Succeeding with Six Sigma and Lean in a Transactional and Services Environment

Succeeding with Six Sigma and Lean in a Transactional and Services Environment

James Illing, VP, MBBBank of AmericaCustomer Service and Support

WCBF Lean Six Sigma Conference Dallas, TX Dec 2-3, 2004

Bank of America Vision

Jacksonville

Las Vegas

Tempe

Rio Rancho

MorgantownRichmond

Tampa

Fresno

Concord

Irving/ Dallas

Tri-Cities

Seattle

Charlotte

Dover

Norfolk

Brea

Spokane

NW RegionSeattle: NWC, PRC, NDSSpokane: CCMTri-Cities: NWC

Atlantic RegionDover: “Morgantown: MC

Norfolk: “Richmond: MC

California Region

Brea: CM, CAC, DFS, , RSS, (SG)Concord: CAC , EBS, , Fresno: CAC, , (SG)Glendale: CAC, PRC, , RSS, NDS, SB , (SG)Pasadena: “, PRC Central Region

Las Vegas: MC

Phoenix: “Rio Rancho: MCTempe: PRC

EBSConcord: EBSIrving: EBSJacksonville: EBS

Florida RegionTampa: MC, RSS, SB (SG)Jacksonville: CM, DFS, EBS, PRC, (SG)

Charlotte: SB

LEGEND

CAC California ConsumerCM CommercialCCM Commercial Card/Merchant Svc

“ Consumer CardDFS Dealer Financial ServicesEBS Electronic Banking ServicesMC Model ConsumerNDS National Direct SalesNWC Northwest Consumer

PlusPRC Premier Relationship Center

PrimeRSS Resolution Services & SupportSB Small Business(SG) Specialty Gate/TDD

LEGEND

CAC California ConsumerCM CommercialCCM Commercial Card/Merchant Svc

“ Consumer CardDFS Dealer Financial ServicesEBS Electronic Banking ServicesMC Model ConsumerNDS National Direct SalesNWC Northwest Consumer

PlusPRC Premier Relationship Center

PrimeRSS Resolution Services & SupportSB Small Business(SG) Specialty Gate/TDD

Glendale

Phoenix

Houston

San Francisco

San Antonio

Wichita

Kansas CitySt. Louis

Atlanta

Baltimore

LincolnBethlehem

ScrantonManhattan

UticaDorchester

Former FleetCard Sites

Colorado SpringsHorsham

Newark

Former FleetTelephone Banking Sites

Colorado Springs

Utica

Scranton

Dorchester

Lincoln

Manhattan

Customer Service and Support

Resolution Services

Both

Customer Service and Support

Resolution Services

Both

NewarkHorsham

Bethlehem

Pasadena

Los Angeles

Customer Service and Support (CS&S)

Note: Map shows locations of CS&S Contact Centers only

2005 PrioritiesTo Delight our Customers we must:1.1 Deliver the basics consistently, through

improved tools and processes 1.2 Drive an integrated and personalized cross-

channel customer experience1.3 Drive service excellence through error free execution 1.4 Gather, analyze and disseminate customer information for business partners to drive

product and process improvements1.5 Differentiate service for targeted segments

To Delight our Associates we must:2.1 Build, invest in and retain a high performing,

diverse associate team2.4 Operationalize the Bank of America Spirit and

create an inclusive environment 2.5 Define the contact center environment of the

future

To Delight our Shareholders we must:3.1 Deliver customer solutions to targeted

segments3.2 Optimize our cost to serve3.3 Leverage core competencies to expand value

and business scope through increased revenue and economies of scale

Annualized Statistics:Customer Calls Handled by VRU in 2003 ……554,900,000

Customer Calls Handled by Associates in 2003

..…..122,700,000

E-mails Received in 2003 …….3,674,000

E-mails Processed in 2003……3,673,000

2003 Q&P Projects Benefit.…..$43million

CS&S Facts and Priorities

• 4 times more likely to recommend Bank of America

• 3 times more likely to expand his or her relationship with Bank of America

• 20% less likely to move all of his or her business from Bank of America

A Delighted Customer is:

27%

Delighted9-10

Satisfied6-8

LeastSatisfied

1-5

Likely to recommend Bank of America

Likely to open a new account

Likely to move an account elsewhere

4X difference

3X difference

20% reduction

27%

Delighted9-10

Satisfied6-8

LeastSatisfied

1-5

Likely to recommend Bank of America

Likely to open a new account

Likely to move an account elsewhere

4X difference

3X difference

20% reduction

0%

10%

20%

30%

40%

50%

1 2 3 4 5 6 7 8 9 10

Extremely SatisfiedNot at all Satisfied

Delighted(9-10)

“Top 2 Box”

0%

10%

20%

30%

40%

50%

1 2 3 4 5 6 7 8 9 10

Extremely SatisfiedNot at all Satisfied

Delighted(9-10)

“Top 2 Box”

The only question that matters: “Considering all the business you do with Bank of America, what is your overall satisfaction with Bank of America?”

