lean six sigma implementation experiences in financial services industry

04/10/231

Lean Six SigmaImplementation ExperiencesIn Financial Services Industry

Jim KaminskiHuntington Bank

Internal Business Consultant

2nd Annual SuccessfullyImplementing Six Sigmain Financial Services

June 21-23, 2005

The Westin Times SquareNew York, New York

04/10/232

Personal Background

15 Years Financial Services Industry Experience10 Years CI Methods in 3 Companies, Financial Services

15 Years Financial Services Industry Experience10 Years CI Methods in 3 Companies, Financial Services

Introduction

Experiences In Continuous Improvement

• PNC Bank – Launched CI Initiative

• Bank One – Led CI initiative, Launched Lean Six Sigma

• Huntington Bank– Re-Launch Lean Six Sigma

PNC BankFinancial Services

CI

Chase/Bank OneFinancial Services

CI, Lean, Six Sigma

Huntington BankFinancial ServicesLean, Six Sigma

04/10/233

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 understandingthe 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

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LSS Implementation Options

#2 Execute & Morph#2 Execute & Morph#2 Execute & Morph#2 Execute & Morph

On YourMark

Go GetSet

#1 Plan & Execute

On YourMark

GetSet

Go

Business Culture and CI Maturity are Key Performance Indicators for Implementation Approach

Business Culture and CI Maturity are Key Performance Indicators for Implementation Approach

- Proof of Concept (Pilot)#3 Pilot, Plan, & Execute

• AssembleMinimumInfrastructure










On YourMark



• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

Go

Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure

• Set - Vision- Mission-












GetSet

Assess CultureAssess CultureAssess CultureAssess CultureAssess CultureAssess CultureAssess CultureAssess CultureAssess CultureAssess CultureAssess CultureAssess 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•

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Start

AcceptanceIn

crea

sin

g L

evel

s o

f A

ccep

tan

ce

Time

LSS Deployment Continuum-Proof of Concept

Decreasing Challenges

•Assess Culture

•Strategy•Infrastructure

• Benefits

• Conduct Pilots

•Vision

•Project Selection•Training

•Leadership

•Execution

•Implementation•Sustainability

• Celebrate Success

• Create Pull for LSS

•Assess Culture

•Infrastructure

•Mission

•Modify•Assess Culture

04/10/236

LSS Deployment: Assessing the Culture

AlignmentLine of Business Strategy

Operational Strategy“Know Your Customer”

Economic Figures

ConfigurationQuality ReviewsCapacity Models

End-End AccountabilityScalability

ConductScorecards

TargetsAccountability

IncentivesBusiness ReviewsCI Fundamentals

PeopleInternal Value PropositionExternal Value Proposition

Foster FeedbackTrainingAttrition

Assess Assess CultureCulture

Assess Assess CultureCulture

Understanding how these drivers of performance impacts the organization willhelp determine an approach for deploying LSS

Understanding how these drivers of performance impacts the organization willhelp determine an approach for deploying LSS

04/10/237

LSS Deployment: CI Fundamentals

Voice ofProcess

BusinessReview

Within Organization

With Suppliers

WithCustomers

Reset Project Priorities

TOP 5

•From Operating PlansPlan

•From BusinessReviews

Control Charts

MeasureResults

MeasureResults

MeasureVariation

& C/T Ongoing&

Sustain Gains

Control Charts

PerformanceScorecards

SpeedQuality

ProductivityFinancial

People

Identify Degrees& Type of

Process VariationAnd Cycle Time

CustomerVoice of

VerifyCustomer’s

Requirements

Voice ofMarket

ImplementKnown

Solution

Impro

ve

Pro

cess

es

Des

ign

Solve Problems;Reduce VariationAnd Cycle Timewith AdditionalTools & Methods

Pro

cess

es

LSS

….A more powerful process which will enable the next generation of problemsolving (Lean and Six Sigma) that will deliver on stretch performance commitments

….A more powerful process which will enable the next generation of problemsolving (Lean and Six Sigma) that will deliver on stretch performance commitments

RequirementsRequirements IdentificationIdentification PrioritizationPrioritization ExecutionExecution BenefitsBenefits

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CI Fundamentals: Setting the Foundation for LSS

