Presentation is loading. Please wait.

Presentation is loading. Please wait.

Six Sigma Project: Midwest Bank Dr. Ron Lembke Managing for Quality.

Similar presentations


Presentation on theme: "Six Sigma Project: Midwest Bank Dr. Ron Lembke Managing for Quality."— Presentation transcript:

1 Six Sigma Project: Midwest Bank Dr. Ron Lembke Managing for Quality

2 Cash Problems Commercial Processing Department (CPD) Commercial Processing Department (CPD) 4.26 sigma already 4.26 sigma already One error lost $280k last year One error lost $280k last year Project team Project team Project coordinator – from project office Project coordinator – from project office Operations financial manager – financial impact analysis, equipment purchasing Operations financial manager – financial impact analysis, equipment purchasing Assistant VP – subject matter expert from CPD Assistant VP – subject matter expert from CPD Team supervisor – subject matter expert from CPD Team supervisor – subject matter expert from CPD Project coordinator with bank-wide knowledge Project coordinator with bank-wide knowledge CPD project analyst – Six Sigma analyst CPD project analyst – Six Sigma analyst Data integrity, graphical analysis, data stratification Data integrity, graphical analysis, data stratification Champions: Senior VP, VP over CPD Champions: Senior VP, VP over CPD Created problem definition statement Created problem definition statement Responsible for processes involved Responsible for processes involved Week-long six sigma training Week-long six sigma training

3 Define Stage Two largest sources of errors: Two largest sources of errors: Cash Strapping Cash Strapping Deposit processing Deposit processing Don’t affect each other, separate causes for errors Don’t affect each other, separate causes for errors Problem Statement: Problem Statement: 150 internal and external errors, lead to bank losses of $400,000, and significant risk exposure. 150 internal and external errors, lead to bank losses of $400,000, and significant risk exposure. Goal of $0 losses from CDP operations Goal of $0 losses from CDP operations Objective to reduce internal error ratio by 50% and losses by 50% in 12 months. Objective to reduce internal error ratio by 50% and losses by 50% in 12 months. Projects will reduce loss expense, and risk exposure, and increase customer satisfaction Projects will reduce loss expense, and risk exposure, and increase customer satisfaction

4 Project Goals Risk mitigation – difficult to quantify Risk mitigation – difficult to quantify Dollar losses – easy to measure Dollar losses – easy to measure Number of errors – easy to measure Number of errors – easy to measure Approved project launch, moved to Measure stage Approved project launch, moved to Measure stage

5 Measure Stage Agree on CTQs that impact customers Agree on CTQs that impact customers Ys: risk mitigation, error reduction, reducing dollar Ys: risk mitigation, error reduction, reducing dollar Studied workflows, look for root causes Studied workflows, look for root causes Subject Matter experts- “tribal knowledge” Subject Matter experts- “tribal knowledge” XY matrix – Cause & Effect p. 533 XY matrix – Cause & Effect p. 533 Rank factors for potential error causes Xs Rank factors for potential error causes Xs Potential customer outputs Ys Potential customer outputs Ys Rate importance of Y’s 1-10 “Output Rating” Rate importance of Y’s 1-10 “Output Rating” Association Table: Impact of the X’s on each Y: 1-10 Association Table: Impact of the X’s on each Y: 1-10 Rank = 9*9 + 10* *10 Rank = 9*9 + 10* *10

6 Analysis Stage Gathered data to assess impact of Xs on Ys. Gathered data to assess impact of Xs on Ys. 48 hours of team time! 48 hours of team time! Many, many graphs Many, many graphs Indications of problems with manual strapping process (putting bands around money) Indications of problems with manual strapping process (putting bands around money) Tribal knowledge: Insufficient staffing? Tribal knowledge: Insufficient staffing? Look for more longitudinal data Look for more longitudinal data 100 graphs created 100 graphs created Data in single strands Data in single strands Paired interactions Paired interactions

7 Analysis, Continued Correlations between human factors and manual processes Correlations between human factors and manual processes Many manual steps in handling cash Many manual steps in handling cash cash strapping errors per year cash strapping errors per year Deposits –larger dollar loss per manual error Deposits –larger dollar loss per manual error Concerned about # errors, not size Concerned about # errors, not size

8 Failure Modes and Effects Analysis Laid out steps from process map Laid out steps from process map Concentrated on inputs Concentrated on inputs Figure out effects of each possible error Figure out effects of each possible error Each process step ranked on Risk Product Number(RPN) : Each process step ranked on Risk Product Number(RPN) : SEV - Severity of error SEV - Severity of error OCC - Occurrence – how often OCC - Occurrence – how often DET - Detection – how likely to figure out DET - Detection – how likely to figure out SEV*OCC*DET SEV*OCC*DET Know what we have to look at Know what we have to look at

9 Improve Phase Countermeasures – how to fix? Countermeasures – how to fix? Countermeasures Tree Countermeasures Tree For each problem, find root causes For each problem, find root causes Each root cause, list countermeasures Each root cause, list countermeasures Practical ways to implement coutermeasures Practical ways to implement coutermeasures Effectiveness x Feasibility (1to 5 scale) Effectiveness x Feasibility (1to 5 scale)

10 Five Major Countermeasures Cash strapping machine Cash strapping machine $5 charge for clients with incorrect deposits $5 charge for clients with incorrect deposits Benchmarking – will customers accept? Benchmarking – will customers accept? Eliminate double keying of deposits Eliminate double keying of deposits Vacation schedules to reduce errors by subs Vacation schedules to reduce errors by subs Dollar loss corrective actions Dollar loss corrective actions

11 Control Phase Implementation left to subject matter experts Implementation left to subject matter experts Minor suggestions implemented immediately Minor suggestions implemented immediately Pilot study Pilot study $5 charge reduced errors 44% by corporate clients $5 charge reduced errors 44% by corporate clients $280,000 loss was from an incorrect deposit $280,000 loss was from an incorrect deposit Dollar loss corrective action hardest to impelement Dollar loss corrective action hardest to impelement Overall errors down 30% Overall errors down 30% Dollar losses down 57% Dollar losses down 57%


Download ppt "Six Sigma Project: Midwest Bank Dr. Ron Lembke Managing for Quality."

Similar presentations


Ads by Google