Lean & Six Sigma in Financial Services by 7PVXUDv

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									Lean & Six Sigma in Financial Services:
             Case Study
                 Norwich Union Life
                     Presented to the IQPC Six Sigma Summit
                                   January, 2005
                                        by




           Matt Fahy                                       Harvey Dershin
   Director of Transformation                       Managing Director, Europe & Asia
      Norwich Union Life                             Aon Management Consulting
      An AVIVA Company                                      Rath & Strong
                  Agenda
• Aviva / NUL

• Our challenge

• Approach

• Achievements

• Conclusion
                           2
Aviva



        3
                    Aviva
•World’s fifth largest insurance group
   •51,000 employees
   •30 million customers worldwide
•UK’s largest insurance group
•Norwich Union Life is part of the Aviva group
   •UK’s largest provider of life, pensions and
   investment plans
   •market share of 13%




                                                  4
        NUL Business Environment

• Products            • Market
   – Pensions           – Competitive
   – Life Insurance     – Regulated
   – Mortgages          – Revenue constrained
• Customers
   – IFAs (brokers)
   – Individuals
   – Corporations




                                                5
               NUL Operations
                            • Approximately 5,500
                              staff in seven locations
Glasgow
                Newcastle



                     York

                     Sheffield




                        Norwich
     Bristol

                      Stevenage                          6
            Operations in Context
• 250+ legacy products

• 30+ major systems

• 2.7 million postal items received

• In excess of 42 million images created

• Over 5 million calls to the contact centre,
  23,000 per day




                                                7
Our challenge



                8
                     Background
• In 2003 we identified that we offered a variable, and
  sometimes poor, customer experience, that cost us too
  much money.

• Some customers and staff were losing confidence in our
  service

• Our major investments in technology were often not
  delivering the anticipated customer and efficiency benefits




                                                            9
                     Strategic Ambition
We decided to ‘Become the Best’ as recognised by our
customers for the delivery of consistent, quality, cost
effective service in comparison to our major competitors.
We will achieve this by...

   •   Being clear about the service promise we make
   •   Re-engineering our processes and excelling at performing them
   •   Delivering through the quality of our people
   •   Aligning technology and focusing on ‘fit for purpose’ and not
       ‘world class’
   •   Using different sourcing options (e.g. offshore / outsource) where
       appropriate for reasons of quality, cost and management focus

Winning through our focus on promises, processes and
people.

                                                                            10
                Process Excellence

• We adopted Process Excellence to provide us with:

   – quality of outcomes and improved customer experience

   – continuous improvement, incremental and stepped

   – clarity of what we do and the information we need on
     how well we do it

   – an ability to persistently drive out costs, realise business
     benefits and performance improvement


                                                              11
              What have we achieved?
•   A major overhaul of single biggest process (Life New Business)

•   Many improvements to customer experience (accuracy & cycle time)
    across a whole range of smaller processes. By year end this will have
    affected 40% of all our processes

•   Over 1000 staff engaged and directly involved

•   13 Lean workstreams and 26 six sigma projects underway or
    completed

•   Over 70 staff trained in specialist skills

•   Process Excellence being adopted across the Aviva Group

•   A 243% return on investment (3 years return on initial investment)


                                                                         12
Approach



           13
      Goals for first wave of Process
                Excellence
• Establish core skills

• Build momentum and enthusiasm

• Start to make real improvements
   – customer experience
   – process
   – Financials

• Not be dependant on technology changes
                                           14
                Shaping the Approach
• Hard financial target to be met in the current year

• Implications:
   –   Address processes across about 40% of the business
   –   Roll out across a broad front…quickly
   –   Engage large numbers of people…as willing participants
   –   Need to demonstrate significant results quickly

• Tactics:
   – Lead with Lean for waste removal and cycle time
     reductions and speed of execution
   – Follow closely with Six Sigma for defect elimination

                                                                15
         Change Management Context
• Environment:
   – Multi-dimensional transformation (offshoring, technology
     improvements, process excellence)
   – Operations-wide scope (approx 3000 people)
   – Aggressive targets


• Overall change readiness scores were modest. Weakest
  areas:
   –   Little experience with change of this magnitude
   –   Rigid administrative procedures
   –   Hierarchical organisational structure
   –   Concern over organisational stability
   –   Lack of skills re process improvement

                                                                16
       Change Management Strategy
• NU
  – Reach high + unswerving focus on results
  – Steering committee oversight
  – Establish Process Excellence Leader & adaptive, “virtual,” team
    for day-to-day management
  – Quickly build a track record of delivered results
  – Use of change “vectors” to communicate success
       •   Lean Specialists
       •   Lean Teams
       •   Green Belts
       •   Black Belts
       •   Local managers



                                                                      17
                 Lean Approach

                                                Current State
                         Mgmt Workshop 1        Value Stream Maps
                                                Key Metrics
                          Data Collection

