bowled over and floored
April 8, 2013
joe collins
March 18, 2014
The following article was published in the September/October issue of Newsline Magazine, a bi-monthly publication of the National Equipment Finance Association reaching over 2,500 Equipment Finance Professionals, covering the topics, issues and people making a difference in today's Equipment Leasing and Finance Industry.

Keep Your Lean Business Process a Customer-centric One

By David Schaefer

There has been a recent resurgence, or perhaps a revisiting, of lean processes and principles as they pertain to running an efficient and effective business. The philosophy itself can be traced back to the times and wisdom of Benjamin Franklin and Henry Ford. When stripped down to its essence – or dare I say, the leanest definition of lean – it’s the preservation of value with less work. When framed through the lens of day-to-day business operations, this means that the end goal should be focused on creating value for the customer, while using as few resources as possible and eliminating wasteful activities.

Many people believe that lean processes are reserved solely for enterprise level companies, or a term thrown around in manufacturing and other large scale production facilities. This is simply not the case. The systems and methodologies associated with lean business processes should be adopted by businesses of all sizes in order to maximize and optimize operational efficiencies.

As the CEO of a small business performing Loan and Lease Management Services in the commercial equipment industry, I can really only speak from my experience and hope that there are some universal truths that can be applied to any type of business.

Let me start by reiterating what I believe to be the end goal of lean processes and principles – to provide ultimate value to your customer. This basic truth must always be the litmus test by which we navigate the sometimes muddied waters of developing better systems for our business. It is not always clear where the ‘short circuit’ is when beginning to re-engineer and retool workflow processes. Finding the tools and time needed to identify and remove wasteful practices that don’t add to the customer’s satisfaction is a constant endeavor.

When I started Orion First Financial, some twelve years ago now, we made a concerted effort to build a foundation and culture of customer satisfaction. We focused on this fundamental first, and secondarily, on developing scalable and efficient processes and systems. We began by acquiring software and made it fit processes we had learned from our previous years of experience in the industry. We added staff as volumes increased all the while maintaining a key awareness of pleasing the customer by delivering what they wanted.

Ultimately, we found ourselves growing revenue, but our profit was not growing as fast. Hiring more people just wasn’t the answer, so we began to look at the problem differently, using lean management as a guideline.

We identified and documented our core values and standards: Excellence, Collaboration, Integrity and Adaptability; so that as we started looking at changing how we did things, we would not stray from our core culture and our mission of delivering peace of mind to our customers and stakeholders.

We focus on client expectations, scoping out in detail the client’s desires, and memorialize the key deliverables - so both parties have clear expectations. Managing expectations is so crucial throughout this process and requires adept communication at all touchpoints. I find this step to be very important as it relates to lean, because you must have a clear understanding throughout the chain of what is the goal. We have found that describing the deliverable clearly and specifically helps in designing the right process, not just an efficient one. This can be very enlightening and ensures that everyone on the project, including the client, knows what the final output will be. Behind the scenes, and before agreements are generated, our staff reviews each client expectation and ensures that there are processes in place to meet those expectations within specified service levels.

We have found that documenting the current processes or what we call the “As Is”, is a good first step when tackling a functional area. The objective is to understand why we do what we do. This can be a very tedious process, but learning why helps us to understand how a process evolved over time. Once we have a good understanding of the “As Is”, we then begin to edit the processes and remove or consolidate steps. We have found that many steps in the process added very little customer satisfaction value. Some of the steps may be required to comply with rules and regulations and may not be able to be eliminated. Either way, our goal is to build the “To Be” process that focuses on the fewest steps, to give the greatest customer satisfaction. The result is that we have a dynamic back office workflow that is fluid and always becoming more efficient and more streamlined.

Most recently, we focused on our credit and underwriting areas, as the workflow was almost entirely manual in process. Our credit staff was becoming overwhelmed, so we took up this functional area. When the team saw that they could produce more results with less work, it sunk in and has generated momentum. Many years back, we found ourselves in a similar dilemma in the collection area, as we had mostly manual processes. We were able to leverage more of our backend systems and developed a proprietary Collection Management and Reporting System (CMARS™). The development and implementation of this system has allowed us to grow our portfolio under management significantly, with very little staff growth.

When you begin to understand and document the processes in your organization, you are then positioned to bring reporting and measurement into the picture. Performance can be improved as Key Performance Indicators are established and systems are in place to monitor and report performance. Orion monitors KPI’s in every area of our operation, and a dashboard comparing current and historical performance is distributed on a daily basis. Monthly staff meetings and routine departmental meetings are used to communicate Orion’s performance. By tracking and measuring results, we are able to keep the entire team aware of where we are at, at all times, which ensures that we are all pulling in the same direction to attain the desired results. The end goal is being able to transcend the details to create a service culture that reinforces client satisfaction.

We are a service provider, so our objectives are focused on delivering peace of mind to our customers. Collaborating with clients is greatly encouraged within our organization. Capturing and reporting KPI data and delivering this information to clients, combined with routine and consistent monthly client briefings and portfolio reviews, provides transparency and builds greater trust with the client. We exist to satisfy clients, and enjoy delivering a suite of robust services so they can place more emphasis on growing their businesses.

So, don’t let lean intimidate you. It isn't just large companies and manufacturers. Many do it without even knowing that they are practicing some of the principles. It can be as simple as where to put the copier or printer so it is close to those that need it most. The real advantage of implementing lean systems and methodologies is that it gives a common language and structure to your business - so everyone in the organization can be looking for ways to improve the customer experience, while striving to do so in the most efficient ways possible.

About the Author

Dave Schaefer is the founder and Chief Executive Officer of Orion First Financial, LLC which was established in 2001 as a small ticket, commercial equipment lease servicer and advisor. Dave has over thirty years of experience in the commercial equipment finance industry, including senior management responsibility for treasury, operations, information technology, accounting and portfolio management.