1. Suppose Billy's Hamburger Barn redesigns the process there are now two attendants. The first attendant takes the order. Once this step is finished, the first attendant then takes the money while the second one gathers up and bags the food. Because two of the process steps can now run in parallel (gathering the food and taking the money), what is the new minimum cycle time? What is the longest cycle time? What potential problems could arise by splitting the process across two individuals?
2. Faircloth Financial specializes in home equity loans, loans that customers can take out against the equity they have in their homes. ("Equity" represents the difference between the home's value and the amount a customer owns on any other loans.) The current process is as follows:
- The customer downloads the loan application forms from the Web, fills them in, and mails them to Faircloth (three to five days).
- If there are any problems with the forms (and there usually are), a customer sales representative calls up the customer and reviews these problems. It may take one to two days to contact the customer. After reaching the customer, resolving the problem can take anywhere from5 minutes to 30 minutes. If the customer needs to initial or sign some new forms, it takes five to seven days to mail the forms to the customer and have her send them back.
- Every Monday morning, the customer sales representatives take a batch of completed, correct application forms to the loan officers. This means that if a correct loan application comes in on Tuesday, the soonest it can get to a loan officer is the following Monday. The loan officers then take two to three days to process the batch of loans, based on information on the forms and information available from credit rating bureaus.Customers are advised by e-mail and regular mail regarding the final decision.
a. Map out the current process. Identify any rework loops and delays in the process. What causes these? What is the impact on cycle times? How might this affect customers' willingness to do business with Faircloth?
b. What changes might you recommend to redesign this process with the needs of the customer in mind? You might start by imagining how the "perfect" process would look to the customer and base your recommendations on that.