                         Mgmt Workshop 2         Future State
                                                 Value Stream Maps, etc




 30 days    Just Do It                      Kaizen        10 weeks


            Just Do It                                    10 weeks
 30 days                                    Kaizen

 30 days    Just Do It                      DMAIC          6 months


1-2 years    DFSS                           DMAIC          6 months
                                                                          18
                        Accelerated Benefits Roll Out
                                              Week
        Item             1   2   3   4   5   6    7   8   9   10   11   12
  Management
1 Workshop 1             X
2 Collect Data               X
  Management
3 Workshop 2                     X
4    Lean Team Trng                  X
5    Pre Event Prep                      X
6    Event Part 1                            X
7    Data Collection                             X
8    Event Part 2                                     X
     Post Event
 9   Mgmt                                                 X
10   Benefit Sign off                                         X
11   Benefit Delivery                                              X    X
12   Corp Leveraging
     Leveraging Sign
13   Off
     Continued
14   Benefit delivery
     Leadership
15   Audit & Review
                                                                             19
                        Cascading Lean Rollout

                                                         Month
    Target Workstream     J     F      M        A   M    J     J         A   S   O    N   D
Workstream 1
Workstream 2
Workstream 3
Workstream 4
Workstream 5
Workstream 6
Workstream 7
Workstream 8
Workstream 9
Workstream 10

                              Lean activities           Implementation




                                                                                     20
                      Green Belt Training Format

             Activity                                        Month
                              1      2      3      4     5           6   7   8   9        10
Training                   3-days 3-days 3-days 3-days

Exam                                              X

Coaching                     X      X      X      X      X           X   X   X

Project Reviews                     X             X                  X

Pilot/Certification                                                  X   X   X




                                                                                     21
Achievements
      –
One Year Later

                 22
                                                                                                                                                                                          New Business Life Example
                        N B PROTECTION
                                                                                                                                                                                                                                                                                                                                                                Before - LEAN
                                                                                                                                                                                                                                                               Faxes, Telephone calls, e mails



    Customer'IFA'Partner,In
    ternal Seller

                                                                                                                                                                                                               Rewinds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Customer
    Life Protection Policy                                                                                                                                                                                                                                                                                                                                                                                                            Alastair:
                               12750 EDI PA                                                                                                                                                                    Rework: missing                                                                                                                                                                                                        U/W Reminders
    Application;                                                                                                                                      Alastair:                                                                                                                                                                                                                            Alastair Gardner:
                               425000 Paper PA                                                                                                       Indexing included here also                               info 30% (consumer                                                   No.reminders               every 2 weeks                                                               done by CSR's We have                                      Alastair Gardner:
    Mediacal Reports,
                               Paper 1585 per day                                                                                                    known as shelving . Post also                             30%)                                                                            0       52%                                                                                 detail on split of reports.                                Done by CSR's                                        Alastair Gardner:
    Reissues,Direct Debits
                               EDI 49 per day                                                                                                        needs indexing. Critical to get                           Reallocations if ill                                                            1       17%                                                                                 MM are done automatically.                                                                                      Too many contacts with customer                                                                         Alastair Gardner:
    MLA                                                                                                                                              post split. Possibly time actually                                                                                                                                                                                                                                                                                                                    from Admin - U/W                                                                            Back to Check too late in process (if needed at
                                                                                                                                                                                                               Re Scans (2 -3 %)                                                               2       18%
    Latest estimate from                                                                                                                             double that shown.                                                                                                                                                                                                                                                                                                                                    Can't read images                                                                           missing all) needs to go back through whole
                                   Post items 4121 per day                                                                                                                                                                                                                                     3       11%                                                                                                  Sue Hendry said she had this info precisely
    Norwich BCC is that                                                                                                                              Integrated WM will eliminate                                                                                                                                                                                                                                                                                                                          Missing info from customer;                                                                 info    process
                                                                                                                                                     much of these steps                                                                                                                       4        2%                                                                                                                                                                                                                                                                                             15%
    NB post is 2.6 times
                               5706 Items per day
    app flow.
                                   1                      2                        3                             4                           5                              6                                  7                     8        Caroline           9                         10                     11             Ian     12                     13                        14                         15                       16                          17                   18                     19                          20                21                22                 23                      24                          25                        26                     27                       28              29                  30                     31
                              Open Post &             Admin                    Batch Props               Send On Mini                    Scan Prop                     Work                               Work                  Info                        Missing                 Reminder                   NTU's                   MLA                 Allocation              Intitial                     Request                   U/W                          Receipt It          Fee                    Assess                      Make           Issue Decision       Decline             Quality                 MLA                        Acceptanc                 Start Date          Cancellation               Policy          Issue DUH          NTU                   Ageing                       Re Issues
                              sort                    Team Sort                                          Bus                                                                                              Allocatio                                         info                    s                                                                                                                                                                                                                             Evidence
                                                                                                                                                                       Allocation                                               Transfer                                                                                                                   to U/W                  Assessment                   Info                      Reminder                                         Payment                                            Decision                            Process             Check                                              e Letter                                      Letter                     Issue                              Recourse              Balance
                                                                                                                                                                       1                                  n2                                                                        (several)                                                                                                                                                                                                                                                                                                                                                                                                                                                                        from IFA
                              York                    Directed                                           Bus takes                       Part of                       Acceptance                         Allotment             Data                        Request                 Chasing                    Cancellin               Required                                    What is                      GPR,s, Fin                System                       Reports             GPR's                  CMO/Reass                                  Accepts would by                                                                            Manual for                                    System                     System          Declaration                              Non payment
                                                                                                         sacks of                                                      of work to                         to CSR's              capture,                    missing                 missing                    g off                   chase                                       required,                    Reps                      generated                    come in             only. MM's             ur requests                                pass this.                                                                                  consumer.                                     generated 99%              generated       of                                       of 1st
                              example.                to NB                                                                              larger                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         sub process time value important;
                                                                                                                                                                                                                                                                                    info etc                                                                                                                                                                                                                      add delay                                                                                                                              260 per day in
                              Batches                 teams                                              mail to                         operation                     team-                              2pm                   MLA,                        info                                               unwanted                and                                         some will be                 Others go                 plus ad hoc                  through             will be                                                           Declines or defer                                                                                                                                                    99% of time     Unimpaired                               premium.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         York. Rest                                                                                                                                                     4 days to action and then 1 - 7 days to
                              500. 0600 -             Rerouted                                           Dunnington                                                    Glasgow                                                  Missing                                                                        props                   limited #                                   accepted at                  direct.                                                scanning            done in                but very low                               would be done by                                                                            auto                                                                                     Health                                   Needs to be
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        dearchive, get docs into team up to 5
                              1000                    10%?                                               at 10.00                                                      only                                                     Informatio                                                                                             of deals                                    this point                   Role to prod                                           channel             bulk                   level??                                    admin                                                                                                                                                                                                                         collected
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        days
                                                                                                         daily                                                                                                                  n, etc                                                                                                                                                                          letter and                                                                                                                                                                                                                                                                                                                                                                                              Need policy back from client up to 1
                                                                                                                                                                                                                                                                                                                                                                                                                attach dec                                                                                                                                                                                                                                                                                                                                                                                              month; May take 90 days for customer to
                                                                                                                                                        Glasgow only                          1585 +                   1765                    578 daily                1038 but                     1176                        382                300                   2697                                                                                 53                   120                  3128                                                                                  4661                   2908                                                1187                                                                                                     12000                                advise.
12.18 per day. 11.89                                                                                                                                                                       18,000 tasks                                       but WIP is?                daily is
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Commission issues
hours