Six Sigma is Top Down at Bank of America

"Six Sigma will enable Bank of America to make the breakthrough improvements in customer satisfaction and shareholder value that we must achieve to reach our goal of becoming the world's most admired company. That's why I'm committed to using it as a performance management discipline throughout our company."

Ken Lewis, CEO

Six Sigma, Lean, DFSS

Strategy Deployment with Hoshin KanriStrategy Deployment with Hoshin Kanri

Page 1The “What”

Page 3“Balanced Scorecard”

3. Set 3-5 Year Breakthrough Strategies

1. Establish Vision / Mission/ Overarching Goals

6. Establish Goals to Benchmark

2. Scan External Environment and Internal Performance

(SWOT)

4. Identify Performance Metrics

Bank of America Performance Plan Measures

2002 Milestones 2001 2002

METRIC Performance Goal Q1 Q2 Q3 Q4 Benchmark Source

Customer

Key Processes Sigma level - Deposits - Payments - Problem Resolution

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

% Very Satisfied - Consumer/Comm/AMG - GCIB Issuer - GCIB Investor (rank)

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

RNI Per Relationship ($) - Consumer/Comm/AMG - GCIB (rev/strategic issuer

client)

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

# Products Per Relationship - Consumer/Comm/AMG

TBD

TBD

TBD

TBD

TBD

TBD

TBD

TBD

% Market Penet (target mkts) - Consumer - Premier - Small Business - Commercial - Private - GCIB Issuer - GCIB Investor

TBD TBD TBD TBD TBD TBD TBD








% Lead Bank Penet (target mkts) Commercial

TBD

TBD

TBD

TBD

TBD

TBD

TBD

TBD

# Cust/Client Relationships - Consumer/Comm/AMG

TBD

TBD

TBD

TBD

TBD

TBD

TBD

TBD

Concentration Limits (#) TBD TBD TBD TBD TBD TBD TBD TBD

Associate % Very Satisfied TBD TBD TBD TBD TBD TBD TBD TBD

% positive responses for: - Performance mgmt. - Training - Diversity

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

% Turnover – Total TBD TBD TBD TBD TBD TBD TBD TBD

# Training Hours Completed (per associate per year)

TBD TBD TBD TBD TBD TBD TBD TBD

% Minority / Women in Band 1-3 positions


Shareholder Total Shareholder Return (Rank in Peer Group)


Change in SVA ($) TBD TBD TBD TBD TBD TBD TBD TBD

EPS ($ / % growth) TBD TBD TBD TBD TBD TBD TBD TBD

Revenue Growth (%) TBD TBD TBD TBD TBD TBD TBD TBD

Trading Rev. Stability (%) TBD TBD TBD TBD TBD TBD TBD TBD NII Sensitivity ($) - Rising - Declining

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

Credit Loss Stability (bp/qtr) TBD TBD TBD TBD TBD TBD TBD TBD

Operational Risk Stability TBD TBD TBD TBD TBD TBD TBD TBD Capital Adequacy (%) (Tier 1)


Productivity ($) - Efficiency Ratio

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

Bank of America Performance Plan Measures

2002 Milestones 2001 2002

METRIC Performance Goal Q1 Q2 Q3 Q4 Benchmark Source

Customer

Key Processes Sigma level - Deposits - Payments - Problem Resolution

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

% Very Satisfied - Consumer/Comm/AMG - GCIB Issuer - GCIB Investor (rank)

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

RNI Per Relationship ($) - Consumer/Comm/AMG - GCIB (rev/strategic issuer

client)

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

# Products Per Relationship - Consumer/Comm/AMG

TBD

TBD

TBD

TBD

TBD

TBD

TBD

TBD

% Market Penet (target mkts) - Consumer - Premier - Small Business - Commercial - Private - GCIB Issuer - GCIB Investor









% Lead Bank Penet (target mkts) Commercial

TBD

TBD

TBD

TBD

TBD

TBD

TBD

TBD

# Cust/Client Relationships - Consumer/Comm/AMG

TBD

TBD

TBD

TBD

TBD

TBD

TBD

TBD

Concentration Limits (#) TBD TBD TBD TBD TBD TBD TBD TBD

Associate % Very Satisfied TBD TBD TBD TBD TBD TBD TBD TBD

% positive responses for: - Performance mgmt. - Training - Diversity

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

TBD TBD TBD

% Turnover – Total TBD TBD TBD TBD TBD TBD TBD TBD

# Training Hours Completed (per associate per year)


% Minority / Women in Band 1-3 positions


Shareholder Total Shareholder Return (Rank in Peer Group)


