A Lean Approach to Staffing Brings Optimal Performance

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By Karim Houry and Habs Moy

Organizations are often challenged with managing seemingly unmanageable work volumes with available staff. At times, staff may feel overwhelmed with high work volumes, or underutilized during periods of low work volumes. When a management team finds itself confronting these issues, team members may ask the following questions:

• How can staff respond to internal and external customer inquiries more quickly?
• When the department has more work to process than in the past, but there is no budget to add staff, how can it do more with the same staff?
• When the department has less work to process than in the past, how can staffing levels be matched to lower work volumes?

The methodology described below may help answer these questions. Through a balanced application of Lean principles and capacity modeling, staffing optimization can become a reality.

What Is Lean Assessment?

A Lean assessment is a structured process used to improve process cycle time through the identification, reduction and elimination of process waste and non-value-added activities. It can be used to:

• Establish a relational context between the current process and baseline performance
• Identify what works well
• Identify quick hits, as well as longer-term options for process improvement

What Is Capacity Modeling?

Capacity modeling is a structured process used to calculate estimated staffing levels and gaps relative to actual employee headcounts. It can be used to:

• Provide insight into whether a department is overstaffed, understaffed or adequately staffed
• Create a basis for future staffing re-assessments when environmental conditions change (i.e., work volumes increase or decrease substantially)

What Is Staffing Optimization?

Staffing optimization involves balancing work volume (demand) with staffing (supply) based on application of Lean principles, including the 7 wastes and 5S, best practices and benchmarking. It is most needed when a business experiences:

• Customer complaints of slow service or response time
• Increasing work volumes, but no budget for additional staff
• Decreasing work volumes, and a need to reduce staff

Optimization Roadmap

Staffing optimization can be deployed using this roadmap; each phase of the roadmap has specific objectives:

Define steps:

• Meet with sponsor and process owner
• Create project charter
• Conduct team kickoff meeting

Lean assessment steps:

• Identify key business processes and staff responsibilities
• Identify staff for interviews about current processes
• Observe the process in action
• Document observations, best practices, pain points and recommendations
• Communicate and validate Lean assessment recommendations with the process manager, process owner and sponsor

Capacity modeling steps:

• Collect time-study data on work volumes, shrinkage or unavailability
• Construct capacity model for individual processes
• Construct capacity model for aggregate of all processes
• Perform staffing gap analysis

Staffing optimization steps:

• Summarize staffing gaps
• Recommend gap closing options and expected impacts based on Lean assessment
• Recommend short-term, medium-turn and long-term action plans
• Communicate and validate final recommendations with the process manager, process owner and sponsor

Taking Action

A clear segregation of duties is essential for successful completion of the desired outcomes of a Lean assessment and capacity model. The following tables summarize tasks, accountabilities and outcomes for a Lean assessment (Table 1) and capacity modeling (Table 2).

Table 1: Action Plan for Lean Assessment
Lean Assessment Tasks	Responsible Party	Desired Outcome
Identify key business processes Process manager and/or supervisor to complete Review summary for completeness	Process manager	Key business process summary
Identify staff responsibilities Review organization chart Document staff locations Document key business processes performed by each staff member	Process manager	Staff responsibilities matrix
Identify staff for one-on-one interviews Ensure coverage for key business processes High/Low performers Shift coverage	Process manager	Staff responsibilities matrix
Inform staff of the project, its purpose and that they will be contacted for interviews	Process manager or supervisor	Memo or other communication media
Schedule half- or full-day interviews Document schedule Send meeting invitation to interviewees FYI (CC) supervisor and process manager	Project leader	Interview schedule table
Conduct interviews at staff location(s) Document observations and initial recommendations for improvement based on 7 Wastes, 5S, best practices and benchmarking Document and validate process steps	Project leader	Walkthrough observations report, capacity model template
Review and validate observations with supervisor, process manager, process owner and sponsor	Project leader	Lean assessment presentation

Table 2: Action Plan for Capacity Modeling
Capacity Modeling Tasks	Responsible Party	Desired Outcome
Modify time-study data-collection table as required	Project leader	Time-study data-collection table
Inform staff of purpose for time studies and schedule half- or full-day sessions with the same individuals interviewed during the Lean assessment	Project leader	Interview schedule
Obtain cycle times by task. Obtain 30 samples for each task, if possible	Project leader	Time-study data-collection table
Use statistical tools to determine whether the cycle time data is normal. If normal, use the mean for cycle time, otherwise use the median	Project leader	Statistical software output
Enter the appropriate cycle times into the capacity model template. Create a separate model for each process	Project leader	Capacity model template(s)

One important additional step is to normalize the time study by accounting for various elements, including:

• Prior-year and year-to-date attendance records
• All allocated vacation, personal and sick days, as well as Family and Medical Leave Act days
• Attendance at meetings, town halls, training and so on.

For example, in call center environments, on average, approximately 25 percent to 30 percent of a representative’s time is “unavailable” for responding to inquiries.

Reaching Optimization

As the tasks involved in Lean assessment and capacity modeling are completed, the use of internal and external benchmarks becomes crucial to the credibility of the project and the final recommendations. Internally, it is advisable to compare staff and site performance levels, identify what works well around accuracy and cycle time metrics, understand why it works well and determine opportunities for replicability. Externally, there are multiple sources of information to access, such as industry associations and client-relationship managers.

Final recommendations to the sponsor and process owner should cover the following three elements:

1. Summary of staffing gaps or surpluses
2. Recommended options and expected impact
3. Proposed timeline

Having applied this methodology to more than a dozen business units across the enterprise, we have found this process to be highly effective in yielding quick hits as well as medium- and long-term opportunities.

About the Authors: Karim Houry is vice president and head of business reengineering and quality for the Depository Trust and Clearing Corp. (DTCC). He can be reached at khoury@dtcc.com. Habs Moy is a director and Master Black Belt at DTCC. They both have extensive experience in successfully deploying business performance improvements in financial services. Moy can be reached at hmoy@dtcc.com.

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