Question

Numerous factors affect Productivity. Typically they can be categorized into methods, capital, quality, technology, and management. Select a specific organization and describe a situation where one of factors mentioned previously had a significant impact. Why was this factor important? What was done correctly in this situation? What could have been done better? What lessons did you gain from this situation?

Answer 1

The organization that I am taking an example of is that of a lending institution, specializing in giving car loans. This organization is located in India and it started its operation in 2012. Since its inception, the loan processing method has been largely manual, although a loan originating software was in place. But due to inexperience in the team, everything was done on papers as well which resulted in duplication of work. Being in the service industry, turn-around-time was of critical importance and how fast a firm conveyed to the customer about the decision regarding loan was the deciding factor in capturing business. Since the credit appraisal was of key importance to the company as well, hence no amount of lax could be tolerated in the processing of the loan either.

The process of loan processing was as follows

• Customer approaches financier sales person stationed at car dealership
• For loan request, customer deposits KYC documents as well as income documents
• Physical documents of all customers FedEx to central operations team
• Documents scanned and uploaded in loan originating software
• Credit evaluation commenced
• Credit decisioning done
• Decision conveyed to sales located in dealership
• Decision conveyed to customer by sales

This entire process took close to 3 days from the time customer deposited his loan documents till the loan decision was conveyed to the customer by sales person.

There were several bottlenecks in the process. It took one day just to receive the customer documents from dealership to operations floor. Decision being conveyed to sales and then to the customer also was not effectively managed. With the industry average of 9-10 business hours, the said company was far behind and hence it was losing customer share.

With the introduction of technology, however, the entire scenario changed and exponentially increased the company’s productivity.

The customer document were scanned and uploaded at the dealership location only. Operations team would receive a mail notification that a new application has been logged in and immediately start its work. The credit report of the customer was automatically generated based on a fingerprint biometric taken at the dealership location. The loan decision was taken within a few hours. The decision was conveyed to the customer directly through an SMS and even this was automated. With this, the TAT was reduced from 3 days to 4 hours. The company took dealership penetration as a key measure of its success. With the introduction of technology, the pan India penetration raised from average 13% to a whopping 78% by April 2017, over a period of 2 years.