Project Story Board

Lean Six Sigma Black Belt

 DEFINE PHASE Storyboarding
Quick Win Opportunities
Background
Quick Win Easy To Reversible Fast To Within Cheap To
 The “Home Loan” Lean Six Sigma project was initiated because Implement Implement Team’s Implement
the Global Consumer Home Loan division was performing well Control
below customer expectations Customer to mail Yes Yes Yes Yes Yes
application directly to
Project Description LP
Gather additional Yes Yes Yes Yes Yes
 Simco International has declined from being the 3rd largest financial information from
services provider to the 6th in the world. Lean Six Sigma teams were Customer via phone
formed to address this issue. On investigation, it was learned that
poor Customer Service is the primary reason for this decline.
SI CTQ Determination
Business Case
Segment Customer Issue Customer Need CTQ
 By increasing customer satisfaction, SI will be able to re-capture External It takes too long to Reduce loan 15 day loan
market share and ultimately increase revenues while improving process loans processing processing
business process efficiencies cycle time cycle time
External There are too many Reduce errors on final 100% accuracy
errors on the final determination on final
Problem Statement determination packages package determination
 It takes 22 days for SI to process new home loans while package
competitors take 15 days. This does not meet CTQ performance External It is very difficult to reach Contact with SI 100% first call
and has led to loss of revenues of $26.2 million and $2.6 million in anyone at SI personnel on first call contact
process inefficiencies per year. Internal No clear roles and Responsibilities and 100%
responsibilities to who roles clearly defined documentation
Project Goals owns the loan process and documented of roles and
 Reduce home loan processing time by 37% to 15 days within 3 responsibilities
Internal Too much time is spent Reduce time to review 2 day loan
months. reviewing the application loan application reviewing time
 Reduce process inefficiencies by 50% within 3 months.

Project Scope Conclusion

 Area of Focus: Consumer Home Loan processes in Singapore,  Project teams were constituted based on Individual Profile and
Chicago, and London Team Profile Evaluations
 Start Point: When Customer requests a Loan  The SIPOC and the As-Is process was mapped to understand the
 Stop Point: Receipt of the home loan acceptance or rejection process.
package by the Customer  Quick win opportunities were identified and implemented
 A Stakeholder Management Plan was developed based on the
Financial Benefits Stakeholder Map
 Increased revenues by $20 million and reduced process costs by  A Communication Plan was developed to keep Stakeholders
$650,000 informed
 Responses to VOC questions determined the CTQs

Copyright © 2009 Acuity Institute LLC. All rights reserved.

 MEASURE PHASE Storyboarding

Histogram Baseline Performance

Chicago Final Determination Package Accuracy
Chicago Loan Processing Cycle Time 240 loans, 72 defects, 7 critical data fields
50 DPMO = 42,857; Sigma Performance = 3.2
40
30 LSL
USL
= =
10 15 Singapore Total Cycle Time
20
10
10 8
0 6
20.0

24.3

28.7

33.0

37.4

41.7

46.0

50.4

54.7

59.0

63.4

67.7

72.1
4
2
0 0 0
n dl iCv iydcul ea lTs i: mS ei n g a p o r e T o ta l C y c l e T i m e

1. There was no data set less than the CTQ of 15 days

13

16
17

20
21
22

25
26
10
11
12

14
15

18
19

23
24

27
4
5
6
7
8
9
2. The p-value of zero indicates that the curve is not normal
3. There is a large amount of spread in the variation of cycle time Process Capability
Ppk = -0.03
4. Two loans took considerably longer time to process than the rest
The Singapore Home Loan process is not capable of meeting
35.00 customer requirements 30
30.00 Mean
25.00 6 CL:
20.00 15.42
15.00
10.00
5.00 1
0.00

18
M R : S i n g a p o r e T oI ta

15.00
11.00
5
7.00
3.00 0
-1.00

Conclusion: The process is not in statistical control because 4 out of 5 data points are on the same side of the centre line which is indicative of
special cause variation. Singapore Home Loan process is not capable of meeting customer requirement

Copyright © 2009 Acuity Institute LLC. All rights reserved.

 ANALYSE PHASE Storyboarding

Cause and Effect Analysis Lean Process Analysis (As-Is)

Lead Time = 19 days
Average Work Completion Rate = 4
Process Cycle Efficiency = 5%

Box Plot

80

70

60

50

40

Pareto Chart
30

30 100%
20
25 80%
20 10
60%
Number of Errors

15
40%
10 0
5 20%
0 0%
Loan #

State
Name

Loan Duration
Address

City
Loan Amount

Conclusion
1. “Loan Amount” and “Name” fields account for 86% of the final
loan determination package errors.
2. Chicago Office has the highest averages and outliers
3. Chicago and Singapore have significant variation in the data
Application Fields 4. London variation is below both Chicago and Singapore and is
below the CTQ of 15 days

Copyright © 2009 Acuity Institute LLC. All rights reserved.

