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Executive Summary

The objective of this report based on the case study on ICICI Bank, is to provide the current state
of the claims process and how an efficient and ideal claims system should be, by implementing
with 5S technique and Lean Office in the bank. Claims management is one of the key business
processes which have a direct impact on Customer Satisfaction and overall relationship with the
carrier. Based on various survey results, average customer satisfaction is Poor after going
through the claims process. This kind of resource intensive function will result in such poor
customer satisfaction.
ICICI Bank, being the second largest in the banking industry in India, with assets worth of
US$99 billion, with subsidiaries in Europe, North America and Asia, notably in Malaysia,
Singapore and Indonesia, ideal claims should be efficient or it will result in customer
dissatisfactions. As banking services are becoming more mature in age and volumes, the number
of claims arising will also increase. Constantly changing market conditions puts greater demands
in the service sector to focus more on customers and what actually adds value to them. Lean has
during the last decades had a great impact within the manufacturing industry, creating a whole
new competitive advantage if mastered.
In claims processing, the main goal of an organization is to decrease claim processing cost. The
same can be achieved by reduction in the claims processing TAT (turnaround time) and
improvement in their closure rate. This, in turn, will not only help the bank reduce the
operational claims expenses but also result in better customer satisfaction.

Table of contents

Introduction

1.1 Overview of ICICI Bank

1.2 Lean Services

Main Body
2.1 Defining the problems

2.2 5 S

2.3 What is 5 S

2.4 5 S as a part in Lean Services

11

2.5 Managing claims efficiently

11

2.6 Redesigning the Process

12

2.7 Lean process improvements with Lean Principles

13

2.8 Lean and six sigma approaches are just fads repacked from
Total Quality Management (TQM). Agree or disagree?

14

Conclusion

16

References

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Introduction
1.1) Overview of ICICI Bank
ICICI Bank is an Indian multinational banking and financial services company headquartered in
Vadodara. As of 2014 it is the second largest bank in India in terms of assets and market
capitalization. ICICI Banks total assets of Rs.5,946.42 billion (US$ 99 billion) at March 31,
2014 and profit after tax Rs.98.10 billion (US$ 1,637 million) for the year ended March 31,
2014. ICICI Bank offers a wide range of banking products and financial services for corporate
and retail customers through a variety of delivery channels and specialized subsidiaries in the
areas of investment banking, life, non-life insurance, venture capital and asset management. The
Bank has a network of 3,800 branches and 11,162 ATMs in India, and has a presence in 19
countries.
ICICI Bank is one of the Big Four banks of India, along with State Bank of India, Punjab
National Bank and Bank of Baroda. The bank has subsidiaries in the United Kingdom, Russia,
and Canada; branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and
Dubai International Finance Centre; and representative offices in United Arab Emirates, China,
South Africa, Bangladesh, Thailand, Malaysia and Indonesia. The company's UK subsidiary has
also established branches in Belgium and Germany.
ICICI Bank was established by the Industrial Credit and Investment Corporation of India
(ICICI), an Indian financial institution, as a wholly owned subsidiary in 1994. The parent
company was formed in 1955 as a joint-venture of the World Bank, India's public-sector banks
and public-sector insurance companies to provide project financing to Indian industry. The bank
was initially known as the Industrial Credit and Investment Corporation of India Bank, before it
changed its name to the abbreviated ICICI Bank. The parent company was later merged with the
bank. ICICI's shareholding in ICICI Bank was reduced to 46 percent, through a public offering
of shares in India in 1998, followed by an equity offering in the form of American Depositary
Receipts on the NYSE in 2000. ICICI Bank acquired the Bank of Madura Limited in an all-stock
deal in 2001 and sold additional stakes to institutional investors during 2001-02.