Gen 2: Six Sigma

CI Fundamentals

Gen 3: LSS

• Rigorous 6 Step Problem Solving Approach coupled with Statistical Tool Use•Kaizen Problem Solving 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

• 5s•Kaizen•Pull Systems

CI Fundamentals

• Metrics• Scorecards

• Production Reviews•Basic Problem Solving

•Dashboard

Every house needs a foundation to build uponCI Fundamentals is the foundation in which to build a LSS program

Every house needs a foundation to build uponCI Fundamentals is the foundation in which to build a LSS program

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Org. Overview

Methodology – CI evolving to Lean Six Sigma

Environment

•Results driven•No history of Corp. Quality Initiative • Internal morale issues re: quality •Service Excellence initiatives

successful, but stalling

Areas of Emphasis

•Day 1 and Day 2 Operations•Quality; productivity; cycle time; investment avoidance; capacity

Implementation

• Owned/Driven by Operational CEO• LOB strategy/Business driven• 40% IC linked to results• High Potentials – MBB’s & BBs

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 andImprove Corporate profitability”

Proof of Concept Approach, Incremental gains

Chase/Bank One

04/10/2310

Adopt Experience

Challenges• Most valued resources supporting multiple priorities• Participation positioned like Army draft• “Not Invented Here” resistance; “Corporate” project• No impetus to change (at launch)• Competing Corporate priorities & resources Eventual Approach Modifications (after 1 year)• Hired in skills to create critical mass & commitment • Department established; “Career choice”• CI approach; No large-scale implementation

Adoption ExperiencesChase/Bank One

Chase/Bank OneFinancial Services

CI, Lean, Six SigmaAdopt

PNCKey Bank

GECI, Lean, Six Sigma

04/10/2311

Start

Acceptance

Incr

easi

ng

Lev

els

of

Acc

epta

nce

Time


Chase/Bank One

•Assess Culture


• Benefits

• Conduct Pilots

•Vision


•Leadership

•Execution




•Assess Culture

•Infrastructure

•Mission



04/10/2312

CI Evolution to Lean Six SigmaChase/Bank One

CI Fundamentals


• Production Reviews• Basic Problem Solving

•Dashboard CI Fundamentals

Gen 2: Six Sigma

+

• Validate CTQ



Gen 2: Six Sigma

CI Fundamentals

Gen 3: LSS

• Rigorous 6 Step Problem Solving Approach coupled with Statistical Tool Use:

DMAICTLEAN

++CI Fundamentals

Gen 1: Lean


11

22

33

04/10/2313

Lessons Learned

Lessons Learned

•Cultural and Readiness Assessment•Introduction of CI fundamentals•Corporate wide training•Project teams•Acquiring time•Making true lean sigma improvements•Making lean six sigma a priority amidst the other initiatives•Speaking in the organization’s language versus Lean Manufacturing or Six Sigma language•People’s ability to match their process issue/need with lean six sigma as solution will just take time.

Lessons LearnedChase/Bank One

04/10/2314

Org. Overview

Methodology – Evolution of Lean Six Sigma

Environment

•Early stages in Corp Quality Initiative •Adoption of Operational Excellence

Initiative successful, but stalled•Regions have options to opt out, not currently a Corp mandate

Areas of Emphasis

•Mortgage, Retail, Treasury Mgmt,

Call Centers, Product•Quality; productivity; cycle time; capacity, revenue

Implementation

• Owned/Driven by Retail Executive• LOB strategy/Business driven• 60% IC linked to results• Internal Consulting Group-

Black Belts

Lean Six Sigma Strategy

Lean and Six viewed as: “ Gen 2Of Simply the Best Service Initiative

Pathfinder Approach, Small wins

Huntington Bank

Lean Six Sigma - “A Guide for Some Things We Do”

04/10/2315

Adoption Experience

Challenges• Early maturity in CI; fundamentals to build upon spotty• Limited “right” data• Lacked Top Down sponsorship• Mentality of “manufacturing only” use• Excessive statistics & tools Eventual Approach Modifications (after 6 months)• Limit scope• Pilots to deliver $s and Lessons Learned • Post Pilots: limited roll-out to “ready” groups

Adoption ExperiencesHuntington Bank

Huntington BankFinancial ServicesLean Six Sigma.