Staff                                   5                      7                       21                               1                           3                                7                           34                    387                       354                         354                       387                    387                   12                        98                          300                         300                     298                 300                       127                      127                   300          300                 300                         387                          60                    300                       387                    387           387               387                        260                                    300
Staff Hrs                               2                      1                        1                            0.66                         0.5                                7                            7                      7                         7                           7                         7                      7                    7                         7                            7                           7                       7                   7                         7                        7                     7            7                   7                           7                           7                      7                         7                      7             7                 7                          7                                      7
Errors %                               5%                     2%
Rework %                                                                                                                                                               some                               some                          30                                          see above                           0                   ~1%                       0                      3%                                                                                            xx%                                                                                                             15%
Volumes/day                          5706                   5706                     5706                            1625                     5706                              1396                          5706                    1585                        470                        354                      326                    727                  2000                      1180                           792                      500                      1131                  464                     700                      1109                    50            24               1165                         727                        260                    1506                      1537                1165                                328                     500
Std Time                              0.03                   0.33                       1                               40               2 secs                                   0.5                          0.75                  12.36                          5                         7.9                    2.69                      3                 0.083                         4                             5                        5                         4                 0.59                   26.25                         2                     5             2                 4.9                                                    7.5                    1.61                                                                                                       5                 16.13 mins
Total FTE                               11                     11                      11                               11                       11                                 7                            34                    387                        354                        354                      387                    387                     97                       98                           300                      300                       298                  300                     127                       127                   387           387                300                          387                      84.5                      387                       387                 387              387               387                    387                                       300
Time Required HRS                     2.85                 31.70                    95.10                             0.67                     0.03                            11.63                         71.33                  326.51                      39.17                      46.61                   14.62                   36.35                   2.78                    78.67                         66.00                    41.67                     75.40                 4.56                  306.25                     36.97                  4.17          0.80              95.14                         0.00                     32.50                   40.41                       0.00                0.00             0.00              0.00                  41.67       1503.54
Time Available HRS                      10                      7                      21                             0.66                      1.5                                49                           238                   2709                       2478                       2478                    2709                    2709                     84                      686                          2100                     2100                      2086                2100                      889                       889                 2100          2100                2100                        2709                        420                    2100                      2709                2709             2709              2709                    1820      48529.16
                                                                                                                                                                                                                                                                                             354