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In the 1990s, ICICI transformed its business from a development financial institution offering
only project finance to a diversified financial services group, offering a wide variety of products
and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank.
In 1999, ICICI become the first Indian company and the first bank or financial institution from
non-Japan Asia to be listed on the NYSE. In 2000, ICICI Bank became the first Indian bank to
list on the New York Stock Exchange with its five million American depository shares issue
generating a demand book 13 times the offer size.
In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI
and two of its wholly owned retail finance subsidiaries, ICICI Personal Financial Services
Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by
shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at
Ahmedabad in March 2002 and by the High Court of Judicature at Mumbai and the Reserve
Bank of India in April 2002.
1.2) Lean Services
Lean services, is the application of the lean manufacturing concept to service operations. It is
distinct in that Lean services are not concerned with the making of hard products. To date,
Lean principles of Continuous Improvement and Respect for People have been applied to all
manner of services including call center services, health care, higher education, software
development, and public and professional services. Conceptually, these implementations follow
very similar routes to those in manufacturing settings, and often use some of the same tools and
techniques. There are, however, many significant distinctions and the same tools can be applied
in different ways. A number of significant service sector organizations have come together to
form The Lean Service Forum to share knowledge, learn from each other and understand
different lean journeys.
Lean production has derived from TPS, which is a Japanese production philosophy. Since 1960
the TPS had its main impact on the manufacturing industry, presenting a whole new way of
thinking that often resulted in a sustained competitive advantage. During 1980-90, a large survey
of Japanese, American, and European car manufacturers was carried out, comparing these to
distinguish what separates Western production philosophies from Eastern. The survey resulted in
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a book called; The Machine that changed the world, this book started a movement all over the
world towards Leaner way of manufacturing and has had many followers over the years.
During the last decade Lean production has after a successful track record in manufacturing
context, made its way into the service industry, foremost within hospitals and financial services.
Results from numerous surveys show that the translation of Lean production to match service
processes has not been all that easy and have sometimes resulted in stressed personnel, insecurity
and resigning employees.
Lean production was developed to reduce waste and improve quality, to do more with less, in a
manufacturing context. In an assembly line or machine park processes are visible and less
complex to identify in comparison with a service working environment. Wastes like stock and
excess tools in a manufacturing context are easily identified and eliminated and processes can be
improved just by rearranging assembly stations or machines.

In a service context products and production processes are not as visible and waste is not as easy
to identify. This makes the initial steps when implementing Lean production more complex and
often companies dont adapt Lean as a concept or philosophy. Many companies dont seem to
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realize that implementing Lean production means to change the entire organizations values and
culture to fit Lean and not the other way around. ICICI Bank that it is operated from top-down,
something that will create some problems concerning the implementation of the Lean cultures
flat organization with a free information flow and low-level decision-making. Organizations
must move the decision making down to levels that carries the proper knowledge instead of
going through layers of managers. An open information flow is an essential factor to create
cross-functional teams; this gets employees involved and helps to create the big picture. The
fundamental base in Lean is to involve everybody in the organization and creating a new way of
thinking.

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Main Body
2.1) Defining the problems.
Looking at the current state of claims handling, A service sector like ICICI Bank claims center is
responsible for examining a claim and determining whether a claim is to be paid out or not based
on policy guidelines. A claim enters the center in a digital or manual format, where some claims
are automatically processed (using computer systems), while others are sent through to a team,
known as adjudicators, who will further evaluate the claims. From there a claim is sent through
an auditing process based on the amount where one or more auditors will check the claim and
appropriately adjust the claim if needed. Even with all of these checks in place, a claim may be
incorrectly paid out, paid in the wrong amount or denied when it should be approved.
There is a high variance in claim types and complexity, making it difficult to predict the time it
takes to complete the work. In addition, claims are currently processed by the first available
adjudicator taking on any incoming workload. This high variance makes it very difficult to
understand through put and the variance in quality.
To understand how Lean can be applied to administrative functions, it helps to think of
information as the product of the front office. If information is tied up in someones in basket or
otherwise idle, that explains why the lead time is so long. Another common problem in the front
office is the lack of an understanding of the total process and how all jobs are interconnected.
Employees focus on their own job responsibilities and departments work to meet departmental
measures, but no one has stepped back and asked, How does this whole process satisfy the
customer?

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Current work breakdown structure is as per the figure bellow.

