LEAN – CUSTOMER EXCELLENCE

FINAL PROJECT

Submitted by

Arun Veera Balaji

(ERBE11006)
RBS Batch 5

For the award of the

EXECUTIVE POSTGRADUATE PROGRAMME IN BUSINESS MANAGEMENT

LOYOLA INSTITUTE OF BUSINESS ADMINISTRATION

LOYOLA COLLEGE, CHENNAI

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 QUOTATIONS

Continuous improvement is not about the things you do well - that's work.
Continuous improvement is about removing the things that get in the way
of your work. The headaches, the thing that slows you down, that’s what
continuous improvement is all about. ~Bruce Hamilton

The first rule of any technology used in a business is that automation

applied to an efficient operation will magnify the efficiency. The second is
that automation applied to an inefficient operation will magnify the
inefficiency. ~Bill Gates

BONAFIDE CERTIFICATE

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This is to certify that the final Dissertation entitled “Lean –Customer

Excellence” submitted by “Arun Veera Balaji” to LIBA, LOYOLA COLLEGE,

CHENNAI for the award of the EXECUTIVE POSTGRADUATE PROGRAMME IN

BUSINESS MANAGEMENT is a bonafide record of research work carried out by

him under my supervision. To the best of my knowledge, the contents of this

report in full or in parts have not been submitted to any other Institute or

University for the award of any degree or diploma.

Research Guide(s)
Date: 11-Oct-2013
Ramaswamy Chidambaram
(Manager)

ACKNOWLEDGEMENTS
I would never have been able to finish my dissertation without the guidance of my
committee members, help from friends, and support from my family.

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I Would also like to thank Mr. Ramaswamy Chidambaram for his assistance and
guidance in getting my on my thesis. I believe that his actions provided me with the
unique opportunity to gain a wider breadth of experience.

I would like to thank my department and team members for their valuable input,
valuable discussions and accessibility.

Last, but by no means least, I thanks my close friends for their support and
encouragement throughout.

EXECUTIVE SUMMARY

The major challenge of team was to pre-match the trades accurately as the process
was manual, which brought risk into play. Further the process consumed a lot of time.
A manual reconciliation between our trade details vs. counterpart’s trade details
needed to be performed to avoid queries on the date of settlement and agreeing pair-
offs. Trade details consists of security code, Value date, Trade Date, Nominal, Cash
settlement amount etc., We had a rigorous brainstorming on how best we can make

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 the pre-matching activity automated with less manual intervention. During the
brainstorming session the idea of Macro was suggested as process improvement. Out
of all the ideas this idea was chosen, as it met the requirement i.e., making the process
automatic, risk free & quick.

The Quality tools & session like 5Why, fishbone, etc. had been conducted to
understand and to identify best possible solution of the issues or problem which may
or are comes to design the macro.

The main purpose of this tool is to reduce the manual intervention and to identify the
trade discrepancy in more effective and accurate manner. The manual reconciliation
may result in difference in trade details not notified to counterpart. In-turn this may
lead to mis-match between cpty & ours instructions in the market, resulting in non-
settlements of trades. The pre-matching activity being automated will save time and
increase the accuracy on the reconciliation. The macro had been tested in all possible
scenarios and the results where stable.

TABLE OF CONTENTS
Page

QUOTATIONS………..…………………………………………………………… 2

ACKNOWLEDGEMENTS……………………………………………………….. 4

EXECUTIVE SUMMARY..……………………………………………………… 5

ABBREVIATIONS………………………………………………………………. 8

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 CHAPTER 1 INTRODUCTION TO LEAN

1.1 Introduction……………………………………………………………...... 9
1.2 Definition…………….………………………………………………........ 9
1.3 Lean History……………………………………………………………… 10
1.4 Lean and Finance…………………………………………………………. 11
1.5 To Make Lean a Success…………………………………………………. 11
1.6 Type of Wastes…………………………………………………………… 12

CHAPTER 2 INTRODUCTION TO REPO

2.1 Definition of A Repo Transaction………………………………………… 13

2.2 Repo/Reverse Repo Trade Structure ……………………………………... 13
2.3 Sell/Buy Backs and Buy/Sell Backs …………………………………….. 13
2.4 Reverse Repo…….……………………………………………………….. 14
2.5 Benefits of Repo………………………………………………………….. 15
2.5.1 Numeric Example………………………………….……………………… 15