Change in SVA ($) TBD TBD TBD TBD TBD TBD TBD TBD

EPS ($ / % growth) TBD TBD TBD TBD TBD TBD TBD TBD

Revenue Growth (%) TBD TBD TBD TBD TBD TBD TBD TBD

Trading Rev. Stability (%) TBD TBD TBD TBD TBD TBD TBD TBD NII Sensitivity ($) - Rising - Declining

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

Credit Loss Stability (bp/qtr) TBD TBD TBD TBD TBD TBD TBD TBD

Operational Risk Stability TBD TBD TBD TBD TBD TBD TBD TBD Capital Adequacy (%) (Tier 1)


Productivity ($) - Efficiency Ratio

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

TBD TBD

1

Bank of America

Ken Lewis, Chairman and CEO

“Be Recognized As One of the World’s Most AdmiredCompanies”

Breakthrough Strategies

Provider of Choice92% Customer Satisfaction

Employer of Choice90% Associate Satisfaction

Investment of ChoiceFirst in Peer Group

Total Shareholder Return

1.1 Provide a world-class customer/client experiencethrough easy access and efficient, error-free service

C. Goslee / B. Desoer1.2 Attract and retain profitable customers/clients…and

continuously reward them for keeping and bringing moreof their business to us G. Taylor / R. DeMartini / B. Desoer

E. Brown1.1 Become the trusted advisor for financial solutions

R. DeMartini / E. Brown1.4 Develop and deliver innovative new products and

solutions which make financial services work in ways itnever has before B. Desoer / E. Brown

VISION

GOALS

ASSOCIATE

SHAREHOLDER

CUSTOMER

2.1 Attract and retain a world-class work forceS. Alphin

2.2 Define and align Associate roles, measures and rewardsto our strategy S. Alphin

2.3 Provide the support and tools Associates need to excelB. Desoer

2.4 Enable Associates to achieve professional growthbalanced with personal goals B. Desoer

2.5 Reflect in our work force the diversity of the communitiesand customers we serve S. Alphin

3.1 Double Shareholder Value Add (SVA) in the next 3 yearsJ. Hance

3.2 Consistently achieve double-digit year-over-year (EPS)growth J. Hance

3.3 Consistently achieve annual revenue growth targetsJ. Hance3.4 Substantially reduce volatility of market, credit and

operational lossesB. Vandiver

3.5 Dramatically reduce the complexity of our business andachieve double-digit productivity each year

C. Goslee / T. Arnoult1

Bank of America




Provider of Choice92% Customer Satisfaction

Employer of Choice90% Associate Satisfaction









VISION

GOALS

ASSOCIATE

SHAREHOLDER

CUSTOMER











C. Goslee / T. Arnoult1

Bank of America




Provider of Choice92% Customer SatisfactionProvider of Choice

92% Customer Satisfaction

Employer of Choice90% Associate SatisfactionEmployer of Choice90% Associate Satisfaction











VISION

GOALS

ASSOCIATE

SHAREHOLDER

CUSTOMER











C. Goslee / T. Arnoult

5. Identify Baseline and Benchmark Performance

• Vision/Mission/Overarching Goals

• 3-5 Year Breakthrough Strategies

• 12 Month Tactical Plan• Key Performance Metrics

Page 2The “How”

8. Develop 12 Month Tactical Plan

2002 Performance Plan Metric1.1 Provide a world-class customer/client experience through easy access and efficient, error-free service

1.1.1 Drive Six Sigma & re-engineering across priority processes to address customer experience gaps and achieve breakthrough quality and productivity improvements1.1.2 Develop and deliver the appropriate enablers (people/process/technology) to make the customer

experience come alive in a sustainable and differentiated way1.1.3 Implement a world-class problem resolution process

1.2 Attract and retain profitable customers/clients…and continuously reward them for keeping andbringing more of their business to us1.2.1 Establish and implement a disciplined customer/client continuum (selection/acquisition/service) process matched to individual customer group strategies…Align customers/clients with the right level and proactively up-tier them consistent with their needs1.2.2 Focus resources on a narrower set of corporate issuer clients where we can build a leading market

position and significantly increase emphasis and penetration of institutional investor clients1.2.3 Create value propositions by customer segment while ensuring profit for the bank1.2.4 Establish a meaningful loyalty program that allows customers/clients to choose from a variety of rewards1.2.5 Create an automated product aggregation capability that enables customers to bundle solutions in a way that creates value for them1.2.6 Create a distribution system with sufficient scale to cover the franchise and meet customer/client needs

