Eliminating wasteful activities is one way to drive improved metrics in a bank, including the organization’s efficiency rating. While attacking problem areas and processes can be engaging, there are times when your team may think the people, rather than the process, are the problem. Utilizing some tips and tools to get the staff accustomed to looking deeply at a process helps takes the emotion out of the review and allows them to review activities through a new lens.
One of the most powerful tools is to review the process steps and look for wasteful activities. Wasteful activities are simply defined as non-value-added or nonregulated activities that happen in the delivery of a product or services to a customer. The concept of waste originated in the manufacturing industry and is illustrated with the acronym DOWNTIME. This is defined as:
One can see how this would create extra expense when creating goods, but it loses some clarity when applied to services. The same concepts have been updated to work in a service industry and can be applied where data or information, rather than raw materials, is processed. The tool for the service industry can be illustrated with the acronym CHAMPION. This is defined as:
Using CHAMPION, a team can start to uncover wasteful activities that happen in process because of the process itself, rather than the people executing the steps. Take the simple activity of opening a customer account, represented by the following steps:
- Step One: Customer comes to bank.
- Step Two: Customer fills out application.
- Decision Point: Is the application complete?
- If no: Start over and recontact customer.
- If yes: Move to Step Three.
- Step Three: Open account.
It is represented by the following process flow diagram:
This doesn't look too bad, but if we look at the process through the lens of CHAMPION, we see this:
Now we can see that there are some wasteful steps in this process. What if we introduced an electronic application that had all of the fields marked as required, forcing correct information to be entered the first time. At that point, the flow would look like this:
By using CHAMPION to dive into daily processes and activities, it becomes easier to identify and brainstorm solutions to these wasteful activities. With each wasteful step eliminated, we shave time off the delivery of services to customers, therefore increasing the efficiency of the process and ultimately the organization as a whole. If you want to explore this model in your organization or have questions about the efficiency of any of your business processes, contact Brett Polglaze bpolglaze@wipfli.com or your Wipfli relationship executive.
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