6 Ways to Cut Back Office Costs – Tips from LEAN Manufacturing
Manufacturers like Toyota, Ford, Motorola and others have spent years perfecting lean processes. By removing all non-value add activities and focusing on customer value, they have been able to increase financial gains and minimize expense. The concept is simple: by using the minimum amount of resources – people, materials, and capital – they produce solutions and deliver them on time to customers. This focus on outcome rather than process eliminates getting bogged down in paper-work, records management, and error correction.
Unfortunately, many business offices focus on process, assuming that having a robust process in place will ensure the best outcome for their customers. While it is true that all “I’s” must be dotted and “t’s” must be crossed, legalities must be met, invoices must be paid, and so on…most businesses find that by focusing on an improved customer experience, regardless of the industry, a faster, more economical process follows.
LEAN Made a Difference for this Company
Case in point: The company that we wrote about a few blog posts ago that generated renewal notice letters to their customers electronically, printed two copies onto paper, mailed one copy to the customer and sent the second copy to another service location, where it was scanned into a separate electronic system. The return letter from the customer to the company was just as cumbersome… requiring data input, more paper and more scanning in order to update both the internal system and the company records.
Not only was the process time-consuming and people-dependent, customer service was often below par, with papers getting lost, records slow to be updated, as well as renewals and payments not always posted. Here’s how this company improved customer service, cut costs and reduced errors:
1. Realizing the need for a single source of current customer status, they established and now maintain a single, central source that ensures that the most current version of data is available to customers and employees via secure permission-based log-in. ImageSilo® was chosen as the “go-to” solution for maintaining document and process integraty. Paper Alternative Solutions was chosen to provide the ongoing external mailroom operation as well as implementation of ImageSilo®.
2. By automating the entire process, they were able to increase speed, maximize data retrieval and reduce error. While legalities required the customer copy to be mailed, everything else in the process could be done electronically with a workflow-enabled document management system and external mail room that eliminated the need for employees to handle paper.
3. Next, they found the back-office bottle necks and focused on solutions to eliminate them. While going from electronic letters to paper and then scanning back into a separate electronic system, got the job done, it also created a huge back-office bottleneck that cost both time and money, increased the need for staff, and contributed to disgruntled customers.
4. First, they made sure that they clearly understood their customer needs so that they could optimize the business processes to deliver a better customer experience. A customer survey told this company where they were falling short, and gave them the motivation to make the necessary changes in order to avoid customer loss.
5. By replacing back-end human check points and quality assurance check lists with fool-proof processes, they eliminated the root cause of errors. Workflow automation increases efficiency and reduces human error. it also enables reduction of staff and cost savings
6. Finally, realizing the importance of their lean strategy and the importance of their customer relations, they tied the implementation of the appropriate business processes to aggressive completion of goals and strategies.
Lean Six Sigma and Back Office Processes
Lean Six Sigma methodology can be successfully used to improve the ways that information flows into, through, and out of any organization. By defining, measuring, analyzing, improving, and controling your processes you will save money and improve efficiency.