2.2) 5 S
5S is a basic, fundamental, systematic approach for productivity, quality and safety improvement
in all types of business.
2.3) What is 5 S?
5 S (Five S) is usually a part of, and the key component of establishing a Visual Workplace and
are both a part of Kaizen - a system of continual improvement - which is a component of lean
manufacturing. 5 S focuses on: having visual order, organization, cleanliness, standardization.
The results you can expect from a 5S program are: improved profitability, efficiency, service and
safety. The principles underlying a 5S program at first appear to be simple, obvious common
sense. And they are. But until the advent of 5S programs many businesses ignored these basic
principles.
5S was developed in Japan and stands for the Japanese words seiri (tidiness), seiton (orderliness),
seiso (cleanliness), seiketsu (standardization), and shitsuke (discipline). These words have been
adopted to English to maintain "5S."
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Sort
Remove from the workplace all items that are not needed for current production (or office)
operation.
Sorting means leaving only the bare necessities
When in doubt, throw it away
Set in Order
Arranging needed items so that they are readily accessible and labelled so that anyone can find
them or put them away.
Shine
Sweep and clean the work area. The key purpose is to keep everything in top condition so that
when someone needs to use something, it is ready to be used. Cleaning a work area produces and
opportunity to visually inspect equipment, tooling, materials and work conditions.
Standardize
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Define what the normal condition of the work area. Define how to correct abnormal
conditions. The standard should be easily understood and easy to communicate (i.e. visual
controls).
Sustain
Implement solutions to address the root causes of work area organization issues. All employees
must be properly trained and use visual management techniques.
2.4) 5 S as a part in Lean Services
Lean Services as a whole is a production practice that eliminates waste for the aim of creating
value. 5S is considered a tool of lean that combines with other lean tools such as Kanban,
Kaizen, TPM and other lean manufacturing techniques to create the most efficient workplace
possible. 5S is generally considered a good place to start as a pilot program for lean
manufacturing due to its five basic principles and how it organizes the workplace.
2.5) Managing claims efficiently
Managing the claims process more efficiently, aligning it with corporate business objectives and
achieving real-time operational awareness are high priorities for bank. Previous attempts to
improve the process have typically been limited to speeding up a series of often inefficient and
disconnected processes or of reducing manual steps. To significantly improve claims
management and give themselves the ability to adapt quickly to changing circumstances, bankers
must make more profound infrastructure changes that align claims processing with corporate
objectives for customer service, operational cost, and risk management.
To modernize their claims processing, bankers must address the three sides of the claims
triangle: Reduce operational expense through increased efficiency and productivity throughout the value
chain.
Improve service levels by implementing a faster, more visible, and more consistent approach to
claims settlement.
Reduce indemnity cost through leakage control and pro-active fraud management.
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In planning for changes and enhancements in claims processing, bankers must not lose sight of
the importance of customer satisfaction. While cost control is an important objective, so is
maintaining the highest possible quality of service and best possible customer experience.
2.6) Redesigning the Process

This discovery leads to adopt a variation of the U.S. Marines ideal of Every man a rifleman.
For bankers, this should come as Every staff member a claims payer. If necessary, everyone in
the company ought to be able to process the simplest of claims, and if needed to hire extra staff,
should be able to pull them off the bus stop outside our conference room window and teach them
to pay claims in an afternoon!
Accepting this as a goal, the process needs to be redesigned to support it. Instead of one manager
pushing claims out to individuals as she saw fit, the new process involved a team of experienced