1.3 Become the trusted advisor for financial solutions 1.3.1 Design and implement an industry leading financial advice process, tool-set, and associate competencies by customer segment1.3.2 Launch the brand building activities required to be recognized as a world-class investment provider1.3.3 Design & implement the relationship management process across customer segments1.3.4 Respond to our customer/client needs as they evolve (eg: insurance & retirement services capabilities)1.3.5 Increase the size and margin of advisory, capital raising, and risk management activities, while

significantly reducing the corporate loans held on our balance sheet1.4 Develop and deliver innovative new products and solutions which make financial services work in

ways it never has before1.4.1 Develop and implement a breakthrough product development process1.4.2 Develop a strategy for non-proprietary offerings1.4.3 Preserve and expand the bank's position in the payments/funds transfer process

1.1 Key Processes Sigma level% Very Satisfied

1.2 Relationship Net Income ($RNI)# Products Per RelationshipMarket Penetration (%)# Customer/Client RelationshipsConcentration Limits (#)

1.3 Relationship Net Income ($RNI)Market Penetration (%)


2.1 Attract and retain a world-class work force2.1.1 Implement Associate satisfaction surveys and address the most important issues2.1.2 Adopt a world-class internal & external selection/recruitment/staffing process2.1.3 Create a 6 month assimilation plan for new Associates2.1.4 Develop a world-class recognition & compensation program

2.2 Define and align Associate roles, measures & rewards to our strategy2.2.1 Define roles and complete performance management plans for all Associates, aligned to the corporate strategy and to the supporting business unit performance plans2.2.2 Align performance measures & incentives to re-enforce desired Associate behaviors2.2.3 Require non-customer facing Associates to experience direct customer/client input on a quarterly basis2.2.4 Implement success profiles for all positions

2.3 Provide the support and tools Associates need to excel2.3.1 Ensure learning & development opportunities to maximize current Associate performance & future potential…Develop and implement an effective coaching program2.3.2 Provide training to improve Associate capabilities in critical skills (relationship building, client management, quality tools & processes, scorecard drivers--SVA)….web-enable priority technical tools2.3.3 Complete all improvements required to achieve a world-class talent planning process

2.4 Enable Associates to achieve professional growth balanced with personal goals2.4.1 Develop and deliver a process & strategy to support career development2.4.2 Ensure Associates are aware of all benefits offered to them2.4.3 Provide our Associates the best value in financial services2.4.4 Develop comprehensive mentoring/networking programs

2.5 Reflect the diversity of the communities and customers we serve in our work force2.5.1 Attract, retain and develop associates with diverse skills and experiences2.5.2 Determine and achieve diversity targets by band level

2.1 % Very Satisfied% Positive responses for:

- Performance Plans- Training- Diversity

% Turnover – Total

2.2 % Positive responses forPerformance Management

2.3 # Training Hours Completed


2.5 % Minority / Women in Band 1-3positions

3.1 Double Shareholder Value Add (SVA) in the next 3 years3.1.1 Implement Breakthrough (Hoshin) Strategic Planning company-wide…achieve results on 1.1-2.5 above3.1.2 Strengthen compensation linkages to SVA3.1.3 Re-allocate resources and capital to high SVA growth businesses3.1.4 Modify pricing & profitability tools to include SVA generated at the customer/client level

3.2 Consistently achieve double-digit Y-O-Y EPS growth3.2.1 Achieve results on 1.1-3.1 above3.2.2 Establish disciplined pricing/return hurdles at relationship level, inspect results & remedy as appropriate

3.3 Consistently achieve annual revenue growth targets

3.0 Total Shareholder Return (Rankin Peer Group)

3.1 Change in SVA ($)

3.2 EPS ($ / % growth)

3.3 Revenue Growth (%)

2002 Performance Plan Metric1.1 Provide a world-class customer/client experience through easy access and efficient, error-free service

1.1.1 Drive Six Sigma & re-engineering across priority processes to address customer experience gaps and achieve breakthrough quality and productivity improvements1.1.2 Develop and deliver the appropriate enablers (people/process/technology) to make the customer

experience come alive in a sustainable and differentiated way1.1.3 Implement a world-class problem resolution process

1.2 Attract and retain profitable customers/clients…and continuously reward them for keeping andbringing more of their business to us1.2.1 Establish and implement a disciplined customer/client continuum (selection/acquisition/service) process matched to individual customer group strategies…Align customers/clients with the right level and proactively up-tier them consistent with their needs1.2.2 Focus resources on a narrower set of corporate issuer clients where we can build a leading market

position and significantly increase emphasis and penetration of institutional investor clients1.2.3 Create value propositions by customer segment while ensuring profit for the bank1.2.4 Establish a meaningful loyalty program that allows customers/clients to choose from a variety of rewards1.2.5 Create an automated product aggregation capability that enables customers to bundle solutions in a way that creates value for them1.2.6 Create a distribution system with sufficient scale to cover the franchise and meet customer/client needs

