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Quick Glance Case Study: Customer Compensation

“Having the customer in the forefront of our minds has helped us to really think about value and how it can support us in delivering a first class service”

After completing a ChangeWise Lean Practitioner training course, one candidate submitted the following work-place project to gain their qualification to LCS Level 1c.

The Business Challenge

Resolving compensation claims was costing our organisation £300k of expenditure. It was also apparent that the customer journey was not as good as it should have been; specialists were visiting properties following customer complaints, but were unable to resolve issues on site. This resulted in long wait times as issues were passed to other departments for assessment.

In addition to an unsatisfactory customer experience, the process was adding significant unnecessary time and cost.

A Lean review was required to address the issues, improve the customer experience and reduce expenditure.

Photo by Earl Wilcox on Unsplash

Key people involved from client site

A strategy group including Subject Matter Experts and members of the Senior Leadership Team were involved in the various elements of solution delivery.

Lean Methodology Employed

DMAIC (Define, Measure, Analise, Improve, Control)

Various Lean methodologies were used including, Current State Mapping, Waste Analysis, Value Analysis, Future State Mapping and Root Cause Analysis.

Lean Activities

Failure Demand

As a team, we examined the compensation claims by category. This revealed that a striking 53% of all claims were the result of a specific issue. Using Lean techniques, we looked at this exclusive issue in more detail to help us identify and understand the root cause of the failure. From this analysis, we were able to uncover a specific fault within the product.

End-to-End Process

Using Current State Mapping techniques, we mapped out the activity steps for both in-hours and out-of-hours resolution processes. With the customer at the forefront of our minds, we used Value Analysis to understand where non-value-add activities exist:

  • Only 34% of the in hours process was value-add
  • Only 29% of the out of hours process was value-add

Future State and Benefits

Using the 7 Wastes methodology, it was clear that a great deal of waste was due to overproduction. Simply stopping a number of non-value add steps would significantly improve the process and over-processing:

  • In-hours value-add processes would increase from 34% to 44%
  • Out-of-hours value-add processes would increase from 29% to 47%

In order to shrink the volume of hand-offs and reduce the customer wait times for issue resolution, we agreed that in the future state, items raised would go straight to the department responsible for carrying out the work.

Benefits and cost reduction plans were put in place to track and monitor Lean savings on a monthly/quarterly basis:

  • Estimated savings end of year 2: Circa 142k
  • Estimated savings end of year 3: Circa 226k

Photo by Amy Shamblen on Unsplash

In Summary

The Lean review has delivered a significant reduction in compensation claims, and drastically improved our customer experience. Most of this has been achieved by simply removing non-value add steps in our process. We were also able to use Lean techniques to pinpoint the major cause of our failure demand, allowing us to focus on where the biggest savings could be realised. Having the customer in the forefront of our minds has helped us to really think about value and how it can support us in delivering a first class service to our clients.

If you need advice on how Lean can help to manage and reduce compensation costs within your organisation, contact us at and let’s talk about how we can help.

ChangeWise believes employee engagement is the foundation for successful Change. Training and coaching your people to use simple continuous improvement techniques will enable your organisation to continuously adapt and stay ahead in a constantly changing and challenging environment.

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