The problem
Where the time was going
A global auto finance company, operating in more than 22 countries with around 1,200 employees and over $25 billion in assets, set out to stay ahead of its customers' expectations. Customer surveys, paired with the company's wish to capture more of the market, pointed to one conclusion: service had to get faster.
The volume of credit applications was bogging the process down. Customers and management alike wanted quicker, more reliable decisions, and the surveys named three priorities, application turnaround time, access to credit managers, and predictability of decisions. Middle management turned to process simulation to solve it.
What we modeled
Mapping the process, then testing the fix
Because customers cared most about the originations, or credit, area, a cross-functional team modeled that process as it really ran, from a dealership emailing an application, through data entry and a credit-bureau check, to a credit manager approving or declining and emailing the decision back. To keep it tractable, the team focused the model on turnaround time and the use of credit managers.
Management had already brainstormed ideas, such as aligning credit managers' hours with customers' and combining the prime and subprime teams, and the model let them test those ideas rather than guess. Two scenarios were compared: regional teams aligned by time zone, and a pod model that matched credit-manager schedules to sales-force coverage while combining the prime and subprime managers.
The result
The proof, and the payoff
The work also sharpened the team's discipline. Early time estimates fed into the model turned out to be inaccurate and had to be replaced with precise stopwatch readings, and the model proved able to handle whole dimensions of the process, including the elaborate shift schedules of the underwriters.
The pod model was the winner: it cut application turnaround time by 58 percent and increased how fully credit managers were used. The simulation let the company understand and improve the process in record time.
Part of our work in services.