Hazardous Back Office Waste
If there were a way you could eliminate waste in your business while improving timeliness, quality and customer satisfaction, would you be interested?
Well, there is a way. All it takes is focusing on an area of your business you might have overlooked: your back office operations.
Every business has a back office. It can be your call center, your accounts receivable operation, claims-processing, application processing, customer service, fulfillment operation and the list goes on and on.
Idle Time and Over Time
It’s a common practice to underwrite the hiring of additional staff perceived as necessary to get the workout, meet deadlines and to avoid complaints, with limited or flawed analysis.
Inefficiencies in idle time or overtime increase per-item processing costs (waste).
For instance, while the core processes of most organizations are responsive to the ups and downs of business, many have failed to build the same flexibility into back-office operations.
Many businesses, across all industries, waste money staffing their back-office for peak volumes, even though their actual volumes vary by season, month, day and even hour.
That’s like a retailer staffing at Christmas levels in July.
How can it be avoided? Easy.
Knowledge and command of a few simple skills and tools can quickly generate savings of 10% – 30% of labor expenses.
The fundamental skills include the ability to do interval forecasting and generating metrics for productivity and unit cost. The degree of “waste” can be determined in a matter of a few hours.
Many supervisors and managers haven’t been taught the skills necessary to run their areas at peak efficiency.
So they take the safe way out, and run their departments at peak or greater than average staffing levels to avoid holdover and customer complaints.
But the safe way is also the expensive way. And in today’s increasingly competitive global economy, few companies can afford this status quo.
A rational approach to back-office operations requires a paradigm shift from the traditional, complacent approach to back-office tasks towards proactive performance culture.
While process improvement may not be sexy, and any cultural shift is sure to be difficult, the payoff can be significant.
Minimal operational training, undeveloped skills and limited tools familiarity is perceived as an easy and cost-effective approach; the inevitable waste is hazardous to their company’s health.