 M e a n O p tio n s - C h ic a g o L P C y c
ANALYSE PHASE Storyboarding
12
10

24.0

Singapore Total Cycle Time

8
6
4
Wednes da Thurs day Friday f(x) = 1.2 x + 7.83
y
Day - LP Staffing: Overstaffed 19.0 R² = 0.47

14.0

9.0
12
10
8 4.0
6 1.00 3.00 5.00 7.00 9.00 11.00
4 Singapore LP Cycle Time
Monday Tuesday Wednesday
Day - LP Staffing: Understaffed
A possible positive correlation exists between the Singapore LP
Cycle Time and Total Cycle Time

Validated Root Causes

Regression Analysis
1. The regression analysis proved that 47% of the variation in Root Cause Tool Used
Singapore Total Cycle Time is Accounted for by the LP Cycle Time Non Value-Added Process •Lean Process Analysis
2. P-Value is less than 0.5, the two data sets are statistically different Steps
2 Sample t-Test Staffing numbers not •Cause and Effect Diagram
3. P-Value = 0; this implies that there is statistical difference between aligned with Peak Volume •Multi-vari Chart
the “Ave Chicago LP Cycle Time” and “Ave London LP Cycle Time” Incoming Applications are •Cause and Effect Diagram
4. The average of the Chicago LP Cycle time is considerably higher inaccurate •Process Map
than that of London No process controls •Cause and Effect Diagram
ANOVA •Process Map
5. P-Value is less than 0.5 implies that at least one set of means are not Too much inter- •Lean Process Analysis
equal departmental processing •Box Plot
6. Ave Chicago LP Cycle Time is different from that of London and time •Correlation Analysis
Singapore •Regression Analysis
Chi-Square Test •2 Sample t-Test
P-Value is less than 0.5 which indicates that Loan Accuracy between •ANOVA
Chicago and London locations are statistically different

Copyright © 2009 Acuity Institute LLC. All rights reserved.

 R u n C h a r t: C h ic a g o L o a n P r o c e s s in g C y c le T im e (C T Q = 1 5 D
IMPROVE PHASE Storyboarding
Solution Selection Cost/Benefit Analysis
Having prioritized solutions from generated ideas, we arrived the following solutions through Gross Benefits – $6.5 million (approximate)
the solution prioritization matrix:
Implementation Cost – $376,200
1. Have Loan Processors determine loan qualification
Net Benefits - $6.1 million (approximate)
2. Develop email/internet based system to exchange information and eliminate paper work
3. Combine LP and MSA processes to eliminate MSA from loan processing Mitigating Risk: Summary of FMEA
Potential Failure Mode RPN Recommended Action
4. Develop online application submission with mandatory fields and accuracy checks
System does not accept 243 1. Auto notification of system
application down
2. Manual submission of
15
13
application
Mean:
11
8.98 Loan is incorrectly 81 Internal audit, document
9
7
denied procedures
5 Final package is not 27 Add procedure for mailing,
sent internal audit

Sigma Performance for Chicago Final

Determination Package Accuracy
Defects = 5; Units = 30; Opportunities = 7;
DPMO = 23,810; Sigma = 3.48
Conclusion
Chicago Loan Processing Cycle Time (CTQ = Chicago LP Loan Reviewing Time (CTQ = 2 1. The performance of the Chicago Final
15 Days) Days) Determination Accuracy improved from 3.2 to
12 3.48
30 2. The Chicago Home LoSan Processing cycle
10
time did not meet CTQ of 15 days. One loan
8 took longer than 15 days to process.

Frequency
20
6 However, there is an improvement.
4 3. Chicago LP Loan Reviewing time did not
10
meet CTQ 2 days. Three loans took longer
2 than 2 days to review.
0 0
Next Steps
1.00

2.00

3.00

4.00
11
12

16
5
6
7
8
9
10

13
14
15

17

4. Review process to determine cause of

accuracy defects
Chicago Loan Processing Cycle Time Chicago LP Loan Reviewing Time 5. Determine why the single loan did not meet
Count = 50; Mean = 8.980; Stdev = 2.290; Range = 11.00 Count = 50; Mean = 1.520; Stdev = 0.614120; the 15 day loan processing cycle CTQ
Minimum = 5; Maximum = 16; Q1 = 7; Median = 9; Q3 = 10 Minimum = 1; Maximum = 3; Q1 = 1; Median = 1; Q3 = 2 6. Investigate issues with loan reviewing time.
Anderson-Darling Normality Test: Anderson-Darling Normality Test: Could it be with learning new technology?
A-Squared = 0.844441; p-value = 0.0276 A-Squared = 6.341; P-Value = 0.0000

Copyright © 2009 Acuity Institute LLC. All rights reserved.

 R u n C h a r t : C h i c a g o L P LR ou an n C Rh ea vr it e: wC ihn i gc a Tg i om Le o ( aC nT QP r =o c2 e Ds sa iyn s g) C
CONTROL PHASE PHASE Storyboarding

Chicago Loan Processing Cycle Time (Sigma = 3.48)

15
13

Chicago Loan Processing Cycle Time (CTQ = 15 Days)

Mean:
11
8.98
9
7
12 5

Mean = 8.980
10 Stdev = 2.290
N = 50
8

6
3
3
4 2
Mean:
1.52
2
1

0
11

12

14

15
5

10

13

16

17
N u m b e r o f E rro rs (C T Q = 1 0 0 % A c c u ra c y )

Chicago Loan Processing Cycle Time (Sigma = 3.48)

Chicago Loan Reviewing Time (Sigma = 3.05)

4 100%
3 Conclusion
80%
3 1. The process monitoring plan was introduced to ensure that process
2 60%
2
remains in control and is stable
40%
1 2. Process Reviews have been instituted on a monthly basis
1 20%
0 0% 3. The Dashboard which represents the new Baseline Performance
Loan Addres s Name City Loan # Loan State was developed and presented
Amount Duration
4. Procedures was documented and handed over to Process Owners
Loan Fields (CTQ = 100% Accuracy) 5. The Response Planning procedure was developed and handed
over to Process Owners
6. The solution transfer plan was also developed. The materials
included all project outcomes, project binders, process monitoring
plans and training materials

Chicago Final Package Determination Package Accuracy

(Sigma = 3.48)

Copyright © 2009 Acuity Institute LLC. All rights reserved.