1.3 Become the trusted advisor for financial solutions 1.3.1 Design and implement an industry leading financial advice process, tool-set, and associate competencies by customer segment1.3.2 Launch the brand building activities required to be recognized as a world-class investment provider1.3.3 Design & implement the relationship management process across customer segments1.3.4 Respond to our customer/client needs as they evolve (eg: insurance & retirement services capabilities)1.3.5 Increase the size and margin of advisory, capital raising, and risk management activities, while

significantly reducing the corporate loans held on our balance sheet1.4 Develop and deliver innovative new products and solutions which make financial services work in

ways it never has before1.4.1 Develop and implement a breakthrough product development process1.4.2 Develop a strategy for non-proprietary offerings1.4.3 Preserve and expand the bank's position in the payments/funds transfer process

1.1 Key Processes Sigma level% Very Satisfied

1.2 Relationship Net Income ($RNI)# Products Per RelationshipMarket Penetration (%)# Customer/Client RelationshipsConcentration Limits (#)



2.1 Attract and retain a world-class work force2.1.1 Implement Associate satisfaction surveys and address the most important issues2.1.2 Adopt a world-class internal & external selection/recruitment/staffing process2.1.3 Create a 6 month assimilation plan for new Associates2.1.4 Develop a world-class recognition & compensation program

2.2 Define and align Associate roles, measures & rewards to our strategy2.2.1 Define roles and complete performance management plans for all Associates, aligned to the corporate strategy and to the supporting business unit performance plans2.2.2 Align performance measures & incentives to re-enforce desired Associate behaviors2.2.3 Require non-customer facing Associates to experience direct customer/client input on a quarterly basis2.2.4 Implement success profiles for all positions

2.3 Provide the support and tools Associates need to excel2.3.1 Ensure learning & development opportunities to maximize current Associate performance & future potential…Develop and implement an effective coaching program2.3.2 Provide training to improve Associate capabilities in critical skills (relationship building, client management, quality tools & processes, scorecard drivers--SVA)….web-enable priority technical tools2.3.3 Complete all improvements required to achieve a world-class talent planning process

2.4 Enable Associates to achieve professional growth balanced with personal goals2.4.1 Develop and deliver a process & strategy to support career development2.4.2 Ensure Associates are aware of all benefits offered to them2.4.3 Provide our Associates the best value in financial services2.4.4 Develop comprehensive mentoring/networking programs

2.5 Reflect the diversity of the communities and customers we serve in our work force2.5.1 Attract, retain and develop associates with diverse skills and experiences2.5.2 Determine and achieve diversity targets by band level

2.1 % Very Satisfied% Positive responses for:

- Performance Plans- Training- Diversity

% Turnover – Total


2.3 # Training Hours Completed


2.5 % Minority / Women in Band 1-3positions

3.1 Double Shareholder Value Add (SVA) in the next 3 years3.1.1 Implement Breakthrough (Hoshin) Strategic Planning company-wide…achieve results on 1.1-2.5 above3.1.2 Strengthen compensation linkages to SVA3.1.3 Re-allocate resources and capital to high SVA growth businesses3.1.4 Modify pricing & profitability tools to include SVA generated at the customer/client level

3.2 Consistently achieve double-digit Y-O-Y EPS growth3.2.1 Achieve results on 1.1-3.1 above3.2.2 Establish disciplined pricing/return hurdles at relationship level, inspect results & remedy as appropriate

3.3 Consistently achieve annual revenue growth targets

3.0 Total Shareholder Return (Rankin Peer Group)

3.1 Change in SVA ($)

3.2 EPS ($ / % growth)

3.3 Revenue Growth (%)

7. Use MBF to Develop Gap Closure

Countermeasures

• Baseline & Benchmark Results• Goals to Benchmark• Results to Goals

Hoshin Plan: Three Page Top-down Guidance & Framework

to receipt and 20 days DSO contributing to a lost revenue opportto receipt and 20 days DSO contributing to a lost revenue opportto receipt and 20 days DSO contributing to a lost revenue opport

Primary Metric Secondary MetricOpportunity Pareto

Pareto 1 Pareto 2

Management by Fact Management by Fact Bridges Hoshin Plan to ProjectsBridges Hoshin Plan to Projects

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Case

Lean Six Sigma

• Reduce variation and eliminate defects through data-driven methodology

• Improve operating margin through the reduction in cost of poor quality

• Identify the root cause(s) of a problem and drivers of variation using structured analysis

• Affect and sustain change through the prevention of defects and pursuit of continuous quality improvement

• Maximize process velocity (reduce completion time, eliminate waste)

• Reduce costs by removing complexity and waste from the process

• Create flow by separating “value-added” and “non-value-added” activities to eliminate waste

• Understand flow, from the point of customer request through product or service delivery

• Six Sigma, DFSS and Lean are deployed at Bank of America to accomplish Hoshin objectives across the organization

