Results & ROI
- 37 hours per week saved (i.e. 1 FTE)
- <£5,000 p.a. in other costs (stationery, postage etc.)
Spectrum Housing Group (now merged with Sovereign) owned and managed 18,000 homes and maintained a further 45,000 across the south of England through Spectrum Property Care. Performance was good, yet Spectrum has always sought to improve and elected to run a small proof of concept project in Finance before embarking on a wider Lean Programme.
Spectrum identified the Invoicing process as an area most suitable for review. Rather than the process being ‘broken’ or in significant need of improvement the Financial Services Team (FST) was picked to be the ‘proof of concept’ for entirely different reasons: firstly the Finance Director, within whose department invoice processing is managed, was confident that a Lean project would be of benefit and was therefore comfortable in nominating one of her teams. Secondly it is a process that touches the entire organisation, and thirdly it is an area that is perceived to be currently performing well – proving that no matter how well a service is performing, there is always scope for improvement.
The review included finance staff, IT and users across the business. Three specific processes were reviewed: payment requests, purchase ordering and invoices with no purchase orders. These were mapped and then validated and measured using workplace observations, data collection and sampling exercises. The diagnostic work concluded that there was less scope for immediate improvement in the payment requests and non-PO invoices processes, as there was potential for improvement to the purchase order process.
A number of quick wins were identified:
- Introducing an e-form for payment requests rather than moving a physical papers around the organisation for approval
- Providing suppliers with a payments reference code when a PO was not used to help identify received invoices
- Offering the option of email remittances for tenant payments
- Instructions sent out to staff so invoices are received once only electronically to reduce duplicate payment
- There were further longer-term actions all of which were implemented over a 15-month period.
- The plan was tracked on the FST Information Centre along with a new set of metrics to manage improved performance and solve problems as they cropped up.
As a result of the review a simpler, more user-friendly process was designed that has made things easier for staff across the organisation to use, as well as suppliers. The team themselves felt energised by a new process where they felt more in control and could solve problems.
In addition to the quantified time and money saved, as above, the key benefit was the proof that Lean thinking was of value to the organisation.