Adopt

Bank OneFinancial Services

CI and Lean

04/10/2316

Start

Acceptance

Incr

easi

ng

Lev

els

of

Acc

epta

nce

Time


Huntington Bank

•Assess Culture


• Benefits

• Conduct Pilots

•Vision


•Leadership

•Execution




•Assess Culture

•Infrastructure

•Mission



04/10/2317

Evolution Lean Six SigmaHuntington Bank

CI Fundamentals


• Production Reviews•Basic Problem Solving

•Dashboard

+CI Fundamentals

Gen 1: Lean


22

33

+CI Fundamentals

Gen 2: Six Sigma

• Validate CTQ



Gen 2: Six Sigma

CI Fundamentals

Gen 3: LSS

• Rigorous 6 Step Problem Solving Approach coupled with Statistical Tool Use:

DMAICTLEAN

+

11

44

04/10/2318

Lessons Learned

Lessons Learned

• A simple architecture• Internal expertise • Modify the model to fit your organization• Go at a pace that suits the organization’s readiness• Focus on creating pull; don’t force agenda• Don’t apply the tools in an area not ready• Start small, build successes, and sell like Ronco !!• Be selective with your hosts for pilots

Lessons LearnedHuntington Bank

04/10/2319

Chose #1: Experience The Culture; Deliver $$’s; Create PullChose #1: Experience The Culture; Deliver $$’s; Create Pull

LSS Implementation Options

#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











On YourMark



Instead ofInstead ofInstead ofInstead ofInstead ofInstead ofInstead ofInstead ofInstead ofInstead of

On YourMark

On YourMark

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

• ExecutePlan

Go

Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure













GetSet

Assess CultureAssess CultureAssess CultureAssess CultureAssess CultureAssess CultureAssess CultureAssess CultureAssess CultureAssess CultureAssess CultureAssess 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 GetSet

GetSet

Go

04/10/2320

Pilot Approach

“On Your Mark”: Small Investment, Below Radar“On Your Mark”: Small Investment, Below Radar

LSS Implementation

Assemble minimum requirement infrastructure…

• Assume small scope, 2-4 pilots

• Hire or procure expertise – Lean Manufacturing / Six Sigma

• Select internal trainees – High Potentials

• Procure or create documented approach – “Event” / DMAICT

• Partner with Business Unit on their priorities

Example: Mortgage Application Cycle Time

04/10/2321

Pilot Approach

“Get Ready”: Cause & Effect Wins; Culture Lessons Learned“Get Ready”: Cause & Effect Wins; Culture Lessons Learned

Conduct pilots…

• Select several projects & areas (risk management)

• Focus - small scope: avoid “world hunger”

• Define participation of process owners: who & roles

• Design execution format & expectations: e.g. Pre-work, event, follow-up, sustain

• Measure tangible results

• Grab learning nuggets along the way

Example:Mortgage Cycle Time Reduction

LSS Implementation

04/10/2322

Pilot Approach

• Credit the sponsor with success

• Address participant’s time availability issues

• Address Implementation challenges & abilities

• Assess characteristics of readiness

• Modify methodology to fit readiness / culture

• Maintain orientation: exponential # of successes required to overcome any failures.

LSS Implementation

Key Learnings from Pilot that feed “Get Set” PhaseKey Learnings from Pilot that feed “Get Set” Phase

Assess the Culture…

Example: Mortgage Cycle Time Reduction

04/10/2323

Pilot Approach

• “Success” positions LSS for commercialization

• Door-to-door sell w/ sponsors during operating plan build

• Resources added to ICG on basis of demand

• Continued application based training for trainees

• Positioned as a “service” of ICG

LSS Implementation

“Get Set” and Go: Plan and Implement at A Pace Your Organization Can Handle “Get Set” and Go: Plan and Implement at A Pace Your Organization Can Handle

Get Set and Go

Example:

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Takeaways.

Summary

• Traditional Implementation Methods have not translated well

• The Business Culture and CI Maturity are Key Performance Indicators for Implementation Approach

• Pilot Approach is a viable precursor to broader implementation

• Pilots allow for $ return and lessons learned re: culture and maturity

• Pilots allow for longer term implementation design fitted for the business

lean six sigma implementation experiences in financial services industry

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