Eliminating Non-Value Added Activity
Case Study #2
Client:
Industry: Financial Services
Business units affected: Loans and Marketing/Sales
Description of the problem situation:
The client had an automated process allowing them to process point-of-sale automobile loans for applicants.
There was a high percentage of loan defaults associated with the process.
The cost of delinquency rates increased beyond control limits.
There were in-house delays in processing point-of-sale automobile loans, which prevented the client from taking advantage of the "point of sale" opportunity. The delays created a low "success rate" with the automated loan applicants.
Steps used to resolve the problem:
The loan process was documented and the through-put time was calculated.
The automated loan activity was measured in terms of volume, hit rate, defaults, and customer segmentation.
The marketing plan and the sales forecasting were reviewed to identify targets and achievement of the goals.
The respective processes and the data were analyzed for improvement opportunities and a change strategy was developed.
Benefits realized by the client:
Marketing and Sales targets were established, and data is available for analysis
to enhance future decision-making and to improve sales and marketing goals.
In the Loan department, "priority" loan applications were placed on a "fast track" for processing and approval.
The client was in a position to forecast loan success rates more accurately and the number of default loans were reduced.