CHAPTER 3 TECHNIQUES & TOOLS

3.1 Brainstorming……………………………………………………….......... 16
3.1.1 Brainstorming Implemented In Pre-Matching tool ………………………. 17
3.1.2 Results of a Brainstorming Session………………………………………. 18
3.2 Fishbone Diagram…….…………………………………………………… 19
3.2.1 How to Create a Fish Diagram…………………………….……………… 19
3.2.2 Fishbone Diagram Implemented in Pre-Matching tool……………………. 20

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 3.2.3 Results of Drawing a Fishbone Diagram………………………………….. 20
3.3 5 Why Technique…………………………………………………………..21
3.3.1 History……………………………………………………………………... 21
3.3.2 Results of 5 Whys………………………………………………………….. 22
3.4 Affinity Diagram…………………………………………………………… 23
3.4.1 How To Create An Affinity Diagram……………………………………… 23
3.4.2 Affinity Diagram In Pre-Matching Tool…………………………………… 24
3.4.3 Results of Affinity Diagram………………………………………………... 24
3.5 Priority Matrix……………………………………………………………… 25
3.5.1 Priority Matrix In Pre-Matching Tool………………………………………. 26
3.5.2 Results of Drawing a Priority Matrix……………………………………….. 27
3.6 SIPOC………………………………………………………………………. 27
3.6.1 Implementation steps……………………………………………………….. 28

CHAPTER 4 PREMATCHING TOOL SUCCESS

4.1 Prelude To Pre-Matching Tool……………………………………………. 29

4.2 Challenges & Risks Faced During manual Pre-Matching………………… 30
4.3 Testing of Pre-Matching Tool…………………………………………….. 30
4.4 Research Techniques……………………………………………………… 31
4.5 Going Pre-Matching tool…………………………………………………. 32

CONCLUSION………………………………………………………………………… 34

ABBREVIATIONS

 CPTY - Counterparty

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 PO - Pair-Off

 REPO - Repurchase

 ISIN - International Securities Identification Number

CHAPTER 1

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 1.1 INTRODUCTION: -

Lean is a term used in business to describe a simplified and minimalist approach to

doing business. According to the Environmental Protection Agency (EPA), the lean
methodology took off in the U.S. in 1980s as a way for companies to reduce overhead
costs, streamline processes and production and eliminate waste.

The core idea is to maximize customer value while minimizing waste. Simply, lean
means creating more value for customers with fewer resources.
A lean organization understands customer value and focuses its key processes to
continuously increase it. The ultimate goal is to provide perfect value to the customer
through a perfect value creation process that has zero waste.

1.2 DEFINITION: -

"Lean", is a production practice that considers the expenditure of resources for any
goal other than the creation of value for the end customer to be wasteful, and thus a
target for elimination. Working from the perspective of the customer who consumes a
product or service, "value" is defined as any action or process that a customer would
be willing to pay for.

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1.3 LEAN HISTORY:-

Lean is an evolution from mass production and has been around for 50 years.
Whereas mass production produces high volumes with inflexibility, low quality and
low initial costs. It is a way of working that ensures high volumes, high quality,
improved flexibility and low costs for a business. It originally came from a struggling
company called Toyota that could not play its employees and struggled to compete
with the US car manufacturers, taking 9 times as long as the US to make cars and
only 11,000 cars compared to GM’s 3.65 million. This situation forced Toyota to be
innovative. They started by focusing on what would benefit customer. By 1970
Toyota was the 6th largest car producer in the world and since 2009 is now number 1,
selling 8.47 million cars, where GM produced 7.58 million.

“We must understand who our customers are and what we provide them”

Lean caught the imagination of manufacturing people in many countries. Lean

implementations are now commonplace and the knowledge and experience base is
expanding rapidly.

In 1990s certain pioneer companies recognized that the benefits of applying lean are
not limited to manufacturing but are equally applicable to service industries and
public sector. Service companies now need to give serious consideration to how lean
relates to their business and how they should apply it in order to achieve meaningful
and lasting benefits.

