Towards Improving Banking Services Quality - 21 - 5-S Practice and Lean Banking

Towards Improving Banking Services Quality

21.

5-S Practice and Lean Banking

 

Introduction

 

The 5-S Practice, a core component of Lean methodologies, plays a pivotal role in streamlining banking operations. Rooted in the principles of organization, cleanliness, and standardization, it fosters a Total Quality Environment. By applying 5-S in banking, institutions can significantly reduce inefficiencies, improve workplace productivity, and enhance customer experiences. Whether it’s optimizing document retrieval times, maintaining a clutter-free environment, or promoting discipline among employees, the 5-S framework aligns seamlessly with Lean Banking principles, ensuring a structured and efficient approach to modern banking challenges. 5-S Practice is a recognized practice of TQMEX model and also a Lean tool for improving productivity. Five pillars of 5-S stand for five Japanese words – Seiri, Seiton, Seiso, Seiketsu and Shitsuke.

 

These five pillars are useful in improving the physical environment of the work place, and also the thinking processes. 5-S movement takes its name from the five Japanese words that start with the letter S. Basically 5-S Practice is applied in manufacturing industry, however this practice is also useful to service sector including hospitals, banks etc.

 

THE FIRST STEP OF 5-S – ‘SEIRI’ – The English equivalent of the Japanese word ‘Seiri’ is ‘Structurize’. It means organization of the affairs and sorting of things in a better way. ‘Straighten up’ may be another name of ‘Seiri’. The typical examples of ‘Seiri’ are: throw away rubbish and worthless items, separate the things that are necessary for the job from those that are not. It means clearly distinguish needed items from unneeded items and eliminate the unneeded items.

 

‘Seiri’ is the first pillar of visual workplace, corresponds to the ‘Just in Time’ (JIT) principle:

 

-          Not needed at all in the organization

 

-          Not needed here (at the workplace)

 

-          Needed, but not now

 

-          Needed, but not so much

 

‘Seiri’ means remove all items from the workplace that are not needed for current production operations. It is about separating the things, which are necessary for the job from those that are not necessary for the job. Keep the number of necessary things for the job as low as possible and at a convenient location. To make this step and effective one, you should differentiate between the necessary things and unnecessary things and discard the unnecessary things in following areas:

 

-          Unnecessary work in process

 

-          Unnecessary tools

 

-          Unused machinery

 

-          Defective products

 

-          Papers and documents of no use

 

Actions required:

 

-          Segregate required, useable, re-workable and obsolete items.

 

-          Dispose of the unwarranted items

 

-          Clear off walk ways

 

Remember:

 

-          One picture is worth more than thousand words.

 

-          Do away with unnecessary items and processes

 

Banking-Related Examples for Seiri (Sort, Structurize) 

 

Decluttering customer service desks by removing outdated forms and unused promotional materials ensures only the most relevant resources are available for employees. A bank branch segregates outdated promotional materials, irrelevant forms, and unused stationery, clearing up storage space. Identifying and archiving outdated customer records to ensure only active accounts remain accessible, enhancing system efficiency.

 

Impact: Reduces clutter, enabling staff to focus on current and relevant materials, which enhances efficiency.

Figure 14 - TQMEX Model and 5-S Practice

THE SECOND STEP OF 5-S – ‘SEITON’ – The English equivalent of the Japanese word ‘Seiton’ is ‘systematize’. It means neatness, set in order and orderliness (which means putting things in order). The typical example of ‘Seiton’ is: retrieval of a document within a shortest possible time (as early as possible say within 30 seconds). It means keeping needed items in the correct place to allow for easy and immediate retrieval. Set the things in order (arrange needed items) so that they are easy to use. Label the items so that anyone can find them easily and put them away.

 

Things must be kept in order so that they are ready for use when needed. Generally, it is observed that employees spent lot of time searching for documents, tools and records. Japanese companies are good examples for maintaining things in order. ‘Seiton’ is all about neatness and neatness is a study of efficiency that provides an answer to the question – ‘how quickly anyone can get the things needed and how quickly anyone can put them away’.

 

There are four ways of achieving ‘Seiton’:

 

-          Analyse the present situation

 

-          Decide where things belong

 

-          Decide how things should be removed or put away

 

-          Obey the put away rule

 

-          Putting things back where they belong

 

Actions required:

 

-          Use labels, colour codes for easy identification

 

-          Use index for file, records, drawings etc to facilitate retrievability

 

-          Plan storage with accessibility

 

Remember:

 

A place for everything and everything in its place

 

Banking-Related Example for Seiton (Systematize)

 

Introducing a digital document management system for faster retrieval of customer records, reducing retrieval time from minutes to seconds. The bank systematically organizes frequently used forms, such as loan applications and deposit slips, in labelled drawers or digital folders. Establishing QR code labels for documents and files, enabling employees to quickly locate and retrieve them using digital scanning tools.

 

Impact: Staff can retrieve any form or records within a few seconds, improving customer service speed and minimizing frustration during busy hours.

Figure 15 - Pillars of 5-S

 

THE THIRD STEP OF 5-S – ‘SEISO’ – The English equivalent of the Japanese word ‘Seiso’ is ‘Sanitize’. It means shining, sweeping and cleaning. ‘Clean up’ the work place to keep everything in top condition. When someone needs to use something, it should be ready for the use. Typical example of ‘Seiso’ is: individual cleaning responsibility.

