VSM CASE STUDY

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CASE STUDY: BANK LOAN
Background
Banks provides mortgages and debt consolidation regionally available.
A bank has made a name for itself by providing quick turnaround on apps for customers who want a
simple, no hassle loan process.
As of late the bank has been losing customers because they have not been able to provide loans on a
timely basis.
Problem
Applications for mortgages have steadily declined in the past year. This is leading to a drop in revenue as
a result of an inability to provide loans in a timely manner.
Goal
Reduce lead time by at least 50% within six months.

© 12/5/22 Business Future Solutions

 CURRENT STATE MAP

Bank Current State

• Demand = 2,500
Loan Accounts/month
Applicant • 8 Hours/Day

Takt Time
27,000 secs
Daily 125 apps = 216 secs Daily

Information flow Central Data

Base

Credit Check

Push Arrow with Inventory Icon Receipt Data Underwrite Generate Mail
Indicates an accumulation of unprocessed Entry Package Package
IN IN IN IN IN
transactions
=2 =5 =2 =1 =1
Mailbag In Box In Box Outlook In Box
Inventory Data Box:
FIFO FIFO Value FIFO Post Code
Format of inventory (ie: In-box, E-mail) OCT = 15 OCT = 780 OCT = 720 OCT = 420 OCT = 45
Method for withdrawal (ie: FIFO) 75 D/R = 8 200 apps D/R = 184 500 D/R = 385 0 Files D/R = 420 75 D/R = 45
Number of items Envelopes Q = 100% Q = 98% Files Q = 35% Q = 97% Packages Q = 100%

0.02 days 1.36 days 7.1 days 0 days 0.13 days L.T. = 8.6 days
15 secs 780 secs 720 secs 420 secs 45 secs P.T = 1,980 sec

L.T. = Lead Time

P.T. = Processing Time

© 12/5/22 Business Future Solutions

ACTIVITIES IN VSM
Receipt
All mailed apps are received in the
mailroom where they are opened and
sorted by city by two mailroom
employees.
Data Entry
The application information is entered into
a central data base by one of five data
entry clerks.
Underwriting
All apps that successfully go through
credit check are sent to one of two senior
underwriters who determine the credit
worthiness and limit.
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Generate Package
Once the credit decision has been
reached a personalized package is
prepared by a clerk outlining either the
acceptance or rejection.
Mail Package
These packages are put in envelopes
and sent via registered mail daily to the
applicants. One of the mailroom
employees is dedicated to processing
outgoing mail.