Lean Six Sigma Implementation Experiences in Financial Services Industry

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Lean Six Sigma Implementation Experiences in Financial Services Industry

  1. 1. Lean Six Sigma Implementation Experiences In Financial Services Industry Jim Kaminski Huntington Bank Internal Business Consultant 2nd Annual Successfully Implementing Six Sigma in Financial Services   June 21-23, 2005   The Westin Times Square New York, New York
  2. 2. Personal Background 15 Years Financial Services Industry Experience 10 Years CI Methods in 3 Companies, Financial Services Introduction <ul><li>Experiences In Continuous Improvement </li></ul><ul><li>PNC Bank – Launched CI Initiative </li></ul><ul><li>Bank One – Led CI initiative, Launched Lean Six Sigma </li></ul><ul><li>Huntington Bank– Re-Launch Lean Six Sigma </li></ul>PNC Bank Financial Services CI Chase/Bank One Financial Services CI, Lean, Six Sigma Huntington Bank Financial Services Lean, Six Sigma
  3. 3. This case study will highlight practical experiences and implementation options for deploying Lean and Six Sigma. This session will cover topics including the importance of valuing and assessing the organizations readiness before committing to a fully embedded LSS deployment. In addition understanding the importance of and maturity of your business lines and carrying out a controlled piloting effort. Highlights include proof of concept deployment efforts at Bank One/Chase. In addition, how Huntington Bank has leveraged a small cadre of internal resources to deploy Lean Six Sigma at the grassroots: using a pilot and demonstration projects to generate successes and therefore create pull for Lean Six Sigma methods. Case Study Overview Overview
  4. 4. LSS Implementation Options Business Culture and CI Maturity are Key Performance Indicators for Implementation Approach #2 Execute & Morph #2 Execute & Morph #2 Execute & Morph #2 Execute & Morph On Your Mark Go Get Set #1 Plan & Execute On Your Mark Get Set Go - Proof of Concept (Pilot) #3 Pilot, Plan, & Execute • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure On Your Mark • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan Go Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - Get Set Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • Get Ready • Conduct Pilots •
  5. 5. Start Acceptance Increasing Levels of Acceptance Time LSS Deployment Continuum-Proof of Concept Decreasing Challenges <ul><li>Assess Culture </li></ul><ul><li>Strategy </li></ul><ul><li>Infrastructure </li></ul><ul><li>Benefits </li></ul><ul><li>Conduct Pilots </li></ul><ul><li>Vision </li></ul><ul><li>Project Selection </li></ul><ul><li>Training </li></ul><ul><li>Leadership </li></ul><ul><li>Execution </li></ul><ul><li>Implementation </li></ul><ul><li>Sustainability </li></ul><ul><li>Celebrate Success </li></ul><ul><li>Create Pull for LSS </li></ul><ul><li>Assess Culture </li></ul><ul><li>Infrastructure </li></ul><ul><li>Mission </li></ul><ul><li>Modify </li></ul><ul><li>Assess Culture </li></ul>
  6. 6. LSS Deployment: Assessing the Culture Alignment Line of Business Strategy Operational Strategy “ Know Your Customer” Economic Figures Configuration Quality Reviews Capacity Models End-End Accountability Scalability Conduct Scorecards Targets Accountability Incentives Business Reviews CI Fundamentals People Internal Value Proposition External Value Proposition Foster Feedback Training Attrition Assess Culture Understanding how these drivers of performance impacts the organization will help determine an approach for deploying LSS
