1st Edition

Lean for Banks Improving Quality, Productivity, and Morale in Financial Offices

By Bohdan W. Oppenheim, Marek Felbur Copyright 2015
    239 Pages 6 Color & 16 B/W Illustrations
    by Productivity Press

    240 Pages
    by Productivity Press

    Most banking institutions suffer from numerous inefficiencies, such as poor planning; inadequate coordination and communication; ineffective processes, tools, and workflow; and excessive bureaucracy. Lean for Banks describes in easy language how to use Lean and Six Sigma management practices to significantly improve the efficiency of bank operations.

    This book shows how to use Lean and Six Sigma management practices to improve the normal daily work in a bank, typically executed in the so-called "back offices." This work involves about 90 percent of bank employees and generates 90 percent of costs. Lean for Banks explains how to organize bank operations better, increase work productivity and quality by working smarter and not harder, make fewer mistakes and decrease rework, and elevate jobs from mundane and repetitive to creative and pleasantly challenging. Most importantly, it shows how to increase the satisfaction of bank customers and in turn enhance bank competitiveness and market share.

    Lean for Banks is intended for all levels of bank employees: back-office workers, first-level supervisors, middle- and higher-level managers, and corporate executives. It is also intended for all levels of students at schools that teach banking skills—short courses intended for tellers, college courses in advanced banking operations, and continuing education for bank managers and line employees. This book is an entry-level text on Lean and should give readers enough understanding to prepare them for active participation in Lean deployment activities.


    Banking Activities Addressed in This Book
    Intended Audience
    Organization of the Book

    Ideal versus Traditional Bank
    Ideal Bank
    Dysfunctional Bank
    Lean Challenge for a Real Bank

    The Amazing History of Lean
    Do Not Displace Good Old Knowledge with New; Integrate It
    A Bit of History: from TQM to Concurrent Engineering, Six Sigma, and Lean
    Total Quality Management (TQM)
    Concurrent Engineering (CE)
    Six Sigma
    Management by Objectives
    ISO 9000
    Relationship of Lean to Other Improvement Strategies
    Evolution of Lean to Other Industries
    Literature on Lean Banking
    Recommended Lean Resources
    Lean Enterprise Institute
    Lean in Healthcare
    Lean Advancement Initiative and EdNet Lean AcademyTM
    Toyota Production System (TPS)
    The Toyota Way
    Lean Enablers for Banking and Lean Product Development Flow (LPDF)

    Critical Lean Concepts: Value, Eight Wastes, and Six Lean Principles
    Customer and Value
    Stakeholders and Value
    Waste of Waiting
    Waste of Defects and Rework
    Waste of Overproduction of Information
    Waste of Unnecessary Movement of People
    Waste of Unnecessary Movement of Information
    Waste of Overprocessing of Information
    Waste of Inventory of Information
    Wastes of Talent and Enthusiasm
    Muda, Mura, Muri, and Hejinka
    Lean Principles
    Principle 1: Value
    Principle 2: Mapping Value Stream
    Principle 3: Flow
    Principle 4: Pull
    Principle 5: Perfection
    Principle 6: Respect for People
    Lean Applies to One-Off Projects Equally Well as to Repetitive Work
    Symphony of Lean Principles

    Tools of Lean
    6S Method: Orderliness, Security, and Safety
    Seiton (Plan Office and Computer Spaces)
    Seiri (Sort)
    Seiso (Sweep and Clean)
    Seiketsu (Standardize)
    Shitsuke (Discipline)
    Safety and Security
    Quality Assurance
    Continuous Improvement
    Bottom-Up Improvements Suggested by Individual Employees
    Kaizen Blitz: Quick Improvements by a Small Team of Stakeholders
    Six Sigma for Large Formal Projects
    Other Improvement Methods: Brief Review
    Work Standardization, Procedures and Checklists
    Kanban: Simple "I Need" Signal
    Visual Controls
    Tracking Quality, Process Time, and Other Numerical Trends
    Task or Process Status Board
    Skill Set Monitoring Board
    Single-Piece Flow
    Work Cells and Working to Common Takt Time
    Poka Yoke and Error Proofing
    Gemba: Walking to See Work
    Database of Lessons Learned and Risks
    Communities of Practice
    A3 Form