Life Protection Policy
MINUTES
LAPSE
VALUE ADD                             0.03
                                                135
                                                               57
                                                                          65
                                                                                        1
                                                                                                    90
                                                                                                                       40
                                                                                                                                    20
                                                                                                                                                 0.03                             0.5
                                                                                                                                                                                          24 hrs
                                                                                                                                                                                                    60
                                                                                                                                                                                                               0.75
                                                                                                                                                                                                                         1200
                                                                                                                                                                                                                                         12                         5
                                                                                                                                                                                                                                                                                       % for lots of time

                                                                                                                                                                                                                                                                                             7.9
                                                                                                                                                                                                                                                                                                        5760
                                                                                                                                                                                                                                                                                                                    2.69                        3
                                                                                                                                                                                                                                                                                                                                                    2880
                                                                                                                                                                                                                                                                                                                                                                  0.08
                                                                                                                                                                                                                                                                                                                                                                            2880
                                                                                                                                                                                                                                                                                                                                                                                               4                             5                          2
                                                                                                                                                                                                                                                                                                                                                                                                                                                               20160
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                4
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    2880
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 0.59
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           7200
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         26.25
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       1440
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         2
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               2880
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            4.9
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               4320
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   7.5
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          10080                   24480                                                          20160                70560
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        5                                   16.13
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          177250.00
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             167.36
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       123
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      2.79
CORE ADDED VALUE                      0.03                    0.3                       1                                                        0.03                                                          0.75                   12.36                      1.48                      1.76                                              1.38                 0.08                      2.98                          2.50                          2                    2.85                0.59                    11.59                           2                0.16          0.03               3.60                                                   1.23                     1.61                                                                                                                                                               50.32   0.84

Application;
Figures shown are average per day                                   Process Time = 79 mins
                                                                                             Alastair Gardner:
                                                                                             1hr + 30 mins
                                                                                                                             CT = 44 days                              Lead Time =
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Gillian Rhodes:
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          acceptance delay doc
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    Alastair:
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   1585*97% nwxt cell based on
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   the theorey that 20% NTU but
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   when do NTU 's occur


Medical Reports,
Reissues,Direct Debits                                                                                                                                                                                                                        After - LEAN
MLA                                                                                                                                                                                                                                                                                                                                                                                                             Reduced number of steps from 32 to 10,
Latest estimate from
Norwich BCC is that
                                                                                                                                                                                                                                                                                                                                                                                                                25% increase in productivity,
NB post is 2.6 times                                                                                                                                                                                                                                                                                                                                                                                            50-70% reduction in avg. cycle time.
app flow.
                                                                                        1                                                                                                                    2                                                                                                               3                                                                      4                                                                                                                5                                                                      6                                                                                                               7                                                       8
                                                                       Open Post &                                                                      Admin                                              Batch Batch Props                                                                                Index                                                                                  CELL                                                                                                            Chase                                                                 CELL                                                                                                             Chase                                                  Ageing
                                                                          sort                                                                          Team Sort                                                                                                                                                                                                                          Register & Underwrite                                                                                                                                                                 Underwrite & Document                                                                                                                                                           Balance
                                                                                                                                                                                                                                                                                                                                                                             Reminders                                                       Request                                                            Chasing                                                                                                                                                                                                                                   Non payment of
                                                                                                                                                                                                                                                                                                                                                                             Q-Checks                                                        Assess                                                                                                                       NTU's
                                                                                                                                                                                                                                              Scan                                                                                                                                                                                                                                                                                                                                                                               Assess                                                              NTU'S                                                 1st premium.
                                                                                                                                                            Look Up
                                                                                                                                                                                                                                                                                                                                                                                                                                             Direct
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                missing                                                  Receipts
                                                                                                                                                                                                                                                                                                                                                                             NTU's                                                                                                                                                                                                                                               Direct                                                            Start Dates                                              Needs to be
                                                                                                                                                            Activity                                                                                                                                                                                                                                                                                                                                            info etc                                                  Fees
                                                                                                                                                                                                                                                                                                                                                                             Receipts                                                        Debits                                                                                                                                                                              Debits                                                             Docs etc                                                 collected
                                                                                                                                                                                                                                                                                                                                                                             MLA                                                             Acceptance                                                                                                                    MLA
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               Acceptance
                                                                                                                                                                                                                                                                                                                                                                                                                                             Letters                                                                                                                    Cancellatio
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 Letters
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            n




