Global Financial Corporation (GF) a subsidiary of Global Equipment Company (GEC) is tasked with handling financing for those customers who wish to purchase GEC heavy equipment.
Currently GF only processes 51% of the leases within the “10 days or less” time frame, with some loans taking up above 41 days. Ms. Rodriguez, the Vice President of GF has been directed to decrease loan processing time to 10 days or less with the current staff she has.
The current structure of the analysis and evaluation stage does not maximize staff time effectively and as a consequence creates a bottleneck in the process.
We recommend switching to a case manager structure. lLan applications can be processed and completed in approximately 3 days. This would allow for an increase in volume to 255 without adding staff (assuming 60% are remain new applications), which is a 16.9% increase, exceeding the 10% anticipated application increase.
Background
Global Financial Corporation (GF) a subsidiary of Global Equipment Company (GEC) is tasked with handling financing for those customers who wish to purchase GEC heavy equipment. Due to the expense of the equipment many customers chose to finance the purchase with a lease agreement. Currently these loans are processed at GF Bakersfield location, which employs 14 people. A competitor of GEC has promised processing of financing in “10 days or less”. Currently GF only processes 51% of the leases within the “10 days or less” time frame, with some loans taking up above 41 days. Ms. Rodriguez, the Vice President of GF has been directed to decrease loan processing time with the current staff she has.
Problems
The Bakersfield office is operating at only 86% of capacity utilizing 2990.5 hours of processing time (full capacity 3485 hours). In October they processed 218 applications, 89 were standards and 129 were News. The analysis by region shows that Region 1 is handling the most applications at 78 (52 new, highest number among the different regions), averaging 126.7 hours which, equates to 20.1 days. Region 2 is only handling a total of 66 applications (35 new) with an average processing time of 5.7 days, and Region 3 handling 74 applications (42 new), averaging 8.7 days. The Northeast office handles about 35% more applications with essentially the same staff. Only 51% of the applications are processed within the 10 day or less requirement.
Analysis of the Current Processing Steps
1. Analysis and evaluation stage is a single channel, interest rate multi channel, loan terms single channel, and final issuing a multichannel. (Exhibit A)The current structure of the analysis and evaluation stage does not maximize staff time effectively and as a consequence creates a bottleneck in the process. With the single channel structure loan applications are unevenly distributed among teams and create higher idle time for teams with less volume of loan applications to process. Utilization among regions varies greatly between 73% – 95%. The following observation of the current structure was achieved using the MMK model (See exhibit B):
* Expected wait time in the system for an application in Region 1 is approximately 37 days, with actual processing time of 14.10 hours. This is where the bottleneck occurs as it takes the evaluation team over 16 days out of the 37 to perform the review of 78 applications. * Expected wait time in the system for an application in Region 2 is approximately 11 days, with an actual processing time of 13.40 hours. Of the three Regions, Region 2 processed the least applications of 66 during the quarter being reviewed. With a utilization rate of 73%, Region 2 experienced the most idle time in the evaluation process.
* Expected wait time in the system for an application in Region 3 was approximately 15 days, with an actual processing time of 13.56 hours. With utilization rate of 84%, this Region has the ability to handle an increase in applications. * Each region utilized over ten days of average time in system and showed bottlenecks.
2. Interest rate stage is a multi channel process and is working effectively. Applications are processed quickly and are usually turned over to the next step within 30 minutes. The utilization rate is consistent at 64%, which means that this staff member can continue to devote only half of his time to this task.
3. Loan terms stage is a single channel and has similar issues as the analysis and evaluation department. It creates bottleneck and work is unevenly distributed.
4. Final issuing stage is an effective multichannel process with a consistently high utilization percentage. Each application takes less than 4 hours to process and utilizes time consistently at 93% of capacity.
Alternatives
Redistribute the staff to eliminate the bottlenecks in the process. Automate the input of information into a computer database at the sales level eliminating duplicate entry. * Generic queue would decrease processing time to 9 days. Evaluation will drastically reduce to 2 days of processing, increasing utilization and reducing idle time. Active time in the system will be reduced to 13.72 hours. Change all stages to a multiple, multiphase channel (Exhibit C &D). There would still bottleneck from the evaluation stage.
* Case manager would increase active time of application to 18.5 hours; however, significantly reduce queuing time to approximately 3 days. This is assuming there are no teams during the evaluation stage and that the average time would double to 9.5 hours, which may not be the case. Change to multiple channel – assignment – multiphase. (Exhibit E &F) Eliminate bottleneck, service rate of 22.2 per FTE, per quarter.
Recommendation
We recommend switching to a case manager structure. This would mean that one person will be responsible for the completion of a loan application (Exhibit E). This will provide for most efficient way to minimize idle time and maximize utilization rate. Loan applications can be processed and completed in approximately 3 days. This would allow for an increase in volume to 255 without adding staff (assuming 60% are remain new applications), which is a 16.9% increase, exceeding the 10% anticipated application increase.
Remember! This is just a sample.
You can get a custom paper by one of our expert writers.
Get your custom essay
Helping students since 2015
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download
