Transforming payment processing through lean and kaizen management : A Malaysian public service perspective
DOI:
https://doi.org/10.32890/gbmr2025.17.1.4Keywords:
Kaizen, Lean Management, Lead time, SLA Performance, Value Stream MappingAbstract
Lean management has emerged as a transformative methodology for optimizing operational efficiency and reducing waste in various sectors. However, its application within public office environments, particularly in payment processing services, remains underexplored. This study investigates the implementation of Lean and Kaizen methodologies in a Malaysian Government-Linked Company (GLC) responsible for payment processing. Lean management focuses on eliminating waste and optimizing processes, while Kaizen is a continuous improvement strategy that enhances operational efficiency through incremental changes. The study highlights significant inefficiencies in service delivery, with Service Level Agreement (SLA) performance scores fluctuating between 54.68% and 95.16% from January to July 2020, indicating an urgent need for process optimization.Using Value Stream Mapping (VSM), Kaizen burst events, and structured problem-solving techniques, the study identifies key bottlenecks in file movement, verification, and approval processes. VSM is a Lean tool that visualizes and analyzes workflows to detect inefficiencies and streamline operations. Through targeted Lean interventions, the organization successfully achieved a minimum SLA performance threshold of 82%, demonstrating improved workflow efficiency, reduced lead times, and enhanced employee engagement. The findings emphasize the potential of Lean and Kaizen in optimizing administrative processes in the public sector, advocating for wider adoption and further empirical research in this domain.
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Payment Verify Voucher High waiting time at Verifier level W, I, T processing team 6. Payment Approve Voucher Long lead time to approver level W, I, T processing team Notes: W Waiting time I Inventory E Extra processing T Transportation Global Business Management Review: Vol. 17 Number 1 June 2025 12.0 APPENDIX B Kaizen Burst Root Cause Analysis (a) KAIZEN BURST 1 – ROOT CAUSE ANALYSIS: LONG LEAD TIME TO PRINT APPROVAL LETTER IN PROCESSING TEAM NO ROOT CAUSE COUNTERMEASURES 1. Low handover frequency • Receive list of approved Critical files/cases only • Print approval letter for postage only (physical 2. High volume per batch & file is directly submitted to Payment processing bottleneck - result in high waiting team without physical approval letter) time 3. Highly dependent on one staff 4. No differentiation in the type of cases because the staff only focus on finishing the task without prioritizing cases (b) KAIZEN BURST 2 – ROOT CAUSE ANALYSIS: DELAY IN PERFORMING FILE MOVEMENT ENTRY IN THE SYSTEM TO PAYMENT PROCESSING TEAM NO ROOT CAUSE COUNTERMEASURES 1. Low handover frequency The preparer will send the physical Critical files to the payment processing team as soon as possible. 2. High volume per batch The senior preparer will prioritize the Critical files and promptly initiate the file movement in the system to the payment processing team. 3. No differentiation in type of cases The Critical files are tagged with red paper. (c) KAIZEN BURST 3 – ROOT CAUSE ANALYSIS: LONG TIME TAKEN TO DISTRIBUTE Critical files TO PREPARERS Global Business Management Review: Vol. 17 Number 1 June 2025 NO ROOT CAUSE COUNTERMEASURES 1. No differentiation to facilitate Implementation of "Red Tag" for Critical files (visual identification management) 2. Low handover frequency Implementation of Last In First Out (LIFO) with top priority level 3. High volume per batch Movement of Critical files on a "per file" basis 4. Lack of monitoring on status of l End-of-day queue checking as per the system MDP case l Weekly monitoring of performance for all sub-SLAs (d) KAIZEN BURST 4 – ROOT CAUSE ANALYSIS: LONG LEAD TIME FOR PREPARER LEVEL NO. ROOT CAUSE COUNTERMEASURES 1. No differentiation to facilitate Implementation of "Red Tag" for Critical files (visual identification management) 2. Low handover frequency Implementation of Last In First Out (LIFO) with top priority level 3. High volume per batch Movement of Critical files on a "per file" basis 4. Lack of monitoring on status of l End-of-day queue checking as per the system MDP case l Weekly monitoring of performance for all sub-SLAs (e) KAIZEN BURST 5 – ROOT CAUSE ANALYSIS: LONG LEAD TIME FOR VERIFIER LEVEL NO. ROOT CAUSE COUNTERMEASURES 1. No differentiation to facilitate Implementation of "Red Tag" for Critical files (visual identification management) Global