1.4 LEAN AND FINANCE:-

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Lean is now a proven lever in financial institutions. However initial implementations
were not very successful, primarily for 3 reasons:
 Visibility of process: It is significantly easier in most manufacturing
environments to observe the working processes and identify waste. In a
financial environment a lot of effort must be conducted to make the work and
progress visible.
 Variability of process: In most manufacturing environments the aim of lean
is to minimize variability to remove waste. For many financial services
departments such as call centers, minimization of variability can only be
conducted so far, therefore a lot of effort must be conducted to manage
variability instead and minimizing it.
 Teams tried to pick and choose lean improvements rather hen using a balanced
approach.

1.5 TO MAKE LEAN A SUCCESS:-

1.6 TYPES OF WASTES:-

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 CHAPTER 2

2.1 DEFINITION OF A REPO TRANSACTION: -

A repurchase (or “repo”) transaction involves a purchase or sale of securities with a

simultaneous agreement to reverse the transaction at an agreed date and price in the
future. This effectively is a “collateralized” cash loan, with securities being used as
collateral.

2.2 REPO/REVERSE REPO TRADE STRUCTURE: -

2.3 SELL/BUY BACKS AND BUY/SELL BACKS: -

A 'sell/buy back' is the spot sale and a forward repurchase of a security. It is two
distinct outright cash market trades, one for forward settlement. The forward price is
set relative to the spot price to yield a market rate of return. The basic motivation of
sell/buy backs is generally the same as for a classic repo, i.e. attempting to benefit
from the lower financing rates generally available for collateralized as opposed to
non-secured borrowing. The economics of the transaction are also similar with the
interest on the cash borrowed through the sell/buy back being implicit in the
difference between the sale price and the purchase price.

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There are a number of differences between the two structures. A repo is technically a
single transaction whereas a sell/buy back is a pair of transactions (a sell and a buy).
A sell/buy back does not require any special legal documentation while a repo
generally requires a master agreement to be in place between the buyer and seller
(typically the SIFMA/ICMA commissioned Global Master Repo Agreement
(GMRA)). For this reason there is an associated increase in risk compared to repo.
Should the counterparty default, the lack of agreement may lessen legal standing in
retrieving collateral. Any coupon payment on the underlying security during the life
of the sell/buy back will generally be passed back to the buyer of the security by
adjusting the cash paid at the termination of the sell/buy back. In a repo, the coupon
will be passed on immediately to the seller of the security.
A buy/sell back is the equivalent of a "reverse repo".

2.4 REVERSE REPO: -

A reverse repo is simply the same repurchase agreement from the buyer's viewpoint,
not the seller's. Hence, the seller executing the transaction would describe it as a
"repo", while the buyer in the same transaction would describe it a "reverse repo". So
"repo" and "reverse repo" are exactly the same kind of transaction, just being
described from opposite viewpoints.

The term "reverse repo and sale" is commonly used to describe the creation of a short
position in a debt instrument where the buyer in the repo transaction immediately
sells the security provided by the seller on the open market. On the settlement date of
the repo, the buyer acquires the relevant security on the open market and delivers it to
the seller. In such a short transaction the seller is wagering that the relevant security
will decline in value between the date of the repo and the settlement date.

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2.5 BENEFITS OF REPO: -

 Firm Financing : - Borrowing securities to cover an outright short position in the

cash market. Financing long securities position by lending them out via repo.

 Lower Financing Costs: - Secured cost of funds is lower than unsecured money
market funds for financing security portfolios.

 Yield Enhancement: - Able to extract extra yield from lending bonds that are
currently trading special via repo trading strategies.

 Leverage: - By leveraging up their portfolio via repo, investors can enhance their
portfolio returns.

2.5.1 Numeric Example:

– A hedge fund started with USD 10mio capital

2 Portfolios:
Unleveraged Portfolio and a Leveraged Portfolio (10 x capital)

– Purchases a 5 year State Bank of India (SBI) bond yielding Libor + 2.25%
Assume Libor = 5 year mid swap rate and is at 2.25%

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 CHAPTER 3

3.1 BRAINSTORMING: -

Brainstorming is a popular tool that helps you generate creative solutions to a

problem.

It is particularly useful when you want to break out of stale, established patterns of
thinking, so that you can develop new ways of looking at things. It also helps you
overcome many of the issues that can make group problem-solving a sterile and
unsatisfactory process.

A brainstorming session requires a facilitator, a brainstorming space and something on

which to write ideas, such as a white-board a flip chart or software tool. The
facilitator's responsibilities include guiding the session, encouraging participation and
writing ideas down.

