simultaneously improving service, cost, and quality. © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 7
  • 8. Getting to Core Value Traditional Car Rental Process Wait in line From Take bus From gate to at rental At counter counter to terminal rental counter counter to bus Confirm reservation Locate car Review & sign paperwork Credit card From Take Drive Drive imprint gate bus to exit to exit Receive rental to bus to car contract Receive car assignment © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 8
  • 9. LEAN is all about identifying and eliminating waste “Waste” is seen differently in LEAN… Over Producing • Traditionally, waste has been Over Work In viewed as an object. It is very easy Processing Process to envision a barrel of scrap metal or plastic and identify it as waste. Errors & Transport Rework • In LEAN thinking, the term waste actually refers not to the physical Excess Waiting material but rather the relationship Motion of the resource to the member. In LEAN, waste is measured as consumption of resources – time and capital © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 9
  • 10. Examples of Waste in Credit Unions • Member waiting for Over service Producing • Cumbersome transactions Over Work In Processing Process • Two forms, similar info • Searching for information Errors & Transport to answer a question Rework • Reports created, not used Waiting Excess • Walk to/from the copier Motion • Misapplied loan payment • File maintenance and retention It’s all about core member value © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 10
  • 11. Lean Improvement Metric Benchmark Gains What others say about Lean 0% 25% 50% 75% 100% “Lean Adopters Identify More Labor Capacity Waste and Operate More Efficiently” Lead Time/Delivery Errors and Rework “Lean Is Inexpensive and Revenue Growth Generates Solid Returns” Handoff Reduction Corporate Executive Board, Operations Council™ 2006 Study on Lean Manufacturing for Financial Services Decision Points © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 11
  • 12. Improving the Member Experience “The secret is in the dirt.” -Ben Hogan Your most powerful competitive advantages are where the work gets done LEAN involves a set of principles, tools, and methods to see and then collaboratively eliminate waste. © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 12
  • 13. General Overview • Founded in 1952 by military personnel • $3.6 Billion CU serving more than 300,000 members • 31 branches – Ten underserved areas – Three to five new branches being built per year – Three in-school branches • 935 employees – Average tenure of senior staff = 15 years – 5 or more years of service = 40% of employees – Part time = approximately 10% of employees © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 13
  • 14. Lean Projects at RBFCU • Member Service Center: Outbound Calls • Consumer Lending: Video Conferencing • Human Resources: Recruitment • Records and Research: Document Imaging • Information Systems: Help Desk • Branch Vision Planning Session • Member Services: Asset Protection • 5S Project © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 14
  • 15. Video Conferencing Branch Channel Loan Origination Context and Challenge • New video conference service for loan origination process at the branches • Pilot results showed high member acceptance • Demand for service was growing and threatened to exceed the loan officer capacity • Members experienced significant variation in the time to complete the process © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 15
  • 16. Video Conferencing Branch Channel Loan Origination Approach Results • Cross functional team from branches and • Reduced member wait/hold time by 30% Lending Department took on the challenge • Improved lending productivity by 17% of eliminating waste and standardizing the process. • Decreased forms/paper and associated printing (23 hrs/month) • Team gathered for a 5-day “Kaizen” event to review the video conferencing process, • Developed training on new process for specifically those that did not add value branches and lending center Kaizen – A collaborative Lean Since then methodology to rapidly identify and • Expanded from 6 to 17 Branches eliminate waste. Typical event duration with Video Lending is 4-5 days. Improvements are • Average number of video conference implemented or tested during the week calls increased from approximately to evaluate impact. 250 to 2,000 per month. © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 16
  • 17. Member Service Call Center Context and Challenge • The Member Service Center outbound transfer call volume had risen to 37% • Service level objectives were not being met; the call abandonment rate was 8.9% • Approximately 50% of the transferred calls were due to training challenges • The call center needed to reduce transfers, ensure capacity was available for growth while maintaining high levels of member service © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 17
  • 18. Member Service Call Center Approach Results A Kaizen team from including the Member Service Center, IT, Consumer Lending, Card Metric Before After Services and Accounting met for a 5-day Transfer 50% 20% improvement event. Key steps included: Rate Inbound Map/Quantify the member experience Reduced 28% Calls Identify waste Abandon 8.9% 5% Identify/Prioritize improvements Rate • “Just do It” • Process change to reduce steps and improve flow Handle 169 sec 150 Sec • “5S” to improve efficiency of work environment • Leverage existing technology (simplify screens, IVR) Time Simulate/Pilot best ideas to gage impact Creativity before Capital Establish training document $430K Savings Report Out and Celebrate © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 18
  • 19. Branch Workforce Management (in process) Context and Challenge • Due to e-technologies, branch volume is declining; however, transaction complexity has increased • Staffing per branch was relatively flat year-to-year • New branches are opening and require additional resources and training • We needed to identify opportunities to simplify processes and best allocate resources • Core objective was to increase transactions per employee while maintaining high levels of member service Results • Constructed a resource planning tool to better align resources to transaction volumes while maintaining superior member service • Projected savings of $1.5 million over the first two years © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 19
  • 20. Branch Workforce Management Approach Results • Assessed branch processes, overall • Simplified scheduling model that matches performance, and opportunities current scheduling outputs • Launched a LeanSigma Workforce • After 3 months, piloted the workforce Management Project management tool with 4 Branches: • Tool reveals potential savings of 10-20% • Managers can use the tool to match capacity to volume • Currently testing the resource planning model across remaining 27 Branches Anticipate 10-20% resource savings over the next two years while still maintaining member • Developed models/tools to assist with service expectations. allocation of resources by branch, day/hour • Pilot and roll-out tool; adjust schedules and metrics © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 20
  • 21. How To Get Started? • Pick a single pilot area or service – Branch Teller Transactions, Lending Processes, Branch Capacity, IT Help Desk, IT Application Development, Finance Reporting, … • Develop a better understanding of member experience – initial contact, request delays, contact points, hand-offs • Identify waste • Eliminate the low hanging fruit with simple creativity • Learn and leverage Lean Principles to drive out more of the waste and redefine the service • If you cannot measure it, you cannot improve it • Expand beyond pilots to encompass the whole Credit Union … recognize that this can involve a culture shift © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 21
  • 22. Questions? © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. © 2008 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 22
  • 23. Thank You Guidon Performance Solutions 866-986-4414 or 480-986-4414 contact@guidonps.com www.guidonps.com © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. © 2008 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 23