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processors classifying claims and forwarding them to a holding area for each classification. Each
class has standardized work and each staff member is certified to work on various classifications.
Now there is a pull system: a processor logs into the holding area for his or her level of
certification, takes up to a prescribed maximum, processes the claims, and pulls the next batch. If
the processor processes according to his or her training and the standard work, mistake proofing
is built in (no, I didnt know what a poka yoke was it was just common sense).
Before implementing the new process, it should be tried out. It could be measured how quickly
claims in each of the classifications could be processed, and all of them could be faster than the
old process.
Most of the improvements to the new process should come from the frontline workers. They
should know what body of knowledge was required for each classification. They would be
helpful to see potential failures ahead of time and will be helpful to find solutions as well.
Bankers should buy-in from them because they should be honored for their knowledge and
contribution to the company. Claims processors take pride in serving the customers, and
definitely they will not like it when they were falling behind.
Beyond training and re-training the claims processors, will certainly make everyone in the
company a claims processor. Every employee, from the C-suite down, had to take the claims
training for the lowest classification and pass the test with a score of 100 percent. This will give
a great resource from ending up behind schedule with processing. It also will improve the
customer service in which the bankers able to give in the call center and increased first call
resolution. Each year should require everyone to take a refresher course and pass the test again.
2.7) Lean process improvements with Lean Principles
Lean Process Improvement Step 1: Create a value stream map. Begin by observing end to end
process, setting aside time for interviews as needed. This will help to start with a high level idea
of the flow when we sit with both managers and frontline employees to get feedback and
understand the process from receiving a claim to paying out or denying a claim. Though
managers have a better idea of external flows and reporting, the details of the day to day
work is much more accurately captured by the folks doing the regular activities (it may be
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helpful to have these sessions separately so individuals can speak more candidly). The value
stream map that created will breaks out the work by functions, the flows of different types of
work, exceptions, etc.
Lean Process Improvement Step 2: Analyze the workload. During this step we understand all of
the different types of incoming work, the complexities posed by each type of claim and payout
ranges. We should also create a logical categorization of the claim types. This categorization
helps to further identify claims with greater complexity that may need specialized groups to
handle them and simple claims that may be candidates for automation going forward.
Lean Process Improvement Step 3: Learn from the leaders. Lastly work with top performers to
understand tips and tricks they may have to share with colleagues. We can create a process of
continuous improvement by creating incentives to increase regular feedback, which helps to be
progressive in the approach to the claims handling process by taking greater input from frontline
workers. Many tools can also be developed based on this feedback to decrease wasteful
approaches to various activities. Working closely with top performers allows understanding the
plausibility of achieving more aggressive targets and realigning our metrics to create a more
productive work environment.
2.8) Lean and six sigma approaches are just fads repacked from Total Quality
Management (TQM). Agree or disagree?
The more recent concepts of Lean and Six Sigma have mainly replaced but not necessarily
added to the concepts of JIT and TQM. Lean and Six Sigma are essentially repackaged
versions of the former, and the methods seem to follow the fad (product) life cycle. The literature
offers fairly similar and rather general CSF for these methods, e.g. top management support and
the importance of communication and information. What seems to be missing, however, is the
need for a systemic approach to organizational change and improvement.
A prediction is, given the fad or product life cycle phenomenon, that there will be a new method
promoted soon, something perhaps already experienced with the borderline preposterous concept
of Lean Six Sigma. On the other hand, based on the gap in time between both JIT and lean, and
TQM and Six Sigma a gap filled by BRP/reengineering the next method will be process
oriented.
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One could argue that the nature of the transitions from TQM to six sigma and from JIT to the
lean follow fad phenomena. Comparing the goals, approach, tools, history and CSF of these
methods, as well as reviewing the publication frequency in academia, the conclusion is that lean
and Six Sigma essentially share the same fundamental approach to change with JIT and TQM.
Furthermore, the ideas behind JIT and lean are not that different from the ideas in the quality
movement either. One difference could be the historical focus on the manufacturing industry of
JIT and lean. An obvious prediction is, given the fad or product life cycle phenomenon, that
there will be a new method promoted soon, something we perhaps are already experiencing with
the borderline preposterous concept of Lean Six Sigma. On the other hand, based on the gap in
time between both JIT and lean, and TQM and Six Sigma a gap filled by BRP/reengineering,
the next method will be more process oriented.
In addition, since history does not repeat itself but it often rhymes, organizations should view
any new promoted change method critically is it a fad or does it offer something substantially
new? There are tools, techniques and useful experiences from any change method. A major
contribution of the BPR movement, for example, is the importance of cross-functional processes,
not just processes, but cross-functional processes. Properly used, these tools can help an
organization improve performance. Finally, the importance of placing organizational change and
improvement methods in general under a systemic (process management) umbrella cannot be
overstated. This will increase organizational readiness for change and thus, hopefully, increase
probability of implementation success.

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Conclusion
Claims processing is one among many critical banking service functions; it does not exist in
isolation. Dynamic claims processing approach recognizes the need to integrate claims
processing with other key functions and manage the process for maximum efficiency, visibility,
and flexibility. Implementing and receiving the benefits of active claims processing does not
require starting from scratchit leverages existing front and back office systems to deliver
enterprise wide processing and connectivity. It is modular and implements BPM to standardize
processes and SOA to create reusable services. It improves the flow of information from claims
to servicing to underwriting to marketing, thereby enhancing an organization agility and
responsiveness to changing conditions. By enabling determined claims processing, it makes
possible for bankers to reduce risk exposure, improve customer service, control costs, and adapt
to change more quickly and easilyall of which can contribute to a much-improved competitive
position. Better use of technology, such as better claim solutions, telemedicine, etc. can
efficiently provide better customer services too, assuming the local infrastructure is in place to
take advantage of it.
Thus, I would like to recommend to the CEO of ICICI Bank of the above theories, frameworks,
techniques, whereby I have provided a concise overview of Lean Services and analysis which I
have done with environmental factors and technology changes. By analyzing and undertaking the
implementation of 5S techniques and Lean office and its various key components to derive and
support possible reasons that explained the strengths and weaknesses related to ICICI Bank. I
hope these will help to elevate the success in the business.

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