    Deploying Lean
    Beginning Implementation with 6S
    Initial Lean Training
    Elimination of Destructive Myths
    Team Effort
    Culture Change and Management Support
    Determining Values and Identifying Customers
    Lean Deployment
    Hoshin Kanri for Sustaining Lean Energy
    Learning from Experiences of Others
    Lean Metrics
    Scientific Approach
    Lean Deployment: Closing Thoughts

    Lean Enablers for Banks
    Success of Lean Enablers Project
    Applicability to Banking Operations
    Lean Enablers Designed for Banks

    Lean Product Development Flow (LPDF)
    Lean Manufacturing: A Useful Refresher
    Overview of LPDF
    Integrative Events
    Devising Project Schedule
    Mapping Value Streams
    Mapping Current State
    Mapping Future State
    Parsing Future State Map into Takt Periods
    Project Leadership and Management
    Project Room
    Closing Remarks

    Abbreviations and Acronyms
    Idioms, Colloquialisms, and Foreign Expressions

    About the Authors


    Bohdan W. Oppenheim, PhD has been a professor of systems engineering at Loyola Marymount University in Los Angeles since 1983. He is a recognized global leader in Lean systems engineering and author of an influential book titled Lean for Systems Engineering with Lean Enablers for Systems Engineering. Dr. Oppenheim co-led a team of 15 experts supported by a community of 150 practitioners to develop the best Lean-inspired practices for managing complex engineering programs. For this work he received the Shingo Award, the highest honor in the field of operational excellence, INCOSE‘s Best Product Award, and two smaller awards. This work was later expanded into a joint project of the Project Management Institute (PMI), International Council on Systems Engineering (INCOSE) led by a team based at Massachusetts Institute of Technology on which Oppenheim served as key contributor. The result was a second book on Lean-inspired best practices for managing engineering programs, The Guide to Lean Enablers for Managing Engineering Programs for which the team was honored with a Shingo Award (the second for Oppenheim). Dr. Oppenheim is the founder and co-leader of the INCOSE Lean Systems Engineering Working Group, the organization‘s largest working group involving more than 200 members. He also directed Loyola Marymount University‘s US Department of Energy Industrial Assessment Center. In this capacity, he advised 125 Southern California companies of all sizes and types on Lean productivity matters. With S. Rubin, Dr. Oppenheim designed Aerospace Corporation‘s POGO simulator for liquid rockets used by NASA and private industry. He consulted for Northrop-Grumman, Boeing, Airbus, EADS, Telekomunikacja Polska, Mars, Medtronics, the US Coast Guard and the US Air Force, Thales, TRW, and 50 other firms and governmental institutions in the United States and Europe. Dr. Oppenheim is or was a member of INCOSE, LAI EdNet,

    "Lean for Banks is extremely thorough and authoritative in its summary of what Lean is and why it matters today. Moreover, it draws from convincing material to apply Lean to the banking industry. On top of that, the writers have some fun with the material."
    — John Shook, CEO, Lean Enterprise Institute, Cambridge, MA.

    "Lean for Banks is an operating model we all dream of in this period of regulatory tsunami. This book is a great help in implementing a high quality approach toward the permanent improvement of bank procedures and processes. It is a must for the traditional ‘heavy’ banking sector in order to survive growing competition. Blind cost cutting has only limited impact on a bank's performance in the long run. Lean can increase long-term competitiveness. I recommend this book to all managers restructuring banks as a source of Lean tools and methodology."
    — Dr. hab. Krzysztof Kalicki, President and CEO, Deutsche Bank Polska S.A.

    "During the crisis many banks were forced to restructure their operations in order to improve efficiency and reduce costs at the same time. Cost cutting gives quick results but does not always solve the problem of quality and performance in the longer perspective. This book shows how Lean Thinking and the Six Sigma paradigm can help to smartly improve bank operations and create additional value for the organization, employees and shareholders."
    — Li Xiaobo, General Manager of Industrial and Commercial Bank of China (ICBC), Europe, S.A.