Over 1,000,000 Hard Dollars With Just One Process
In our last communication we briefly touched on where to focus cycle time reduction projects. Instead of talking about the topic at a theoretical level we want to share an actual example:
A mid-size money management firm, in launching an operational efficiency initiative, picked the Automated Client Account Transfer (ACAT) process as their pilot project. This refers to the process used to transfer funds into the firm, be it from a new customer or an existing one. When we initially documented the process - aside from the fact that it was cumbersome and inefficient (over 75 steps, 7 inspection points, 40% reject rate between back office and branch, etc.) - the overall cycle-time averaged 10 days. So from the time the customer requested a fund transfer to the time they firm actually booked said funds, the process took an average of 10 days (with instances as long as 20 days). To resolve this issue we used three key mechanisms:
- Six Sigma principles to baseline and redesign the process
- Imaging technology to reduce cycle time and catch errors at the point of inspection
- Training department to communicate changes and train the front and back office in the new process
The end results were:
- 100% elimination of reject rate
- Reducing number of steps by 75%
- Reducing cycle time by 40%
All this translated to over $1,000,000 in incremental revenue – the money management firm now gets billions of dollars in house faster. Or what people in the sector call Hard Dollars. Hopefully this will serve as a good example of where to focus your cycle time reduction projects.
S. Shaffie ProcessArc, Inc. - Financial Services Six Sigma
