Performance optimization: productivity and quality improvement

Stephane Eyraud seyraud@chappuishalder.com

Clivana Khalil ckhalil@chappuishalder.com

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Chappuis Halder & Cie has managed numerous projects of restructuration and reorganization for leading international companies

Lean & “A Day in Life Of” approaches

Outsourcing & Offshoring

IT Transformation Programs

Efficiency optimization Costs reductionProductivity and quality

improvement

Automating processes

Increase efficiency via tools and

process automation and by

avoiding manual treatments:

Enormous technical

challenges

Requires process streamlining

to take advantage of the new

capabilities

Decreasing compensation costs

Reduce compensation costs by

reallocating staff on a job-by-job or

activity-by-activity basis, however:

Benefit is now eroding rapidly

in the most popular offshoring

centers

De-multiplication of

intermediaries may increase

the risk for error and delay

Minimizing waste and variability

Make processes more accurate,

timely and efficient by improving:

The alignment of operating

teams

The balancing of capacity and

workloads

The transparency of

information flows

Methodology described in the present document

1 2 3

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Combine respective advantages of LEAN top-down approach with DILO bottom-up one to define a customized project

LEAN

Anchored on an innovative mix between holistic and operational theories, our approach enables

us to achieve process optimization and cost reduction both from a global and a detailed

perspectives, while ensuring a high level of implication with the operational teams

LEAN methodology relies mostly on

brainstorming in a top-down fashion

It aims at improving efficiency and productivity

by taking an holistic approach: studying

processes in their entirety rather than focusing

on specific activities or individual functions

Taking this global perspective is particularly

essential within complex, highly sophisticated

processes and environments, not well captured

via operational approaches

DILO

DILO “ A day in Life of” is a bottom up approach

which relies on detailed tasks and process

observation and analysis

Granular analysis is performed task by task and

aims at identifying operational failures or

inefficiencies in order to improve the whole

process

The DILO approach allows us to identify very

accurately optimization opportunities often

neglected in holistic approaches and offers a

true proximity with the operational teams

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The LEAN comprehensive approach to reducing waste and variability has proved to be very efficient in the Financial Services sector

• Better define the data expected and needed by each department to

be efficient

• Define which data is necessary and adapt systems accordingly,

centralize data as much as possible

Data Management

1

Process

optimization

2

Errors reduction

3

Communication

4

Schedule

management

5

Over-production

avoidance

6

Limit down times

7

• Identify the unnecessarily long processes or sequences

• Identify tasks performed twice and correct the process accordingly

• List the most frequent errors and implement new processes to avoid

them

• Mainly, identify operational risks, input mistakes, deficient controls,

inconsistent compliance rules…

• Point out failures in the communication processes

• Propose actions to improve their efficiency, systematically try to

decrease the number of intermediaries

• List the main interruptions in a work day: breaks, meetings, etc.

• Optimize time-schedule to decrease the number of interruptions

(avoid non-stop meetings)

• Avoid multiple and unnecessary reporting

• Perform stickiness assessment

• Identify lack of automation instances

• Decrease validation down times

• For transversal tasks (across several departments), improve work

organization by increasing visibility on each team member’s

activities

• Keep only the essential second level controls

The goals are to reach more accurate,

efficient and less risky processes,

meeting deadlines via:

• Resources allocation optimization

• Just-in-time processes

• Dropping process outcomes

variability

• Increasing information circulation

speed and transparency

• Process redesign

• Errors minimization

Des

cri

pti

on

Ben

efi

ts

A focus on competencies and

expertise underutilization can be

added to the 7 other factors and be

complementary, as it is often a key

issue in FS

The LEAN methodology is structured

around 7 “Mudas”, used as user-

friendly tool to identify the

opportunities of costs reduction and

process optimization

Ad

va

nta

ge

s

5

DILO method focuses on the operational challenges and assesses in detail “field costs”, quality and risks for each process

The quantitative approach is based

on the measurement of the average

time for each task:

Identification of the main

bottlenecks

Identification of under-efficient

areas

This implies spending a day

“shadowing” a person involved the

process being studied

The subject’s activities are observed

and recorded, then analyzed to

identify opportunities

Sampling of a larger number of

people with the same role might be

required in order to assess the

frequency of process breakdown

and to quantify the impact of the

improvement opportunity

The analysis should be conducted

on a normal day (not during a rush

or quiet period)

The qualitative approach is based

on what is observed by the

employees:

Problems observed and

operational constraints identified

Causes of the main failures and

waste

Best practices identified and

appropriate solutions to be

communicated to the other teams

Interviews allow us to:

Describe what activities make up

the process being studied

Understand their precise nature

Identify roadblocks to getting work

done and collect ideas for

improvements

Too often neglected, this phase is

essential as it facilitates

communication on the project,

involves employees and secures

their proactive participation

A quantitative approach

combined with…… a qualitative one

It has proved to be efficient in:

• Avoiding duplication of effort

• Improving inefficient processes

• Identifying non-value adding

activities

• Pointing out frequent and/or

significant communication

breakdowns

• Improving clarity about everyone’s

roles and responsibilities

• Correcting communication

breakdown or barriers

Ben

efi

tsD

es

cri

pti

on

The DILO study is a process analysis

of specific tasks, looking for process

breakdowns and cross-impacts on

other parts of the business

The DILO approach allows real

proximity with the teams, and their

implication and awareness of the

necessary changes. It is an essential

part of the change management

implied by the solutions proposedAd

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6

A global approach to define a customized organizationM

eth

od

olo

gy

To

ols

&

De

live

rab

les

Ishikawa diagram

Brainstorming of the “5 Why” results

KPI/KRI

Workload analysis

Analysis of the causes of all Phase I

malfunctions:

Identification of the main causes

and categorization

Assessment of the impact

Prioritization related to the impact

Arbitrage between re-engineering

and design of new processes

Identification of solutions in terms of:

Process redesign and optimization

Workload rebalancing and

resources reallocation

Enhancement of communication

fluidity and transparency

Improvement in utilization of

competencies and expertise

II – Identification of the

causes of inefficiency and

their impacts

The first step is to define clients

expectations and main objectives

The analysis will then focus on the

following axes:

Identification of low value-adding

tasks

Identification of waste through

process mapping and identification

of redundancies

Identification of defaults in

processes and measurement of

their frequency

Measurement of process variability

Measurement of the workload

Default likelihood analysis: risks

and costs

I – As-is analysis and diagnosis

Voice of the Customer synthesis

“Critical To Quality” Tree

SIPOC

Process flowcharts

Charge analysis

Process variability graphs

Build scenarii from the different

solutions and select optimal target:

Determination of resources

reallocation and definition of the

new organization chart

Stretching of the workload to avoid

time-breakdown during the working

day

Optimization and automation

opportunities for select processes

and suggestions for more value

generating tasks

Actions prioritization, risks

assessment and test of the most

impacting processes changes

New processes documentation and

training of the teams

Estimation of the project benefits

III – Recommendations

proposal and

implementation

Target process mapping

Organization scenarii and new

organization charts

Job description

Roadmap and monitoring plan

Operating procedures and training

material