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 Brainstorming works best with a varied group of people. Participants should come
from various departments across the organization and have different backgrounds.
Even in specialist areas, outsiders can bring fresh ideas that can inspire the experts.

There are numerous approaches to brainstorming, but the traditional approach is

generally the most effective because it is the most energetic and openly collaborative,
allowing participants to build on each other’s ideas.

3.1.1 BRAINSTORMING IMPLEMENTED IN PRE-MATCHING TOOL: -

There were so many creative ideas and issues involved in the process to make it
replace with pre-matching tool. For which understanding the exact problem and state
those clearly for the benefit of all the participants. We have brainstormed with team
people, gave enough time for everyone to think and clarify their ideas and used post-
its and flip charts to note down each idea that comes up during the session. Whatever
the point may be small or large we have listed out what all will be positive action and
negative action because of this tool. And made sure the brainstorming session stays on
track with respect to the problem. By listing down the points we have actually come
to knew more about the team burden and time took because of the manual work..

Pre-matching tool will help to reduce the time and resource in team. And also we
should make sure that because of this tool any other activities or actions should not be

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affected and it should be more accurate and faster then the manual. The brainstorming
session was done with the group of all the teams involve in to design the tool
effectively. And first we made sure that all the users understood the objective and goal
of the pre-matching tool. So that they can work more accurate and provide the exact
outcome, which are expected after implementing the pre-matching tool. Therefore, the
team should have clear and proper understanding about the process and current steps,
which are cared out manually in pre-matching activity. We should make sure all
participants are aware of the problem statement for the session.

There were many challenges that had listed down before starting the work of
implementing the tools. Like, will the system provide accurate details and will it show
the duplicate records and how it should be reconcile our details with the counterparty
(Cpty) details available in sheet. Will it required and particular format, will it need
any particular information, and do we have to remove any unnecessary details from
sheet and some other challenges were in front of us. Because before implementing the
tool we have to note whether really these tool will add value to our work and to our
clients or customers. And we have to fix a timeline for each brainstorming session.

We had collected all the ideas from all people, we haven’t selective about the ideas, as
no idea is a bad idea at this stage. Because more the unique ideas more its better,
organize ideas by category and consolidate them.

3.1.2 RESULTS OF A BRAINSTORMING SESSION: -

Brain storming helps in both identifying a problem and also possibilities of multiple
solutions for a problem. We have come across all the possible problems and solution
that comes in pre-matching tool. And we have made all the ideas unique that were
duplicated and removed which may not be possible to implement in pre-matching
tool. And now the ideas generated during the session can be further organized: -

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3.2 FISHBONE DIAGRAM: -

A fishbone diagram, also called a cause and effect diagram or Ishikawa diagram, is a
visualization tool for categorizing the potential causes of a problem in order to
identify its root causes.
Dr. Kaoru Ishikawa, a Japanese quality control expert, is credited with inventing the
fishbone diagram to help employees avoid solutions that merely address the
symptoms of a much larger problem.

A fishbone diagram is useful in brainstorming sessions to focus conversation. After

the group has brainstormed all the possible causes for a problem, the facilitator helps
the group to rate the potential causes according to their level of importance and
diagram a hierarchy. The design of the diagram looks much like a skeleton of a fish.
Fishbone diagrams are typically worked right to left, with each large "bone" of the
fish branching out to include smaller bones containing more detail.

3.2.1 HOW TO CREATE A FISH DIAGRAM: -

Create a head, which lists the problem or issue to be studied.

Create a backbone for the fish (straight line which leads to the head).
Identify at least four “causes” that contribute to the problem. Connect these four
causes with arrows to the spine. These will create the first bones of the fish.

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Brainstorm around each “cause” to document those things that contributed to the
cause. Use the 5 Whys or another questioning process such as the 4P’s (Policies,
Procedures, People and Plant) to keep the conversation focused.
Continue breaking down each cause until the root causes have been identified.

3.2.2 FISHBONE DIAGRAM APPLIED IN PRE-MATCHING TOOL:

Before we start with drawing fishbone we should write the problem in simple terms
so that it is clear to all. By using the brainstorming tool we identify all the possible
causes and for each causes we must ask ‘why’ and ‘how’, which would break the
problem into small causes that can be fix.

If the problem can’t fix easily then again the brainstorming session has to be
conducted for that particular problem and identify the possible solution for it. Then it
pushes the team or individual to think of all possible causes.