  7. 7. LSS Deployment: CI Fundamentals … . A more powerful process which will enable the next generation of problem solving (Lean and Six Sigma) that will deliver on stretch performance commitments Voice of Process Business Review Within Organization With Suppliers With Customers Reset Project Priorities TOP 5 • From Operating Plans Plan • From Business Reviews Control Charts Measure Results Measure Results Measure Variation & C/T Ongoing & Sustain Gains Control Charts Performance Scorecards Speed Quality Productivity Financial People Identify Degrees & Type of Process Variation And Cycle Time Customer Voice of Verify Customer’s Requirements Voice of Market Implement Known Solution Improve Processes Design Solve Problems; Reduce Variation And Cycle Time with Additional Tools & Methods Processes LSS Requirements Identification Prioritization Execution Benefits
  8. 8. CI Fundamentals: Setting the Foundation for LSS Every house needs a foundation to build upon CI Fundamentals is the foundation in which to build a LSS program Gen 2: Six Sigma CI Fundamentals Gen 3: LSS <ul><li>Rigorous 6 Step Problem </li></ul><ul><li>Solving Approach coupled </li></ul><ul><li>with Statistical Tool Use </li></ul><ul><li>Kaizen Problem Solving </li></ul>DMAICT and Lean + CI Fundamentals Gen 2: Six Sigma • Validate CTQ -- Develop VOC • Measure Process Variation -- Control Charts -- Process Capability + + CI Fundamentals Gen 1: Lean <ul><li>5s </li></ul><ul><li>Kaizen </li></ul><ul><li>Pull Systems </li></ul>CI Fundamentals • Metrics <ul><li>Scorecards </li></ul><ul><li>Production Reviews </li></ul><ul><li>Basic Problem Solving </li></ul>• Dashboard
  9. 9. Org. Overview Methodology – CI evolving to Lean Six Sigma Environment <ul><li>Results driven </li></ul><ul><li>No history of Corp. Quality Initiative </li></ul><ul><li>Internal morale issues re: quality </li></ul><ul><li>Service Excellence initiatives </li></ul><ul><li>successful, but stalling </li></ul>Areas of Emphasis <ul><li>Day 1 and Day 2 Operations </li></ul><ul><li>Quality; productivity; cycle time; </li></ul><ul><li>investment avoidance; capacity </li></ul>Implementation <ul><li>Owned/Driven by Operational CEO </li></ul><ul><li>LOB strategy/Business driven </li></ul><ul><li>40% IC linked to results </li></ul><ul><li>High Potentials – MBB’s & BBs </li></ul>Lean Six Sigma - “A Guide for Everything We Do” CI and Lean Strategy CI and Lean Six Sigma viewed as : “ Next Level of Problem solving to Achieve world class quality and Improve Corporate profitability” Proof of Concept Approach, Incremental gains Chase/Bank One
  10. 10. Adopt Experience <ul><li>Challenges </li></ul><ul><li>Most valued resources supporting multiple priorities </li></ul><ul><li>Participation positioned like Army draft </li></ul><ul><li>“ Not Invented Here” resistance; “Corporate” project </li></ul><ul><li>No impetus to change (at launch) </li></ul><ul><li>Competing Corporate priorities & resources </li></ul><ul><li>Eventual Approach Modifications (after 1 year) </li></ul><ul><li>Hired in skills to create critical mass & commitment </li></ul><ul><li>Department established; “Career choice” </li></ul><ul><li>CI approach; No large-scale implementation </li></ul>Adoption Experiences Chase/Bank One Adopt Chase/Bank One Financial Services CI, Lean, Six Sigma PNC Key Bank GE CI, Lean, Six Sigma
  11. 11. Start Acceptance Increasing Levels of Acceptance Time Decreasing Challenges Chase/Bank One <ul><li>Assess Culture </li></ul><ul><li>Strategy </li></ul><ul><li>Infrastructure </li></ul><ul><li>Benefits </li></ul><ul><li>Conduct Pilots </li></ul><ul><li>Vision </li></ul><ul><li>Project Selection </li></ul><ul><li>Training </li></ul><ul><li>Leadership </li></ul><ul><li>Execution </li></ul><ul><li>Implementation </li></ul><ul><li>Sustainability </li></ul><ul><li>Celebrate Success </li></ul><ul><li>Create Pull for LSS </li></ul><ul><li>Assess Culture </li></ul><ul><li>Infrastructure </li></ul><ul><li>Mission </li></ul><ul><li>Modify </li></ul><ul><li>Assess Culture </li></ul>LSS Deployment Continuum-Proof of Concept
  12. 12. CI Evolution to Lean Six Sigma Chase/Bank One CI Fundamentals • Metrics <ul><li>Scorecards </li></ul><ul><li>Production Reviews </li></ul><ul><li>Basic Problem Solving </li></ul>• Dashboard CI Fundamentals Gen 2: Six Sigma + • Validate CTQ -- Develop VOC • Measure Process Variation -- Control Charts -- Process Capability Gen 2: Six Sigma CI Fundamentals Gen 3: LSS <ul><li>Rigorous 6 Step Problem </li></ul><ul><li>Solving Approach coupled </li></ul><ul><li>with Statistical Tool Use: </li></ul>DMAICT LEAN + + CI Fundamentals Gen 1: Lean <ul><li>5s </li></ul><ul><li>Kaizen </li></ul><ul><li>Pull Systems </li></ul>1 2 3
