Business Process Management CORE PROCESSES Customer Acquisition Order

Business Process Management CORE PROCESSES: Customer Acquisition Order Confirmation Underwriting Collections Employee Development UNDERWRITING SUB PROCESSES: Application Input Preliminary Decision Verification Final Decision Document Preparation OBJECTIVE: § Identify & Focus on High Impact / Low Performing processes § Scope for Success § Financial Impact

Problem Statement – In 2000 US Consumer accelerated the centralization of Real Estate approvals. The time it took from receipt of application to preliminary decision was excessive in the eyes of the customer (stores and end customer). Stats: l Cycle Time: 5. 15 days on average

Define / Measure… What’s Important to the Customer (Voice of the Customer)? We found out … Speed and user We believed Quality Decisions = Quality Result Quality Decisions at high costs and slow speed friendly processing must be balanced with Quality Decisions SPEED = 3 hours What to measure? Cycle Time • Operational Definition: Date and time Branch faxes initial doc to Date and time prelim decision is communicated to Store • Defect = Greater than 3 hours • Sigma = 1. 6 – 242 defects out of 555 opportunities sampled Defects

Analysis… What are the significant root causes of our inefficiency? • Process Analysis: – 92% of cycle time was non-value added • 49 minutes to deliver fax to analyst • 95 minutes before analyst first contacts branch • Documents can sit in pending up to 4 days • Root Causes: Staffing Levels at Branch & LRAD

Solutions / Results… 1 st Set of Solutions: Reduced Cycle Time by 33% (3. 46 days) ü Lite Doc Program ü Revamped Work Flow Sigma rating increased from 1. 6 to 2. 1 Cost Savings of $400, 000 annually Changed our view of the customer Next Generation of Improvements: – Reduced Cycle Time by 48% ü Fully Matrixed Underwriting Process ü Department Reorganization dropping it to 1. 81 days Sigma rating increased to 3. 0 Increased Capacity Improved Teamwork