• Deployment of Lean and Six Sigma methodologies are driven by the opportunity and objective of projects

• Both Lean and Six Sigma are executed in a Define, Measure, Analyze, Improve and Control Framework

• Tools are shared across methodologies as required for each project

Primary Emphasis

Six Sigma and Lean

Cumulative CertificationsGreen Belt, Black Belt, Design for Six Sigma

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4,500

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DFSS

Black Belt

Greenbelt

Cumulative CertificationsCumulative CertificationsOrganization-wideOrganization-wide

Green Beltwith Lean

Green Belt with DFSS

Green Belt

Champion approves project to be entered into NIKU

DFSS E-LearningDFSS Training& Exam

Lean Training & Exam

Attend GB Training Week 2 and Pass Green Belt Exam

Complete certification packet, enter into CAS, Enter Savings into QPFM

Pass GB Skill Assess Pass Lean Skills AssessPass DFSS Skills Assess

Complete Project* (LOBs must average $250K/candidate) with sustained results

Complete Six Sigma E-Training, Attend GB Training Week 1

Lean Enterprise Training & Exam

MasterBlack Belt

Black Belt Lean Master

2 Weeks of BB Training and Exam

Complete Project* (s) >$1MM and pass skills assessment


Green Beltwith Lean

Green Belt with DFSS

Green Belt

Champion approves project to be entered into NIKU

DFSS E-LearningDFSS Training& Exam

Lean Training & Exam

Attend GB Training Week 2 and Pass Green Belt Exam


Pass GB Skill Assess Pass Lean Skills AssessPass DFSS Skills Assess

Complete Project* (LOBs must average $250K/candidate) with sustained results

Complete Six Sigma E-Training, Attend GB Training Week 1

Lean Enterprise Training & Exam

MasterBlack Belt

Black Belt Lean Master

2 Weeks of BB Training and Exam

Complete Project* (s) >$1MM and pass skills assessment


Bank of America CertificationBank of America Certification

Are you an MBBor a BB?

Has the GBCandidate

passed the GBexam?

Has the GBCandidate passed

the skillsassessment?

Has the GBCandidate

submitted acertification deck?

Contact GBCandidate's

GB Instructorfor GB exam

Administerexam to GBcandidate

Send exam toSix Sigma

Instructor forgrading

Obtain skills assessmenttemplate from Six Sigma

Education website under Toolsand Templates

Administerskills

assessment toGB candidate

Does GBCandidate

pass exam?

Does GB Candidatepass skills

assessment?

Is the Controltollgate

complete?

Contact Champion, FinancePartner and GB Candidate to

set up the Control tollgate

Does projectpass Control

tollgate?

Refer projectto LOB MBB or

BB forcertification

NO

YES

NO

YES

NO

YES

NO

YES

Coach GB Candidate tocomplete certification

deckNO

YES

NO

YES

Coach GB onnecessary

skilllsNO

Start END

Coach GBCandidate onproject to fill in

any gaps

NO

YES

MB

B /

BB

Coach GB onnecessary

skillls

Performcontrol tollgate

Enter projectdetails in CAS

Check "Sendto Finance"

Check"Create" in

QPFM

GB must pass exam and skills

assessment

DMAIC Tollgate

Deliverables

Finance must

approve savings

Green Belt Certification ProcessGreen Belt Certification Process

Sends automaticemail notifying SixSigma Education

Includes, automatically,candidate as being "certified" onCAS website & spreadsheet for

Action Legal

CAS automatically sends email toMBB/BB requesting certification

deck be sent to Six SigmaEducation

Use CAS tocertify project

Check CAS to see ifproject is displayed inred (meaning ready

to certify)

FIN

AN

CE

PA

RTN

ER

CA

SM

BB

/ B

B

Send certifcationdeck to Six Sigma

Education

AC

TIO

N

LE

GA

L Uses info fromCAS to sendcertification

package to GB

Check off inCAS that

package hasbeen sent

SIX

SIG

MA

ED

UC

ATIO

N

Generatespreadsheet of

allcertifications

Check to ensureGB's name appearson certification list

END

HOW TO CERTIFY A GREENBELT

Enter savings andmove projectstatus from

preliminary tocontrol

Automated System to

send certification

package

Green Belt receives

Certification Plaque, Shirt, Reward Points

Project Certification

Decks are retained in CAS system

Green Belt Certification ProcessGreen Belt Certification Process

CS&S Productivity Plan

J F M A M J J A S O N D

$MM

Cumulative Forecast Plan

Direct Expense Pareto

Personnel Telecom Gen Op Exp. Leases Furn &Equip

$mm

Cost Reduction Pareto

Carry

-ove

r fro

m '0

2

VRU Effe

ctive

ness

Shrink

age

E2E H

andle

Tim

e

On-

Line

Migr

ation

Gat

e Coll

apse

Ove

rhea

d Red

uctio

n

$mm

Cost per Contact by Channel

e-mail Agent VRU On-Line

Example: CS&S Shareholder MBFExample: CS&S Shareholder MBF

• VRU Effectiveness• Online Channel Migration

Strategy• E2E Handle Time Reduction• Shrinkage Reduction• Failed Customer Interactions

