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GE Home Depot Black Belt Project

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Dee Daley

This document summarizes a project to improve the commercial credit application process between GE Capital Card Services and Home Depot. The process previously had long cycle times, low accuracy, and a poor customer experience. A team applied the DMAIC process and implemented solutions like separate queues, productivity tracking, and decision guidelines. This improved cycle time from a mean of 9 days to 2.9 days, increased accuracy, and saved $870,000. Home Depot is now satisfied with the improved turnaround times and relationship with GE.

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Percent of Defective Decisions on Applications 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% Mar-99 Apr-99 May-99 Jun-99 Jul-99 Aug-99 Sep-99 Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 Month Percent Goal 0 10 20 30 40 50 0 500 1000 Bus Days Frequency Cycle Time- Week of Sept 27, 1999 Improved Process Sigma 3.2 Mean 2.9 Days Standard Deviation 3.2 Days Minimum 0 Days Maximum 46 Days Upper Spec = 10 0 10 20 30 40 50 60 70 80 90 0 500 1000 1500 Bus Days Process Sigma 1.4 Mean 9.0 Days Standard Deviation 9.0 Days Minimum 0 Days Maximum 86 Days Upper Spec Limit = 10 Black Belt: Dee Daley/ Kelli Nesseth Master BB: David Baird Sponsor: Rick Hayes/Richard Cole GE Capital Card Services Home Depot Commercial Underwriting: Project Summary 2 Cycle Time Baseline-Week of July 5, 1999 Accuracy Measure- Before Home Depot approved 21% of the declined applications they reviewed and GE agreed with Home Depot. . There was no measurement of Accuracy of Approved Applications. Accuracy Measure- After
Business Case PIT Team Established in June, 1999 Black Belt: Dee Daley/ Kelli Nesseth Master BB: David Baird Sponsor: Rick Hayes/Richard Cole GE Capital Card Services Home Depot Commercial Underwriting: Project Summary 1 Voice of Customer- Before Voice of Customer- After We are Going to Pull This Business. Thing have never ever, ever been this good in the group. We dont trust you. You are causing us to loose customers and money. Quality (DMAIC) takes longer than Id like but it produces great results. The members of this team put in a lot of time and effort to improve the way we approve commercial applications, and the results have been nothing short of amazing!. In May, 1999 Home Depot was exasperated with GEs inability to process commercial credit applications promptly and accurately. Home Depot established a separate unit of their personnel to review all applications declined by GE had no cycle time or accuracy measures. The GE and Home Depot relationship reached a volatile point and Home Depot was threatening to take the business to another provider. Decisions are taking too long and they are not accurate.
Black Belt: Dee Daley/ Kelli Nesseth Master BB: David Baird Sponsor: Rick Hayes/Richard Cole GE Capital Card Services Home Depot Commercial Underwriting: Project Summary 3 Root Causes Immediate Solutions Implemented Individual Queues not being Managed Report to analyze Que volumes Reviewed Daily by HDCS management Apps that require investigation were not tracked in separate queues Separate queues set up for apps needing investigation All apps declined by HDCS were reviewed by senior credit analysts prior to being sent to HDCRB Duplicate Review of Declined Applications Eliminated at HDCS 35% of Applications in Que were flagged as duplicates. Analysts had to research and decline true duplicates. Set up a separate que for suspected duplicate apps High percentage of applications requesting > $25K credit limit taking more than 10 days to decision Apps qued separately when keyed Clarified turnaround time expectation with ccms Queues reviewed and acted upon by HDCS management Old apps being reopened If an app has been decisioned > 30 days ago, analysts do not reopen the app. The app must be rekeyed Apps that HDCRB agreed with decline were not worked as a priority Working Que N8 daily Root Causes Project Driven Solutions Implemented No Department Level Cycle Time or Accuracy Measurements Developed suite of Daily and Weekly reports and Executive Level Dashboard Individual Queues not being Managed Reorganized Department into Regional Teams and created Team ownership for ques No individual productivity measurements Obtained and automated individual productivity measures No Staffing Plan for Department Implemented Productivity based Staffing Model New Analysts and New Team Managers Hired HDCS was not collecting data on types of errors and who was making errors. Data collected regarding type of defects and information incorporated in Performance Reviews Approved apps have not been reviewed for accuracy Conducted random review of approved apps and review with analysts HDCS not using consistent approval process or matrixes to decision apps. Developed and implemented new decision guidelines for all analysts and measured compliance by analyst 10% of all Apps not Complete Keying Dept sending Incomplete Apps to Credit Dept to Research Separate PIT Team formed to Address Incomplete Apps and Resolve Issues in Keying Dept Department lacked Basic Performance Evaluations and Recognition Programs Designed Operational Tools: Monthly Feedback for Employees and Managers, Rewards & Recognition Program, Managers Operating Manual Situation Demanded Immediate Improvements DMAIC Process Provided the Structure to Make Long Term Process Improvements
Black Belt: Dee Daley/ Kelli Nesseth Master BB: David Baird Sponsor: Rick Hayes/Richard Cole GE Capital Card Services Home Depot Commercial Underwriting: Project Summary 4 USA Home Depot Total Turn Time Trend 0 1221 6704 7434 5620 2889 971 344 403 238 209 235 239 285 0 5000 10000 15000 20000 25000 Mar-99 Apr-99 May-99 Jun-99 Jul-99 Aug-99 Sep-99 Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 Month Count 0-2 Days 3 Days 4-5 Days 6-10 Days 11+ Days Status Today Saved $870,000 in EFT and Overtime Expenses. Analysts Were Decisioning 27 Apps Per Day, Now Decisioning 60+ Applications/day. Home Depot Is Very Satisfied Turnaround Time Has Remained Low Through Spring Application Volume Increase. Home Depot Is Still Reviewing Declined Applications, Although Pleased With Our Accuracy. Metrics Designed by This Team Are Now Utilized Throughout Commercial. A Consumer Underwriting Process Improvement Team Has Been Launched. New Commercial Application System Is Under Development to Eliminate Majority of the Manual Decisioning Volume.

