As the term "LEAN" is becoming a buzz word in the business community, many corporate banks and other financial institutions routinely apply the management principles of lean to help standardize straightforward business procedures. We emphasised the differences of lean office and automated office in the previous article. As we discussed, there is a difference between an automated office and a lean office. The automated office will have much office equipment but unless this is geared to streamlining process these are just machines. They need to be used judiciously.

Mr DMA Kulasooriya

Advantages of practising lean principles and lean tools in banking include speedier operations, lower costs, better products, and an improved customer experience. But many of an institution's most valuable activities involve dozens or even hundreds of steps that may require sophisticated customization and expert judgment from numerous sources-and thus resist standardization.
Three major strategic thrust areas for making a Lean Bank are;

1. Simplicity of Service Delivery Processes
2. Defect Free Products
3. Speed of Transactions

Power of Simplicity

Once Jack Welch said "You can't believe how hard it is for people to be simple, how much they fear being simple... Clear tough-minded people are the most simple."

Keeping things simple is one of the keys to business. Simplicity is an art of doing business. Simple messages travel faster, simpler designs reach customers faster and eliminations of wastes allows faster decision making.

Defect Free Products - Six Sigma Products
Reduction of defects in all critical processes to achieve continual and breakthrough improvements that impact the bottom-line and / or top-line of the organization and increases customer satisfaction.

Speed
Speed is everything. It is the indispensable ingredient of competitiveness. By simplifying the organization and instilling confidence, you create the foundation for an organization that incorporates speed into the fabric of the company.

Here are some examples to help you identify wastes in service delivery processes in the banking sector.
Defects:

Missing information, Errors, Rework, Customer Complaints
Waiting:

Waiting for paperwork, system downtime, time between batches, waiting for decisions/approvals, waiting for shared equipment
Inventory (Things in Process) :

Forms waiting to be worked on, cash not used to generate income, office buildings not completely utilized, holding unnecessary materials in archives/racks/shelves.
Motion:

Walking to deliver paperwork, non-ergonomic office lay-out, chasing for information, searching, walking.
Transportation:

Using mail where e-mail could be used, paper processes especially those requiring many original signatures.

Overproduction:
Working on the wrong thing at the wrong time, unnecessary paperwork, working on applications that will be rejected.

Over processing:
Non-value added steps, redundancies (several people doing the same).

All of us strive to shed fat and become lean. The same holds good for the organization you are running or working in, except for "the bottom line". This is the only area where owners or CEOs are concerned if it gets lean. The fatness of the bottom line is inversely proportional to the resources utilized while producing goods. If you want to get going towards a "Lean Bank" go ahead and start it now. Just remember, to put "lean" into practice, the process is a marathon race and not a 100-metre sprint.
-DMA Kulasooriya