Projects Identified by MBFProjects Identified by MBF

Active Online Banking Users & % DDA HHs

2,500

3,500

4,500

5,500

6,500

30.0%

35.0%

40.0%

45.0%

50.0%

Total Active Users 4,431 4,563 4,704 4,805 4,920 5,060 5,263 5,484 5,723 5,950 6,078 6,305

% DDA HH Penetration 33.0% 34.0% 34.9% 35.6% 36.2% 37.0% 38.8% 39.6% 41.0% 42.5% 43.1% 44.5%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Strategic Target2003 Goal/ForecastCurrent MonthBaseline

4.3MM – Dec 2002 6.078 MM – Nov 2003 6.0 MM / 6.3 MM N/A

Source: eCommerce Active User MBF


2,500

3,500

4,500

5,500

6,500

30.0%

35.0%

40.0%

45.0%

50.0%




2003 YE Goal = 6,000 M

(000

)


2,500

3,500

4,500

5,500

6,500

30.0%

35.0%

40.0%

45.0%

50.0%




Strategic Target2003 Goal/ForecastCurrent MonthBaseline

4.3MM – Dec 2002 6.078 MM – Nov 2003 6.0 MM / 6.3 MM N/A

Source: eCommerce Active User MBF


2,500

3,500

4,500

5,500

6,500

30.0%

35.0%

40.0%

45.0%

50.0%




2003 YE Goal = 6,000 M

(000

)

0Subgroup 10 20 30

0.70

0.75

0.80

Indi

vid

ual V

alue

10-Aug 19-Oct 28-DecWeek Ending

1

1

11

56 6

5 5 6 6

1

21 1

1

Mean=0.7616

UCL=0.7939

LCL=0.7293

0.00

0.01

0.02

0.03

0.04

0.05

Mov

ing

Ran

ge

1

R=0.01215

UCL=0.03969

LCL=0

Weekly VRU Effectiveness for Voice Guided Service (5/19/03-12/28/03)

CSR Contacts Reduction Impact

0

200

400

600

800

0.10

0.15

0.20

0.25

0.30

0.35

Contacts Avo ided - User Growth 53 109 169 225 292 352 420 490 543 603 665 715

Contacts Avo ided - OLB Pro jectInit iat ives & OLB Migration

Contacts Avo ided / OLB User 0 .20 0 .22 0 .26 0 .24 0 .23 0.23 0 .23 0 .16 0 .15 0 .16 0 .18


Year End ResultsYear End Results

Online Banking EnrollmentVRU EFFECTIVENESS

0.730.740.750.760.770.780.79

0.8

Jul '0

2

Aug '02

Sep '0

2

Oct '02

Nov '02

Dec '0

2

Jan '0

3

Feb '0

3

Mar

'03

Apr '03

May

'03

Jun '0

3

Jul '0

3

Aug '03

Sept '0

3

Oct '03

Nov '03

Dec ' 0

3

Benchmark 2003 Goal Plan

Projections Actual

Common Cause Variation

Monthly

Common Cause Variation

Monthly

Special Cause:Action Required

Common Cause:No Action Required

Special Cause:Action Required

Common Cause:No Action Required

Shrinkage Percentage

24.00%

26.00%

28.00%

30.00%

32.00%

34.00%

36.00%

38.00%

40.00%

42.00%

44.00%

Sh

rin

kag

e P

erc

en

tag

e

Actual Benchmark Goal UCL LCL

95% Confidence Bands

Defects Per Million Opportunities (DPMO)

0

2000

4000

6000

8000

10000

Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Actual 2003 Goal Benchmark Forecast

4th Qtr DPMO 3,203

3,421 Goal

Year End ResultsYear End Results

Contact Handle Time Contact Center Shrinkage

Failed Customer Interactions

The Lean MethodologyThe Lean Methodology

• Identify high leverage opportunities• Map the Current State Value Stream• Analyze the Current State for all sources of waste or non-value added activity• Establish Improvement Targets• Design a Future State Value Stream utilizing Lean tools and Kaizen teams • Implement Changes• Standardize the Process

