Document Management Bank of America

Document Management Bank of America - Reducing the Cost of...

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Reducing the Cost of Document Handling at Bank of America 1 Part A: Overview of the Strategy After reading this section, prepare responses for the following questions: 1. Rate the alignment of the Document Handling Sourcing Strategy with the Hoshin Plan for Bank of America’s Supply Chain Management, using the template in the handout. 2. Develop a list of five “universal elements” that are present in all of the major functional strategies within Document Handling? 3. Develop a list of five “major barriers” to implementation of these strategies. Five “major barriers” to implementation of these strategies. 4. Do you think you need to be an expert to be able to develop and execute a commodity strategy? Why or why not? Develop a list of five key skills that you think are important to become effective commodity managers? In the Beginning… In 2000, the Supply Chain Management function was initiated at the Bank of America, and Lisa Eversole, the new Senior Vice President was tasked immediately with rationalizing and establishing a supply chain strategy, developing a vision, and driving cost savings to the bottom line. In 2002, several immediate actions were initiated by the new Senior Vice President of Supply Chain Management, Lance Drummond; these involved establishing a strategic plan, developing a system of supplier scorecards, reviewing and understanding total spend by commodity, and developing a crisp process and consistent approach to measuring supplier performance and sourcing products and services. The strategic Hoshin plan for the organization is shown in Figure 1. Bank of America’s spend for document delivery was approximately $800 MM in 2002, with about 7-8% directed with minority owned suppliers. In 2000, the bank also began building a team of supply management professionals to develop new strategies for major commodity families, in an effort to begin to consolidate and leverage major spend items to reduce costs and improve the profitability of Bank of America. One of the first major commodity families analyzed was document handling. B of A’s spend for document delivery was approximately $700 MM ($350MM Postage) in 2002, with about 7-8% directed with minority owned suppliers. The bank chose a unique approach to documents and created a department named Document Management which was charged with oversight for the entire life cycle of documents, from conception to end of life functions like archiving, recycling and 1 This case study was developed by Robert B. Handfield, PhD , (NC State University College of Management) Robert Kee and Leonard Hilliard (Bank of America). 1
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confidential destruction. This group approached reducing the end-to-end cost of documents through a methodology that began with capturing the document in a digital library that is tied to a relational database that stores the pertinent approval and manufacturing specifications of that document. Around that dual database, the Document Management (DM) group wrapped a disciplined change control process that
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Document Management Bank of America - Reducing the Cost of...

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