3.2.3 RESULTS OF DRAWING A FISHBONE DIAGRAM: -

 A Fishbone diagram gives an orderly understanding of a problem and its

causes after which solutions can be arrived it.
 It pushes the team or individual to think of all possible causes.
 It is adaptable both as a group exercise and an individual approach to a
problem.
 When done as a group exercise, a fishbone helps in establishing a clear
understanding of the process regardless of the role individuals in it.
 The root causes identified can be prioritized by using Pareto analysis and
Priority matrix.

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3.3 5 WHY TECHNIQUE: -

5 whys is one of the most simple and easy to use problem solving tools that will help
you narrow down on the root cause of a problem.

The 5 Whys is a simple problem-solving technique that helps you to get to the root of
a problem quickly. Made popular in the 1970s by the Toyota Production System, the 5
Whys strategy involves looking at any problem and asking: "Why?" and "What
caused this problem?"

Very often, the answer to the first "why" will prompt another "why" and the answer to
the second "why" will prompt another and so on; hence the name the 5 Whys strategy.

3.3.1 HISTORY: -

The technique was originally developed by Sakichi Toyoda and was used within
the Toyota Motor Corporation during the evolution of its manufacturing
methodologies. It is a critical component of problem-solving training, delivered as
part of the induction into the Toyota Production System. The architect of the Toyota

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Production System, Taiichi Ohno, described the 5 Whys method as "the basis of
Toyota's scientific approach . . . by repeating why five times, the nature of the
problem as well as its solution becomes clear.” The tool has seen widespread use
beyond Toyota, and is now used within Kaizen, lean manufacturing, and Six Sigma.

3.3.2 RESULTS OF 5 WHYS: -

 5 Whys method removes the symptoms of a problem until the root cause is
revealed.
 This method encourages the healthy habit of questioning why an effect
happens rather than delve on that fact that it has happed.
 After obtaining the root cause, use other problem solving tools to find a
suitable solution to the problem.
 5 Whys often helps as a preamble in the process of identifying a problem by
pointing you to a ‘suspect’ factor.

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3.4 AFFINITY DIAGRAM: -

The Affinity Diagram tool is used to consolidate a large amount of information into
groupings or clusters of ideas that have a natural 'affinity', i.e., that have a common
thread running through them. This is a great tool to use when sorting Voice of the
customer data under broad 'Issues' categories.

It can be used very effectively to organize the ideas extracted from a Brainstorming
exercise where people from diverse and unrelated departments might come together
to solve a complex problem.

3.4.1 HOW TO CREATE AN AFFINITY DIAGRAM: -

 Use the Brainstorming tool to generate a list of ideas. The rest of the steps in the
Affinity process will be easier if these ideas are written on post-its.

 Post the ideas on a chart pack, a wall, or a table in a random manner.

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 Sort the ideas into groups. That is, identify ideas that are related to each group as
and when the ideas relate to a group.
 Complete the diagram by providing the problem statement on top of the diagram
followed by the headings, sub-headings and ideas.

3.4.2 AFFINITY DIAGRAM IN PRE-MATCHING TOOL: -

Before start with affinity diagram we make sure the group participating in the affinity
diagram exercise is familiar with the problem statement. And they should be clear
about what exactly which ideas are grouped under which position. Individuals are
allowed to change the position of the ideas under groups. If single idea is repeated
even after removing the duplicate ideas in brainstorming session then probably, the
idea is relevant in both groups. Make a copy and under both group headings.

Now we have grouped all the ideas in different relevant groups. Even after if there are
gaps in the diagram at the end, brainstorm to generate more creative ideas under that
heading. We should make sure that there wouldn’t be any unwanted ideas left on
board which may not be useful in pre-matching and without which it can be done
better. And also make sure that all the ideas are group under its particular groups,
which make easier to fix the problem through different ideas and identify the best
possible solution.

Affinity Diagram helps in designing the pre-matching tool by grouping which activity
is much important than others and it classify all the activity step by step which make
easier to decide what all need to be included in pre-matching and what can be
excluded.

3.4.3 RESULTS OF AFFINITY DIAGRAM: -

 The Affinity diagram gives you a very clear view of all the problems and the
major categories they come under.
 It encourages participants not only to invent creative ideas but also ensures
their relevance to the problem at hand.

