Articles

Can financial services learn from manufacturing?

More and more financial services companies appear to be adopting practices from industry. Support operations are now called factories, industrial engineering departments have sprung up and 6 Sigma is becoming widespread. Is this spin or substance? Can manufacturing practice really be relevant in financial services, where the products are intangible and the processes are information based?

We all know that mass production, TQM, JIT, time-based management and lean models have transformed blue collar productivity in the last 100 years, and have created the consumer society we have today. For service and information industries, the challenge is to make a similar step change in productivity.

The scope is there. For example, supermarkets manage check out queues to meet customer demand whereas banks still lag behind. Many productivity techniques used in manufacturing can be adapted for financial services:







Technique Manufacturing Financial Services
Zero defects
  • Make products deliverable reliably every time
  • Deliver the service right first time, every time.

  • Heed the voice of the customer and delvier to requirements
Zero delay
  • Scheduling and timing to minimise delays
  • Making to order
  • Bar coding & tracking
  • Forecast workload and match resources to it.
  • Minimise branch queues.
  • Minimise call answering times.
Zero downtime
  • Equipment maintenance.
  • Inventory management
  • ATM maintenance.
  • Service flexibility
    Zero inventory
    • Just in Time scheduling of supplies
    • Supply chain management

    Summary

    There is a lot of scope for adapting manufacturing techniques to financial services, and many financial services companies have started to take these on board. Of course, there are real differences, and the services industries can benefit from lessons learned during the manufacturing evolution. Examples include:

    • The importance of recognising the personal needs and motivations of workers, not just as resources to manage, and
    • The value of the Voice of the Customer in determining what is critical to quality.

    If you would like to reap the benefits from what has been learnt in manufacturing and is transferable to financial services contact Paul Cartwright.