Business Process Management CORE PROCESSES: Customer Acquisition Order Confirmation Employee Development Underwriting Collections 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: 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 friendly processing must be balanced with Quality Decisions SPEED = 3 hours We believed Quality Decisions = Quality Result Quality Decisions at high costs and slow speed 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… Process Analysis: Root Causes: 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… 1st Set of Solutions: Lite Doc Program Revamped Work Flow Next Generation of Improvements: Fully Matrixed Underwriting Process Department Reorganization Reduced Cycle Time by 33% (3.46 days) Sigma rating increased from 1.6 to 2.1 Cost Savings of $400,000 annually Changed our view of the customer Reduced Cycle Time by 48% dropping it to 1.81 days Sigma rating increased to 3.0 Increased Capacity Improved Teamwork