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     23
                                                                                                                                                                                                                                                                Pensions Examples
                  Discontinuance of Schemes
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               OLD PROCESS
           DC1                                                                                                      DC2                                                                                                                                                                                                                             DC3                                                     DC4                                                                                                                                53 Steps
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               11+ months
                                                                                                                                                                                11+ months
                                                                                                                                                                                                                                                                                                                                                                                                                                                      New DISCO process has made
                                                                                                                                                                                                                                                              NEW PROCESS                                                                                                                                                                             70% improvement in CT
   Admin         DISCO
                                                                                                                                                                                                                                                              28 Steps                                                                                                                                                                                Reduce staff by 66% (18 to 6)
                                                                                                                                                                                                                                                              3 months + 1 week                                                                                                                                                                       = £204k
    3 months +1 week

    Renewals Yearly statements
                    R e new als                                                                                                                                                                                                                               Renewals (continued)                                                                                                                                Renewals - New Process




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         NEW PROCESS
                                                                                                                                                                                                                                    Ex ter na l                                                                                                                                                 External
                                                                                                                                                                                In te rna l                                                                                                                                                                                  Internal                                                             GMP Processor                  GMP Checker                  Internal
                                           C us to m er                         G M P P roc es s or                                 G M P C h e ck e r                                                                         D ep a rtm en t                                                                                                                                                                                 Customer                                                                                              Timings
                                                                                                                                                                              D ep ar tm en t
                                                                                                                                                                                                                                                                                       Customer                      GMP Processor                  GMP Checker                                Department                                              A                             B                       Department
                                                                                                                                                                                                                                                                                                                                                                            Department
                                                                                                                                                                                                                                                                                                           r
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                                                                                                                                                                                                                                                                                                                re                                                                                                                     2
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         10 Steps
                                                                                      C h e ck m em b e r li st
                                                                                   ( an d ac co u n ts : wh y? )
                                                                                                                                                                                                                                                                                                                               Check whether
                                                                                   f o r co m p let en ess a n d                                                                                                                                                                                                                                                                                                               Premium record
                                                                                                                                                                                                                                                                                                                            contracted out after                                                                                     3
                                                                                   re so l ve d i sc rep an c ies
                                                                                                                                                                                                                                                               Person A




                                                                                                                                                                                                                                                                                                                                  April ‘97
                                                                                                                                                                                                                                                                                                                           (why check this every
                                                                                      C o ll at e In ser ts ( p r e-
                                                                                                                                                                                                                                                                                                                                   year?)
                                                                                     p r in t ed sc h ed u le a n d
                                                                                                                                                                                                                                                                                                                            Check for deferred
                                                                                   c o ver let t er) (T e m p l ate                                                                                                                                                                                                                                                                                                                                     Vet Scheme
                                                                                                                                                                                                                                                                                                                          retirement and note on                                                                                                             4
                                                                                    l o n g win d ed o f te n n o t                                                     l                                                                                                                                                                                                                                                                                                   Pilot
                                                                                                                                                                   f ul                                                                                                                                                         reminder list
                                                                                                 u s ed )                                                       ail al                                                                                                                                                                                                                                                                                                      1 schedule, 68
                                                                                                                                                              m           s
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                            members
                                                                                                                                                        Au - re in se                                                                                                                                                                                                                                                                                  Calculate new        60 mins
                                                                                     Ph o t o co p y sch ed u l e                                         pre in cl                                                                                                                                                                                                                                                                                     premiums
                                                                                                                                                              k                                                                                                                                                             Pass for checking                                                                                                                5




PROCESS
                                                                                     a n d let t er, p as s f o r
                                                                                                                                                         p ac         M
                     P re -R e n e w a l




                                                                                             c h eck in g                                                                                                                                                                                                                                           Check everything done
                                                                                                                                                                                                                                                                                                                                                    and add any additions




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         Waste Removed
                                                                                                                                                                                                                                                                                                                          Resolve special cases        to reminders list
                                                                                                                                                                                                        C o l le ct a n d ta ke                                                                                             Send reminder for                                                                                                                                         Input new salary
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      details & key new    Pilot
                                                                                                                                                                                                            d o wn st ai rs                                                                                               special info (phone or                                                                                                                                          premiums
                                                                                       C o rr ec t an y e rro rs                                                                                    C o ll ect + so r t- ( Of fi ce                                                                                               letter)                                                                                                                                                      6           60 mins
                                                                                                                                             R ep ea t an d c h eck
                                                                                       Sea l an d p l ac e f o r                                                                                     se rvi ce ) > Su r re y S t
                                                                                                                                               p ro c ess s o f ar
                                                                                              m a il i n g                                                                                                ( Ma in p o st al )                                                                                                                                                                                                                              Check
                                                                                     F il e co p ies , cl o se j o b                                                                                R o ya l m ai l co ll ect 6. 30                                                                                                                                                                                                                          7
                                                                                                                                e
                                                                                                                           ig at r                                                                                                                                                                                              Close job                                                                                         Pilot
                                                                                                                        st       fo
                                                                                                                     ve      te       o                                                                                                                                                                                                                                                                                           90 mins
                                                                                                                  In p la         inf es )
                                                                                                                   t em i es em                                                                                                                                                                                                                                                                                                                       Issue Statement
                                                                                                                         lar
                                                                                                                     sa        s ch                                                                                                                                                                                                                                                                                                                          8
                                                                                                                           er
                                              R ece iv e : U p d a te                                                  ew                                                                    F le xib le A l lo cat i o n / Pu l l o f wo r k                                                                             Add new salary details/
                                                                                                                    (n              L
                                           sa la ri es an d i n f o rm o f                                                                                                                   wit h i n tea m s - fo rt n i g h t ly r o ll i n g                                                                               AVC trailer