 

Keep the work place clean. Everyone in the organization from the managing director to the lowest cadre staff should undertake he job. ‘Seiso’ means to conduct a clean-up campaign.

 

Actions required:

 

-          Inspect and cleaned the supply lines, stockroom, scrap-yards and gardens

 

-          Clean-up workplace, machines, and tools after use

 

-          Identify root causes of loud noise, vibration, heat build-up in equipment and take remedial action

 

Remember:

 

-          Spice and span lead to zero break-downs.

 

Banking-Related Example for Seiso (Sanitize):

Regularly cleaning ATM kiosks, branch counters, and employee workstations to ensure a hygienic environment for customers and staff. After each shift, the teller area is cleaned, and the workstations are sanitized, ensuring computers, counters, and cash counting machines are free from dust and grime. Implementing a checklist for cleaning high-touch areas like cash counters and PIN (Personal Identification Number) pads multiple times daily to reassure customers of safety.

 

Impact: A clean environment promotes better health for employees and leaves a good impression on customers.

 

THE FOURTH STEP OF 5-S – ‘SEIKETSU’ – The English equivalent of the Japanese word ‘Seiketsu’ is ‘Standardize’. It means standardization. ‘Seiketsu’ (standardize) differs from ‘Seiri’ (sort), ‘Seiton’ (set in order) and ‘Seiso’ (shine). The first three pillars can be thought of activities, as something people in the organization do. ‘Seiketsu’ (standardize) is the method to maintain the first three pillars of 5-S. It is the fourth pillar of the VISUAL WORKPLACE.

 

The emphasis is on visual management and standardization. ‘Seiketsu’ means to conduct ‘Seiri’ (sort), ‘Seiton’ (set in order) and ‘Seiso’ (shine) at frequent intervals (in fact daily) to maintain a workplace in perfect condition.

 

Actions required:

 

-          Develop standards

 

-          Establish checking procedure (5W + 1H) – What, Why, Where, Who, When and How.

 

-          Create visual controls

 

-          Devise ways and means to explore problems and their solutions

 

Remember:

 

-          Action speaks louder than words

 

Banking-Related Example for Seiketsu (Standardize)

Implementing uniform guidelines for arranging files, documents, and tools across all bank branches ensures consistency and easy auditing. The bank establishes a weekly checklist for cleaning and organizing customer lounge areas, including arranging chairs, sanitizing ATMs, and replenishing brochures. Using uniform designs for signage and forms across all branches, ensuring customers easily recognize and understand them.

 

Impact: Maintains consistent service standards across all branches, leading to better customer experiences.

 

THE FIFTH STEP OF 5-S – ‘SHITSUKE’ – The English equivalent of the Japanese word ‘Shitsuke’ is ‘Self-discipline’. It means to make a habit of properly maintaining correct procedures. Discipline is a process of repetition and practice. Self-discipline goes beyond discipline and becomes a habit of doing things in disciplined manner every time. The emphasis of the fifth step of 5-S is creating a workforce with good habits. Everyone must follow the procedures at the workplace every time.

 

Actions required:

 

-          Develop action plan for maintaining the set standards

 

-          Give unambiguous advice / instructions to your work associates

 

-          Carry on 5-S activities as a matter of habit and enthuse others to practice 5-S

 

-          Conduct self-audit of 5-S practice in your organization

 

Remember:

 

-          Be a self-starter

 

Banking-Related Example for Shitsuke (Self-Discipline):

Encouraging employees to habitually log out of systems after work to maintain data security, coupled with regular self-audits of their compliance with workplace protocols. All bank employees practice the habit of logging off systems at the end of the day and securely storing customer-sensitive documents in designated lockers. Conducting monthly employee workshops to reinforce the habit of promptly addressing workplace inefficiencies and maintaining the 5-S practice.

 

Impact: Encourages a culture of accountability and compliance with data security policies, reducing risks of information breaches.

 

Conclusion

 

The 5-S Practice is more than just a set of workplace principles; it is a transformative methodology that drives operational excellence in Lean Banking. By integrating 5-S into daily banking operations, institutions can achieve a structured, efficient, and customer-centric environment. From decluttering physical and digital spaces to fostering self-discipline among employees, the benefits of 5-S are manifold. Banks adopting these practices can expect enhanced productivity, streamlined processes, and a superior customer experience—hallmarks of success in the competitive world of modern banking.

 

A research study published on 31 August 2018 in the ‘IMPACT’: International Journal of Research in Humanities, Arts and Literature (IMPACT: IJRHAL) included the fact that ICICI Bank in India implemented 5-S. The bank claims to have saved around Rs. 75 million through the implementation of quality programmes. This could be contributed to the use of 5-S that made up to 50 per cent savings. And with other benefits the record time for tracing documents has reduced to 30 seconds.

 

In the rapidly evolving banking sector, where technology and customer expectations change dynamically, adopting methodologies like 5-S ensures banks remain agile, efficient, and customer-focused. By embedding these principles into their operational DNA, banks can pave the way for sustained growth and innovation.

I welcome your comments, questions and suggestions. 

Warm regards,

Keshav Ram Singhal 

Next - Other Lean Tools for Lean Banking