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  The affinity diagram makes it easy for you to later priorities the probable
solutions identified for a problem.
 After completing an affinity diagram, depending on the robustness of the
ideas, you can move to the decision making process.

3.5 PRIORITY MATRIX: -

Not everything is important. For this reason, we need to prioritize so that we can
channel energies and resources in the most prudent way.

The Prioritization Matrix is a simple tool that provides a way of sorting a diverse set
of items into an order of importance. It also enables their relative importance to be
identified by deriving a numerical value of the importance of each item. Which means
an item with a score of 344 is clearly higher in importance than an item with a score
of 133.

To create a matrix, you must judge the relative ability of each possible action to
effectively deliver the results you want compared to every other identified action. The
product of your work is a weighted ranking of all the possible actions you are
considering. The finished matrix can help a team make an overall decision or
determine the sequence in which to attack a problem or work toward an objective.

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A priority matrix is a simple graph drawn with complexity of issue at the horizontal
axis and size of impact on the vertical axis. On this matrix, the issue or solutions are
rated based on ease of implementation and the impact of the expected results.

3.5.1 PRIORITY MATRIX IN PRE-MATCHING TOOL: -

We have to discuss and rate each item based on its complexity and impact, plotted
items and implement them in order below:-
Category 1: High impact and easy to implement
Category 2: Low impact and easy to implement
Category 3: High impact and difficult to implement
Category 4: Low impact and difficult to implement

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3.5.2 RESULTS OF DRAWING A PRIORITY MATRIX:-

 Priority matrix results in an ordered diagrammatic representation of issues or

solutions plotted based on their complexity against the impact on
implementation.
 It enables you to conclude whether resolving an issue or implementing a
solution is worth the effort involved.
 It clearly displays time-consuming and low-yield issues or solutions that may
not have impact on the results.

3.6 SIPOC: -

SIPOC is a process mapping technique that results in a diagrammatic representation

of all relevant components required to achieve an output matching customer
expectations. It also establishes the relationship between each element by placing
them in an appropriate sequence leading from the customer to the supplier.

“Eighty-five percent of the reasons for failure to meet customers expectations are
related to deficiencies in systems and processes…rather than the employee. The role
of management is to change the process rather than badgering individuals to do
better” – Dr. Deming on Processes.

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3.6.1 IMPLEMENTATION STEPS: -
 • Prepare a worksheet for SIPOC.
 • Begin with the Process. Map it in five to seven high-level steps.
 • Identify the Outputs of this Process.
 • Identify the Customers that will receive the Outputs of this Process.
 • Identify the Inputs required for the Process to function properly.
 • Identify the Suppliers of the Inputs that are required by the Process.
 • Optional: Identify the preliminary requirements of the Customers. This will
be verified during a later step of the Six Sigma measurement phase.
 • Discuss with Six Sigma Project team members.

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 CHAPTER 4

4.1 PRELUDE TO PRE-MATCHING TOOL:-

 Full Pair off: - A transaction in securities markets where off-setting buy and sell
trades are settled in cash, based on the difference in the prices between the off-setting
trades. No securities trade hands; instead the settlement difference between the trades
is calculated, and a money wire is sent to the appropriate party. Full pair-off means
netting of the two Similar ISINs having the nominal of the buy should equal to the
sell.

 Partial Pair off: - Partial pair-off means netting of a similar ISIN having the
nominal of the buy is not equal to the sell. The difference in cash & nominal is noted
for all the partial pair off trades.

 Individuals: - When there is only a single trade under an ISIN, or two trades
under the same ISIN having the same trade direction, then the trades have to settle
individually.

 Sheet Creation: - The trades dump have to be download from system called
Bloomberg which is trading system for front office. The trades dump have to be
download with base on settlement date as well as the closing date of trades which
should be same as particular settlement date. Then the trades have to be split in the
form of “Full, partial PO & individuals”.

For E.g.: - If the dump has taken for settlement date 10 Oct, 2013 then the closed
repo dump has to be taken for all those trades which have closing date as 10 Oct,
2013.

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 Pre-matching: - Pre-matching is the process where the trades details (Full PO,
Partial PO & Individuals) of ours and trades details of cpty should be reconcile
manually and need to find if there are any discrepancy on details, which have to be
corrected.