34 Steps
                                                     ch an g e s                                                                                                                                               p l an s                                                                                                       Calculate new                                                                                                        Internal house-keeping                                     Office service fiche
                                              I F A an d t ru ste es                                                                                                                                                                                                                                                                                                                                                             Pilot
                                                                                     R e cei ve co m p le te d                                                                                                                                                                                                               premium levels                                                                                      20 mins
                                                                                                                                                                                                                                                                                                                                                                                                                                                              9                                                        10




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         (eg checking)
                                                                                     p ac k an d ad d t as k                                                                                                                                                                                                                excel spreadsheet              Check
                                                                                          co d e + cas e
                                                                                                                                                                                                                                                                                         e
                                                                                       r ece ip t+a ll o c ate                                                                                                                                                                        at
                                                                                                                                                                                                                                                                                   ig
                                                                                                                                                                                                  C u rre n t a n d F u t u re St at e                                           st atic of
                                                                                     D i ff er en t m e th o d s
                                                                                                                                                                                                 sh o u ld -t ake t i m es fo r eac h                                          ve m n lar                                  Check agent details
                                                                                        b e twe en te am s                                                                                                                                                                In      to tio                                  Key in new premiums
                                                                    of                                                                                                                           p h a se o f p ro c ess , M eas u re                                           au uc regu
                                                                py                                                                                                                                                                                                                od 5 ’s              st in                for gen1 system                                                                                                                                       Total should take time
                                                             co ed                                                                                                                                             act u a l                                                        pr st-9 VC                                                                                                                                                                                        for 68 members
                                                         ep     ris    at                                                                                                                                                                                                                            ue ts as               overnight cycle                                                                                                                                       scheme ~ 17hours
                                                       Ke t ho ies -                                                                                                                                                                                                             po A           Req en cle
                                                         au t or fil e                                                                                                                                                                                                                      J       em
                                                             na      f    ed             Pri n t j o b ca rd                                                                                                                                                                                      at cy                                                                                                                                                                           Pilot results
                                                         sig nt o dat                                                                                                                                                                                                                           st me n1 ess
                                                                                                                                                                                                                                                               Person B




                                                                                                                                                                                                                                                                                                                                Next day -                                                                                                                                        = 3hrs 50 mins
                                                           f ro     up                         Get f i le                                                                                                                                                                                         sa     ge                                                                                                                                                                       (3.4 mins/life)
                                                                ep                                                                                                                                                                                                                                          oc               Check updates
                                                             ke                          F i ll i n jo b c ard                                                                                                                                                                                            pr
                                                                                                                                                                                                                                                                                                               M             Request benefit                                                                                                                                      = 76% improvement

                                                                                                                                                                                                                                                                                                                               statements                                                                                                                                         Savings




Up to 28 mins
                                                                                                                                                                              F in d a n d b ri n g ad mi n                                                                                                                 Close job and link                                                                                                                                    7.5 FTE = £127k
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  based on 116k lifes
                                                                                           T i d y t h e fi l e                          -                                              p a cks
                                                                                                                                      ay
                                                                                                                                  d el e at




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         = 4 mins per life
                                                                                    R eq u est ad m i n p ack s
                                                                                                                                s      n                                                                            es
                                                                                                                            u se be do                                                                           ic
                                                                                                                          Ca                                                                                   rv n
                                                                                                                             uld e nd                                                                      se
                                                                                      T i d y ad m i n p ack s            co                                                                          ice ad mi                                                                                                            Check statements vs
                                                                                                                                                                                                  O ff he c ks             t
                                                                                   So rt a n yt h i n g >1 y r an d                                                                                   f ic pa         u es                                                                                                      schedule
                                                                                       sen d f o r f ic h ei n g                                                                                                 r eq                                                                                                     Prepare covering letter
                                                                                                                                                                                                            nl y       as
                                                                                    (r em o ve s ta p le s an d                                                                                           O th em t io n                                                                                                    Pass for checking              Check
                                                                                                                                                                                                                                                                                                                                                                                                                  DISCO Team




                                                                                                                                                                                                                     ep
                                                                                        co m p le te f o r m)                                                                                                   e xc