  13. 13. Lessons Learned <ul><li>Lessons Learned </li></ul><ul><li>Cultural and Readiness Assessment </li></ul><ul><li>Introduction of CI fundamentals </li></ul><ul><li>Corporate wide training </li></ul><ul><li>Project teams </li></ul><ul><li>Acquiring time </li></ul><ul><li>Making true lean sigma improvements </li></ul><ul><li>Making lean six sigma a priority amidst the other initiatives </li></ul><ul><li>Speaking in the organization’s language versus Lean Manufacturing or Six Sigma language </li></ul><ul><li>People’s ability to match their process issue/need with lean six sigma as solution will just take time. </li></ul>Lessons Learned Chase/Bank One
  14. 14. Org. Overview Methodology – Evolution of Lean Six Sigma Environment <ul><li>Early stages in Corp Quality Initiative </li></ul><ul><li>Adoption of Operational Excellence </li></ul><ul><li>Initiative successful, but stalled </li></ul><ul><li>Regions have options to opt out, not currently a Corp mandate </li></ul>Areas of Emphasis <ul><li>Mortgage, Retail, Treasury Mgmt, </li></ul><ul><li>Call Centers, Product </li></ul><ul><li>Quality; productivity; cycle time; </li></ul><ul><li>capacity, revenue </li></ul>Implementation <ul><li>Owned/Driven by Retail Executive </li></ul><ul><li>LOB strategy/Business driven </li></ul><ul><li>60% IC linked to results </li></ul><ul><li>Internal Consulting Group- </li></ul><ul><li>Black Belts </li></ul>Lean Six Sigma Strategy Lean and Six viewed as : “ Gen 2 Of Simply the Best Service Initiative Pathfinder Approach, Small wins Huntington Bank Lean Six Sigma - “A Guide for Some Things We Do”
  15. 15. Adoption Experience <ul><li>Challenges </li></ul><ul><li>Early maturity in CI; fundamentals to build upon spotty </li></ul><ul><li>Limited “right” data </li></ul><ul><li>Lacked Top Down sponsorship </li></ul><ul><li>Mentality of “manufacturing only” use </li></ul><ul><li>Excessive statistics & tools </li></ul><ul><li>Eventual Approach Modifications (after 6 months) </li></ul><ul><li>Limit scope </li></ul><ul><li>Pilots to deliver $s and Lessons Learned </li></ul><ul><li>Post Pilots: limited roll-out to “ready” groups </li></ul>Adoption Experiences Huntington Bank Adopt Huntington Bank Financial Services Lean Six Sigma. Bank One Financial Services CI and Lean
  16. 16. Start Acceptance Increasing Levels of Acceptance Time Decreasing Challenges Huntington Bank <ul><li>Assess Culture </li></ul><ul><li>Strategy </li></ul><ul><li>Infrastructure </li></ul><ul><li>Benefits </li></ul><ul><li>Conduct Pilots </li></ul><ul><li>Vision </li></ul><ul><li>Project Selection </li></ul><ul><li>Training </li></ul><ul><li>Leadership </li></ul><ul><li>Execution </li></ul><ul><li>Implementation </li></ul><ul><li>Sustainability </li></ul><ul><li>Celebrate Success </li></ul><ul><li>Create Pull for LSS </li></ul><ul><li>Assess Culture </li></ul><ul><li>Infrastructure </li></ul><ul><li>Mission </li></ul><ul><li>Modify </li></ul><ul><li>Assess Culture </li></ul>LSS Deployment Continuum-Proof of Concept
  17. 17. Evolution Lean Six Sigma Huntington Bank CI Fundamentals • Metrics <ul><li>Scorecards </li></ul><ul><li>Production Reviews </li></ul><ul><li>Basic Problem Solving </li></ul>• Dashboard + CI Fundamentals Gen 1: Lean <ul><li>5s </li></ul><ul><li>Kaizen </li></ul><ul><li>Pull Systems </li></ul>2 3 + CI Fundamentals Gen 2: Six Sigma • Validate CTQ -- Develop VOC • Measure Process Variation -- Control Charts -- Process Capability Gen 2: Six Sigma CI Fundamentals Gen 3: LSS <ul><li>Rigorous 6 Step Problem </li></ul><ul><li>Solving Approach coupled </li></ul><ul><li>with Statistical Tool Use: </li></ul>DMAICT LEAN + 1 4
