Case Study: Cost Reduction

Background

cost reduction case study mike fletcher

An international bank’s loans were processed by a variety of separate departments across each region, but there was no activity based costing to properly measure the profitability of each loan.

Challenge

There was a lack of understanding of how the different activities involved in processing loans were to interact with one another.  Further, there was lots of waste due to poor quality of handovers and rework to correct errors.  The processing of loans was not managed by a workflow tool, and no management information was available to understand the effort required to create and manage each loan.  The lack of visibility of the flow of activities prohibited proper resource planning.

Solutions

Mike led a project to initially map all the business processes involved in the processing of loans, together with the system architecture, from inception of a loan to its administration based on interviews with relevant stakeholders and observing activities of those involved across the process.  He was then able to standardise business processes across all the regions, identify inefficiencies and reduce the amount of rework.

The next phase was to overlay a workflow tool to capture the relevant management information regarding processing activities.  This then informed the forecasting of required resources to process anticipated volumes which were forecast.

Benefits

The net result was that surplus resources could be identified, and redeployed to other value-enhancing activities or removed.

Case Study: Mike Fletcher (Click here to see Mike profile)