Situation

A medium-sized mutual savings bank-the leading mortgage lender in its region-was 18 months into its implementation of a Total Quality (TQ) effort when it found itself with insufficient resources in several key departments. Rapidly declining interest rates were creating a tremendous demand for mortgage refinancing, and the Mortgage Services department was severely overloaded with new mortgages and requests to pay off existing balances. Because mortgage demand is highly cyclical, however, the bank did not want to add permanent staff who might have to be laid off when demand returned to normal levels. The Financial Analysis Group found so much of its time taken up doing routine accounting tasks that insufficient resources were available for analysis and strategic planning

Solution

The bank asked Rath & Strong, which had been consulting throughout the Total Quality (TQ) implementation, to help devise ways to counter the work overload. Rath & Strong proposed the use of Load Shedding ^SM, a technique for rapidly eliminating unnecessary work from administrative and service processes. Two internal Load Shedding teams were chartered, one in Financial Analysis and one in Mortgage Services. The Financial Analysis team uncovered work reduction opportunities such as eliminating a filing procedure that duplicated records in Accounts Receivable, releasing data directly to department managers so they could perform their own analyses, doing daily exception reports to eliminate the need for monthly error research and reconciliation, and consolidating similar reports that were being produced for different managers. In Mortgage Servicing, the team saved time by eliminating an extra trial balance step, allowing mortgage payoff quotes to be handled in a single telephone call, and eliminating procedures that required a supervisor to sign off on approximately 70 batch submissions daily. Leadership of both teams was handed over to trained internal consultants once tangible results began to be achieved.

Results

In only two meetings, the 12-person Financial Analysis team was successful in eliminating more than 500 hours of work per year, enabling the department to focus more of its resources on strategic planning. The eight-person Mortgage Servicing team eliminated 2,180 annual hours of work. Employee stress from months of long hours has been reduced, as the department now has increased its mortgage-processing capacity without adding staff.