                                                                                          C h e ck W o r k
                                                                                   M o n i t o ri n g Sys te m f o r
                                                                                      o u t st an d in g t ask s
                                                                                      Su p p o sed t o ta ke                                                                                                                                                                                                                  Tab statements                                  Print and send
                                                                                    t h e se o ve r b u t d o n ’ t                                                                                                                                                                                                                                                            statements
                                                                                                                                                                                                                                                                                                                           Send to IFA/trustees
                                                                                                                                                                                                                                                                                                                           File documents/fiche                                Bowthorpe




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         = £160k
                                                                       d
                                                                    ad
                                                                to       -         C h eck ac co u n ts ( A M S)
                                                             80 otes
                                                         QH     n                               cl ea r
                                                       e      e      c ard
                                                     Us    em jo b         th           C h e ck sc h em e
                                                      s ch t on se wi                 A l lo c at io n r ep o r t s
                                                                                                                                                                                                                                                               Person A




                                                         pu d lia      l
                                                           an     le ga                                                             of n
                                                                                                                                        o
                                                                                                                              t rid n                                                                                                                                                  Receive statements
                                                                                                                           Ge a tio rd
                                                                                    Set u p s p ec ial cas es                 lic     ca
                                                                                     li st an d in d iv id u al           d up j ob us e s
                                                                                                                             R1       t     t
                                                                                   m em b er ch e ckl i st a n d                 J us kl is
                                                                                                                                     ec
                                                                         l          ren ewal rem i n d e r ki t                   ch
                                                                      ga             ( d u p l ic at ed o n jo b
                                                                   le
                                                               t h s te e
                                                           k wir tru       ys                  c ar n N
                                                                                         B o o k i d )_ / E’ s
                                                        ec             wa                B o o k i n N / E’ s
                                                      Ch et he e al
                                                       w h at ur ire d                                                                   y
                                                            n     qu                  C h ec k au t h o r is ed                      lar
                                                        sig re
                                                                                            s ig n at u re
                                                                                                                                  sa
                                                                                                                                       ile
                                                                                                                                           rs                                                                                                                                         Proposed changes affecting other processes
                                                                                                                            n ew tra
                                                                                       C h eck sc h ed u le             Do ls + ium as
                                                                                               u p d a te                  ve     em        s
                                                                                                                         le + pr ti on 1                                                                                                                                                                                                                Amend ELQ job
                                                                                    C h ec k wh et h er SOR P                     ula       R                                                                                                                                           Add note to CBM
                                                                                                                                lc rt of                                                                                                                                                                                     Ensure docs are            card to ensure
                                                                                        re p o r t re q u i red              ca                                                                                                                                                           job card to
                                                                                                                                  pa                                                                                                                                                                                           recorded on             leaver is pended
                                                                                                                                                                                                                                                                                        update card 270
                                                                                                                                                                                                                                                                                                                                  QH80                   until renewal
                                                                                   C o mp le te sp eci al c ase                                                                                                                                                                            on QH80
                                                                                                                                                                                                                                                                                                                                                          processed
                                                                                                 li st
                                                                                                                                                                                                                                                                                                                                    J
                                                                                      C h e ck if li fe c o ve r                                                                                                                                                                                J




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        24
                                                                                                                                                                                                                                                                                                                                                              J
                                                                                             r eq u i re d
                                                                                         I f ye s, f o l lo w                      er
                                                                                            p ro ced u re                      c ov sk,
                                                                                     ( co u l d b e se p ar at e         lif e te ta
                                                                                                                      ve      ra     R1
                                                                                             p r o ce ss)          Ha    pa lify
                                                                                                                       se mp rd
                                                                                   C h e ck eq u al isa ti o n o f as o si
                                                                                                                       t        b ca
                                                                                         p en s io n a g es                  jo
            Business Capture Centre
              (document scanning)
EXISTING BUSINESS Process Cell designed and implemented

   • 80% reduction in cycle time – 3.5 Hours to 30 Mins.

   • 45% reduction in space usage

   • 50% reduction in travel distance

   • 40% improvement in productivity…

       work previously done by 13.5 staff + o/t now done by 8.
       Improvement is actually much greater as work is finished in
       between 3 and 4 hours…i.e., finished by noon.


                                                                     25
Organising For Success - 5 S




                               After 5 S !   26
           Customer Service Improvement
                Examples: Pensions
                  Backlog: GMP Renew als Cell
                                                                               Reduced
  7000                                                                         backlog
  6000
  5000
  4000
  3000
  2000
  1000
     0
         17.9   24.9   1.10   8.10   15.10 22.10 29.10   5.11                                GMP: Improved
                                                                                             productivity


CT, Information
requests: GPP                                                                                                         29.10
Designer                                                                                                              22.10
                                                                Schemes                                               15.10
                                                                 Issued
                                                                                                                      8.10
                    Old                                                                                               1.10
                   32 Hrs                                                                                             24.9
                                                                                                                      17.9
                                                                          0 5 10 15 20 25 30 35 40 45 50 55 60