Principles of LeanPrinciples of Lean

Determine Value

Define Value Stream

Establish Flow

Create Pull

Strive For Perfection

Determine value from the eyes of the customer

Eliminate barriers to flow

Produce only what is needed when it is needed

Design process improvement (kaizen) into the control system

• Concept to Launch

• Order to Delivery

• Raw Materials to Customer

• Support

• Queues• Poor Layout• Defects• Breakdowns• Specialization

Principles of LeanPrinciples of Lean

Determine Value

Define Value Stream

Establish Flow

Create Pull

Strive For Perfection

Determine value from the eyes of the customer

Eliminate barriers to flow

Produce only what is needed when it is needed

Design process improvement (kaizen) into the control system

• Concept to Launch

• Order to Delivery

• Raw Materials to Customer

• Support

• Queues• Poor Layout• Defects• Breakdowns• Specialization

Adapted from Lean Thinking, J. Womack, D. Jones

CS&S Lean Center of ExcellenceCS&S Lean Center of Excellence

• Implementation of Lean COE run projects

• Facilitate the certification of Lean Greenbelts within Customer Service and Support

• Create awareness of the Lean tools and methodology within Customer Service Support

CS&S Q&P Exec

Lean Center of

Excellence

CS&S Leadership

Team

Responsibilities

Strategic Alignment

Fleet NE Operator

/ MBB

RS Operator

/ MBB

Client Operator

/ MBB

Card/IBCC

Operator/ MBB

CA/NW Operator

/ MBB

Model Operator

/ MBB

Key Processes

Execute/Facilitate

Improving Flow of Business ProcessesImproving Flow of Business Processes

Lean is “flow” within a value stream through elimination of non-value added activity (waste or muda)

• Lean value streams consume less of everything: Less time, less space, less resources

• Lean initiatives follow the path of the product or service to reduce completion time, improve cycle time and reduce overall cost of the operation

WORKPROCESSES

NORMAL

VALUEADD

FLOW REDUCE ELIMINATE

ABNORMAL

NECESSARY

NON VALUEADD

UNNECESSARY

Goals: • eliminate the abnormal

and the unnecessary NVA• reduce the non-value

added but necessary• place the value-added

processes into a natural flow sequence.

Evaluation of process steps

Define project to address business gap identified by champion

Assess how well the product flows to meet customer demand for value

Complete detailed analyses on select opportunities to design future state

Finalize and pilot solutions, analyze results, and plan for deployment

Implement improvements, validate results, and close project

Business Assessment • Project Charter• Project Metrics• E2E Process Map

(High Level)• Customer

Value(VOC)Change Management

• Stakeholder Analysis• Voice of Associate• Obstacles/Enablers

(Project FMEA) • Project Team• Project Timeline • Communication Plan

Customer Demand• Product Families• Demand Profile• Takt Time/Capacity

Activity of the Product• Detail Process Map• Time Value Maps• Information Flow • Spaghetti/Org. Map• Monuments• RTY Analysis

Opportunity Assessment• MUDA Costing • Prioritization Matrix • Financial Assessment

Resource Analysis• Skills Matrix• Activity of Associate• Activity of Equipment• Layout/5S Analysis

Process Analysis• FMEA / Cause & Effect• ICE / Five Why’s• Risk Assessment• Oper. Efficiency Model

Future State Analysis• Business Case (COPPO) • Future State Map • WIIFM Validation

Process Design• Material Flow • Information Flow

Process Standards• 5S Implementation• Standard Work• Staffing / Roles

E2E Coordination • Leveling• Kanban

Prove/Refine Solutions• Lean Metrics• Pilot / Simulation• Cost - Benefit• Deployment Plan (MGP)

Operational Mgmt.• Visual Controls• Error-proofing• Control Plan• Training

Deployment• Implementation

(per project scope)• Rebalance Resource • Document Results• Validate Financials

Cont Improvement• Kaizen Strategy• Lessons Learned• Replication Plan

DEFINE MEASURE ANALYZE IMPROVE CONTROL

Launch Projects

Focus on Critical Opportunities

Pilot Process Changes

Deploy Improvements

Validate Benefits

ID Business Need

Lean Roadmap - DMAICLean Roadmap - DMAIC

Pre-work

Face to Face1 (one per

physical location)

Middle Work

Face to Face2 (one per

physical location)

Pilot PhaseCompletion

•Scope Project•Identify Resources•Establish Timeline

3 weeks 1

week

2 weeks

1 week

8 weeks

75 Business Days

•VOA, Activity of Associate, Activity of Product•E2E, Spaghetti Mapping

•Process Analysis•TVM, COPPO Estimates•Preparation for F2F2

•Time Studies•Revise AOP, AOA, AOE•To Be Map•Demand Profile

•Pilot / Discovery•Implementation Plan•Savings Finalized•Certification

Anatomy Of a Lean ProjectAnatomy Of a Lean Project

Phases may overlap. Project participants should use condensed working sessions to accomplish remaining tasks.

Succeeding with Six Sigma and Lean in a Transactional and Services Environment

Documents

Transcript of Succeeding with Six Sigma and Lean in a Transactional and Services Environment