4.2 CHALLENGES & RISKS FACED DURING MANUAL PRE-MATCHING:-

While in initial the sheet creation used to be done manually, which used to consume
lot of time due to manual interventions. Once taking dump of all the trades from
Bloomberg system, the trades have to spilt then into “Full, partial PO & individuals”.
These trade splits are done on the base of ISIN and Nominal, according to which the
trades are split into different category “Full, partial PO & individuals”.

Once the trades are split the details have to be checked manually with cpty trades
details. However the risk was any trades in between could be missed by users and if
there are any minor discrepancy which may be difficult to find out on a high volume
days. And if the discrepancies get increase it can lead to last time amendment of any
trades details and which again lead to non-settlements of trades as all the trades have
its own cut-off in market. This may end up on cash damage or reputation damage.
And more it again brings more manual work for the team. As this is manual work,
there are more chance for typo error and chances of missed out.

4.3 TESTING OF PRE-MATCHING TOOL: -

After all brainstorming session and analysis by different diagrams. We have to test the
Macro which has been prepaid before bring it to Go-live. We have taken all the trades
details of ours as well cpty’s trades details and updated in macro and we have run the
macro.

There are so many defaults in testing the trades: -

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The macro had so many observations which we have found while testing the macro: -
 The macro doesn’t pop-up the difference between the cash amount, due to
which the amount for cash that has to be paid or receive didn’t match with the
cpty cash amount.
 The macro doesn’t notify the trades that are not match with the cpty details.
 And all the trades are doesn’t split in ascending or descending order, which
may again bring some manual work and it will be difficulty to compare the
details from human eyes.

4.4 RESEARCH TECHNIQUES: -

 We have used some logic formula in macro that brings more effective in the
macro and able to give more exact details & accurate information. We have
used “COUNTIF” formula to make macro identify the number of ISINs how
many times repeated, which can easily split the trades into different category
(“Full, partial PO & individuals”)

For e.g.: - The ISIN which are not repeated and exist only once on a particular
settlement date, then those trade has to be settle individual.

We have also added the function of “subtotals”, which make line all the trades based
on the ISIN. And it makes a subtotal of each trades of its Nominal & cash amount.
And also make the total sum of all the Nominal & cash, so that we can know that at
the end how much amount we will be receiving or paying. It also helps to calculate in
the partial PO amount for each trade.

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Before apply the “subtotal” function we have applied all the trades should be in
ascending order. So that it also make easy to subtotal and it will be clearly compare
and identify.

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4.5 GOING LIVE PRE-MATCHING TOOL: -

Now after all testing, improved all the findings and faults. Its time to Go-live the pre-
matching tool. Now the tool was ready to use on daily BAU effectively. Now the
users started using the tool on daily BAU and it resulted in well effective way. The
pre-matching tool resulted in easier and fast way of reconciles the trades’ details with
cpty trades. And it is easier to identify the mis-match between trades and all the
discrepancy. This is also able to convey the discrepancy easier to the cpty. The tool
resulted in saving manual work as well as the time.

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CONCLUSION:-

Optimal utilization of time increased efficiency, phenomenal reduction of

manual error are all the ultimate outcomes of the pre-matching tool. Lean helps
us visualize trends and track what we are doing.

Thus, by implementing such an innovative tool, we tend to become more

capable day by day and put smile on the face of our customers. And we have
achieved the purpose of the tool i.e. to reduce the manual intervention. Because
of the tools and techniques like brainstorming, 5 whys etc we succeed to collect
more ideas and implemented the same in pre-matching tool. The time was saved
a lot which help us to give the correct details to our clients on time and with
accurate details.

The tools were must supportive to identify the problem and issue happening in
the team as well as, we could find the solution for the same.

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 REFERENCES

For Article from www :

1. http://www.langevin.com/blog/2013/08/29/3-ways-to-maximize-
brainstorming/. “Brainstorming and its techniques”.

2. https://www.google.nl/search?q=wikipedia/ “For explanation & definition”

3. RBS references “To understand about lean & difference tools & technique”

4. https://www.google.com/ “For better pictures and meaningful words.

CURRICULUM VITAE

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 1. NAME : Arun Veera Balaji

2. DATE OF BIRTH : 11 August 1989

3. EDUCATIONAL QUALFICATIONS

2007.2010 Bachelor of Commerce (B.Com)

Institution : SRM University

4. WORK EXPERIENCE : 3 Years in RBS Business services

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