                                  New                                                                            27
                                 5.5 hrs
                   Customer Service
                 Improvement Examples
• Contact Centre:
   – Incorrect information reduced from 14% of calls to 1% (reducing
     call-backs by 25-30,000/mo.)
   – Avoidable Calls: Chasing, incorrect routing, clarifying, incorrect
     handoffs, Total: 30,000/mo

• Commissions: Partial agency transfer CT reduced from
  avg of 88 days (max. of 239) to 2-3 days

• New Business Life: Acceptance cycle time reduced from
  avg. of 45 days to 15 days…35% accepted same day




                                                                          28
                                    Customer Service
                                Improvement Examples:
                              Life 70 (db) Suspensions/Day
                   Before

                   350                                 UCL=340.4                       400
                                                                                                                                                          1
                   300                                                                                    1                                                   1
                                                                                                                                                                                                                      UCL=309.0
Individual Value




                                                                                       300
                   250




                                                                    Individual Value
                   200                                 Mean=190.3
                                                                                       200
                   150                                                                                                                                                                                                Mean=168.2

                   100                                                                 100
                                                                                                                                                                                                          222
                                                                                                                                                                                                          22 2
                    50                                 LCL=40.16                                                                                                                                                      LCL=27.35
                                                                                         0
                     0
                                                                    Subgroup                 0               10                    20                30                        40                  50            60
Subgroup                 0      10           20                                                                   4                  4                    4                      4                    4
                                                                                                              0                    00                 0                        00                  00
                                                                             Date_1                     4/
                                                                                                           20                 /2                5/
                                                                                                                                                   20                     /2                6/
                                                                                                                                                                                               2
         Date_1              02/04/2004   20/04/2004                                                  /0                /   04                /0                    /   05                /0
                                                                                                 02                   20                 05                       19                 04




                                                                                                                                                                                                     After
                                                                                                                                                                                                                         29
          The customers are feeling the
                   difference
                                                                               “You are the best
                                                                               area we deal with
“Well done YOU and             “NU are consistently                                 by far”
well done NU. This is             delivering very
 the kind of service          good service compared
  we really value.”            to other high volume
                                     providers”
                                                          “Andrew and his
                                                         team are seriously
                                                           good at admin”


  “I wish more areas of NU had
   you and your teams’ positive
     and commercially aware
            attitude.”                                           “Another example
                                                                    of your team
                                   “Your constant, continual     delivering the wow
                                     and vigorous support               factor”
                                  is very much appreciated.”



                                                                                           30
                          Our people are feeling the
                                 difference
                                                                          “Under the old process each
                                                                          piece of paper travelled 130
  “We don’t have to walk                                                   feet. Now it moves no more
   miles to get a simple                                                    than 10 feet. That’s a huge
answer from Underwriting.                                                          time saving”
They’re now sat next to us”          “Our queues are so much                    BCC Team Leader
      New Business                    lower than the non-Cell
       Administrator                          teams”
                                      New Business Manager




    “These NB Cells have actually
      improved morale as well as                                            “Emulation has helped us turn a
        the process. Admin and                                                 50 minute process into a 50
       Underwriting have a better       “We are running a pilot cell in       second process - automation
     understanding of each others     transfers and you can really see      makes it quicker and generates
    work and it’s no longer a case      the difference it makes to job       less mistakes. That’s good for
       of them and us. We work       satisfaction. We have done a rate           me and the Customer”
             together now”            change today and whilst the old          IPP Pensions Administrator
            NB Underwriter              team are running around like
                                     headless chckens the pilot team is
                                     an oasis of calm, and that’s down
                                             to our new process”
                                          Transfer Team Associate


                                                                                                     31
Conclusion




             32
                    Key Solutions

• We have identified that

   – Most of our processes can be organised around ‘cells’ which
     ensure the handling of work far more efficiently

   – Most of our processes include re-keying of data from one
     legacy system to another which we can eliminate through
     simple use of technology – we call this ‘emulation’

• We can quickly apply cells and emulation to many of
  processes – we do this through ‘mini-lean’


                                                                33
             Cultural Changes

• Gradual shift in cultural emphasis:
     • Internal focus => Customer focus
     • IT systems solutions => Business process solutions
     • “Task” management => Process management
     • Checking for Quality => Process improvement
     • Isolated functions => Teamwork (e.g., Admins. +
       Underwriters)
     • “Can’t be done” => “Can be done”
     • Work force suppressed => Work force expressed
     • Micro-management => Process control


                                                            34
              Key Learnings from 2004
•   Rapid momentum can be created through combining Lean with Six
    Sigma
•   We have built a platform from which we can move forward to really
    change the customer experience
•   The ‘quick wins’ of Lean have tended to dominate
     – At times ‘cost reduction’ has obscured voice of the customer
     – We have found it difficult to gather good data for our dashboards in the rush
       for benefits

•   Common themes such as cells and emulation can be leveraged
•   It is hard work – the only route to success is continued, determined
    leadership


                                                                                  35

								
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