Models for improving team productivity at the Federal Reserve Bank

To compete with other check-processing services, the Federal Reserve Bank (FRB) needs new mechanisms for providing low-cost, high-quality service to its customers. Specifically, the FRB must have the right supply of workers at the right time to handle uncertain check arrivals and complete processing them on time. We developed one deterministic optimization model and one simulation model that are valuable for managing teams. The first model, corroborated by a pilot study, confirms that the FRB can achieve higher productivity by changing from a serial-line configuration to a team structure. The second model enables managers to configure different team and their work schedules effectively. The FRB in Los Angeles used these two models as a planning tool in reconfiguring its check-processing unit in 2000. Implementing these two models at the Los Angeles branch of the FRB saves $1 million annually and increases productivity by 24.3 percent.