Business Management Review: Vol. 17 Number 1 June 2025 2. Low handover frequency Implementation of Last In First Out (LIFO) with top priority level 3. High volume per batch Movement of Critical files on a "per file" basis 4. Lack of monitoring on status of l End-of-day queue checking as per the system MDP case l Weekly monitoring of performance for all sub-SLAs (f) KAIZEN BURST 6 – ROOT CAUSE ANALYSIS: LONG LEAD FOR APPROVAL OF MDP CASE NO. ROOT CAUSE COUNTERMEASURES 1. No differentiation to facilitate Implementation of "Red Tag" for Critical files (visual identification management) 2. Low handover frequency Implementation of Last In First Out (LIFO) with top priority level 3. High volume per batch Movement of Critical files on a "per file" basis 4. Lack of monitoring on status of l End-of-day queue checking as per the system MDP case l Weekly monitoring of performance for all sub-SLAs Global Business Management Review: Vol. 17 Number 1 June 2025 13.0 APPENDIX C Spaghetti Diagram – Kaizen Burst 4, 5 And 6 Global Business Management Review: Vol. 17 Number 1 June 2025 14.0 APPENDIX D Proposed kaizen solution No Process Problem Causes Proposed Kaizen Solution 1. Step reduction (from 6 1. Low handover to 4) frequency 2. Received list of 2. High volume per approved Critical batch files/cases 3. Delay in submission 3. Print approval letter for to payment processing postage purposes team Long lead time to PRINT APPROVAL print approval 1 4. Submit the physical file LETTER letter in 4. Inefficient working directly to the payment processing team method processing team without an approval letter 5. Lack of knowledge in utilizing technology 5. Stack and staple the letter 6. Submit the printed letter to staff handling postage 1. Senior clerk will PERFORM FILE 1. Low handover prioritize red-tagged Delay in MOVEMENT frequency Critical files first and will performing file ENTRY IN THE perform file movement in movement entry 2 SYSTEM TO the system to the payment in the system to PAYMENT 2. High volume per processing team as soon as payment PROCESSING processing team batch possible. TEAM Global Business Management Review: Vol. 17 Number 1 June 2025 3. No differentiation in 2. Clerk will send physical type of cases Critical files with red tags as soon as possible to the payment processing team. 1. Low handover frequency 2. High volume per batch 1. Critical files will be tagged in red color. 3. Critical files are homogeneous Long time taken 2. Red-tagged Critical files DISTRIBUTE FILE to distribute 3 will be given priority for TO PREPARER Critical files to 4. Lack of monitoring immediate processing. Preparers 5. No differentiation in 3. Distribution of red-type of cases tagged Critical files will be done on the same day they are received from the processing team. 6. Transport Critical files 1. High volume per 1. Red-tagged Critical files batch will be prioritized and Long lead time distributed to the DATA ENTRY IN 4 for preparer preparer. THE SYSTEM level 2. Last in, first out for file retrieval Global Business Management Review: Vol. 17 Number 1 June 2025 2. The preparer will process red-tagged Critical 3. Low handover files first. frequency at the preparer level 3. Payment processing team’s Admin Unit will 4. Bottleneck at walk through the certain processes preparer's table every hour to collect red-tagged Critical files and distribute 5. Lack of monitoring them to the verifier. 6. No differentiation in type of cases 7. Issues with SLA calculation 1. Low handover 1. Critical files will be frequency tagged with red color for identification. 2. High volume per batch 2. Red-tagged Critical files will be prioritized for processing. 3. Bottleneck at Long lead time 5 VERIFY VOUCHER certain processes for verifier level 3. Payment processing team’s administrator will 4. Critical files are monitor the movement of homogeneous Critical files, giving each process one hour to complete. 5. Lack of monitoring 4. End-of-day monitoring to ensure Critical files are Global Business Management Review: Vol. 17 Number 1 June 2025 6. No differentiation in verified and approved on type of cases the same day. 1. Low handover frequency 1. Critical files will be red-tagged for easy identification. 2. High volume per batch 2. Batch size will be reduced—Critical files will Long lead time 3. Lack of monitoring be distributed to the APPROVE 6 for approver Approver as soon as the VOUCHER level Reviewer completes their 4. No differentiation in review. type of cases for easy identification 3. Supervisor will perform end-of-day queue checking via the system to identify outstanding Critical files.
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