  18. 18. Lessons Learned <ul><li>Lessons Learned </li></ul><ul><li>A simple architecture </li></ul><ul><li>Internal expertise </li></ul><ul><li>Modify the model to fit your organization </li></ul><ul><li>Go at a pace that suits the organization’s readiness </li></ul><ul><li>Focus on creating pull; don’t force agenda </li></ul><ul><li>Don’t apply the tools in an area not ready </li></ul><ul><li>Start small, build successes, and sell like Ronco !! </li></ul><ul><li>Be selective with your hosts for pilots </li></ul>Lessons Learned Huntington Bank
  19. 19. LSS Implementation Options Chose #1: Experience The Culture; Deliver $$’s; Create Pull #3 Plan & Execute - Proof of Concept (Pilot) #1 Pilot, Plan, & Execute #1 Pilot, Plan, & Execute #2 Execute & Morph #2 Execute & Morph #2 Execute & Morph #2 Execute & Morph • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure On Your Mark • Assemble Minimum Infrastructure • Assemble Minimum Infrastructure Instead of Instead of Instead of Instead of Instead of Instead of Instead of Instead of Instead of Instead of On Your Mark On Your Mark • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan • Execute Plan Go Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - • Set - Vision - Mission - Get Set Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture Assess Culture • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • • Conduct Pilots • Get Ready • Conduct Pilots • Go Get Set Get Set Go
  20. 20. Pilot Approach “ On Your Mark”: Small Investment, Below Radar LSS Implementation <ul><li>Assemble minimum requirement infrastructure… </li></ul><ul><li>Assume small scope, 2-4 pilots </li></ul><ul><li>Hire or procure expertise – Lean Manufacturing / Six Sigma </li></ul><ul><li>Select internal trainees – High Potentials </li></ul><ul><li>Procure or create documented approach – “Event” / DMAICT </li></ul><ul><li>Partner with Business Unit on their priorities </li></ul>Example: Mortgage Application Cycle Time
  21. 21. Pilot Approach “ Get Ready”: Cause & Effect Wins; Culture Lessons Learned <ul><li>Conduct pilots… </li></ul><ul><li>Select several projects & areas (risk management) </li></ul><ul><li>Focus - small scope: avoid “world hunger” </li></ul><ul><li>Define participation of process owners: who & roles </li></ul><ul><li>Design execution format & expectations: </li></ul><ul><li>e.g. Pre-work, event, follow-up, sustain </li></ul><ul><li>Measure tangible results </li></ul><ul><li>Grab learning nuggets along the way </li></ul>Example:Mortgage Cycle Time Reduction LSS Implementation
  22. 22. Pilot Approach <ul><li>Credit the sponsor with success </li></ul><ul><li>Address participant’s time availability issues </li></ul><ul><li>Address Implementation challenges & abilities </li></ul><ul><li>Assess characteristics of readiness </li></ul><ul><li>Modify methodology to fit readiness / culture </li></ul><ul><li>Maintain orientation: exponential # of successes </li></ul><ul><li>required to overcome any failures. </li></ul>LSS Implementation Key Learnings from Pilot that feed “Get Set” Phase Assess the Culture… Example: Mortgage Cycle Time Reduction
  23. 23. Pilot Approach <ul><li>“ Success” positions LSS for commercialization </li></ul><ul><li>Door-to-door sell w/ sponsors during operating plan build </li></ul><ul><li>Resources added to ICG on basis of demand </li></ul><ul><li>Continued application based training for trainees </li></ul><ul><li>Positioned as a “service” of ICG </li></ul>LSS Implementation “ Get Set” and Go: Plan and Implement at A Pace Your Organization Can Handle Get Set and Go Example:
  24. 24. Takeaways. Summary <ul><li>Traditional Implementation Methods have not translated well </li></ul><ul><li>The Business Culture and CI Maturity are Key Performance </li></ul><ul><li>Indicators for Implementation Approach </li></ul><ul><li>Pilot Approach is a viable precursor to broader implementation </li></ul><ul><li>Pilots allow for $ return and lessons learned re: culture </li></ul><ul><li>and maturity </li></ul><ul><li>Pilots allow for longer term implementation design fitted for </li></ul><ul><li>the business </li></ul>

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