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GE Home Depot Black Belt Project

  • 1. Percent of Defective Decisions on Applications 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% Mar-99 Apr-99 May-99 Jun-99 Jul-99 Aug-99 Sep-99 Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 Month Percent Goal 0 10 20 30 40 50 0 500 1000 Bus Days Frequency Cycle Time- Week of Sept 27, 1999 Improved Process Sigma 3.2 Mean 2.9 Days Standard Deviation 3.2 Days Minimum 0 Days Maximum 46 Days Upper Spec = 10 0 10 20 30 40 50 60 70 80 90 0 500 1000 1500 Bus Days Process Sigma 1.4 Mean 9.0 Days Standard Deviation 9.0 Days Minimum 0 Days Maximum 86 Days Upper Spec Limit = 10 Black Belt: Dee Daley/ Kelli Nesseth Master BB: David Baird Sponsor: Rick Hayes/Richard Cole GE Capital Card Services Home Depot Commercial Underwriting: Project Summary 2 Cycle Time Baseline-Week of July 5, 1999 Accuracy Measure- Before Home Depot approved 21% of the declined applications they reviewed and GE agreed with Home Depot. . There was no measurement of Accuracy of Approved Applications. Accuracy Measure- After
  • 2. Business Case PIT Team Established in June, 1999 Black Belt: Dee Daley/ Kelli Nesseth Master BB: David Baird Sponsor: Rick Hayes/Richard Cole GE Capital Card Services Home Depot Commercial Underwriting: Project Summary 1 Voice of Customer- Before Voice of Customer- After We are Going to Pull This Business. Thing have never ever, ever been this good in the group. We dont trust you. You are causing us to loose customers and money. Quality (DMAIC) takes longer than Id like but it produces great results. The members of this team put in a lot of time and effort to improve the way we approve commercial applications, and the results have been nothing short of amazing!. In May, 1999 Home Depot was exasperated with GEs inability to process commercial credit applications promptly and accurately. Home Depot established a separate unit of their personnel to review all applications declined by GE had no cycle time or accuracy measures. The GE and Home Depot relationship reached a volatile point and Home Depot was threatening to take the business to another provider. Decisions are taking too long and they are not accurate.
  • 3. Black Belt: Dee Daley/ Kelli Nesseth Master BB: David Baird Sponsor: Rick Hayes/Richard Cole GE Capital Card Services Home Depot Commercial Underwriting: Project Summary 3 Root Causes Immediate Solutions Implemented Individual Queues not being Managed Report to analyze Que volumes Reviewed Daily by HDCS management Apps that require investigation were not tracked in separate queues Separate queues set up for apps needing investigation All apps declined by HDCS were reviewed by senior credit analysts prior to being sent to HDCRB Duplicate Review of Declined Applications Eliminated at HDCS 35% of Applications in Que were flagged as duplicates. Analysts had to research and decline true duplicates. Set up a separate que for suspected duplicate apps High percentage of applications requesting > $25K credit limit taking more than 10 days to decision Apps qued separately when keyed Clarified turnaround time expectation with ccms Queues reviewed and acted upon by HDCS management Old apps being reopened If an app has been decisioned > 30 days ago, analysts do not reopen the app. The app must be rekeyed Apps that HDCRB agreed with decline were not worked as a priority Working Que N8 daily Root Causes Project Driven Solutions Implemented No Department Level Cycle Time or Accuracy Measurements Developed suite of Daily and Weekly reports and Executive Level Dashboard Individual Queues not being Managed Reorganized Department into Regional Teams and created Team ownership for ques No individual productivity measurements Obtained and automated individual productivity measures No Staffing Plan for Department Implemented Productivity based Staffing Model New Analysts and New Team Managers Hired HDCS was not collecting data on types of errors and who was making errors. Data collected regarding type of defects and information incorporated in Performance Reviews Approved apps have not been reviewed for accuracy Conducted random review of approved apps and review with analysts HDCS not using consistent approval process or matrixes to decision apps. Developed and implemented new decision guidelines for all analysts and measured compliance by analyst 10% of all Apps not Complete Keying Dept sending Incomplete Apps to Credit Dept to Research Separate PIT Team formed to Address Incomplete Apps and Resolve Issues in Keying Dept Department lacked Basic Performance Evaluations and Recognition Programs Designed Operational Tools: Monthly Feedback for Employees and Managers, Rewards & Recognition Program, Managers Operating Manual Situation Demanded Immediate Improvements DMAIC Process Provided the Structure to Make Long Term Process Improvements
  • 4. Black Belt: Dee Daley/ Kelli Nesseth Master BB: David Baird Sponsor: Rick Hayes/Richard Cole GE Capital Card Services Home Depot Commercial Underwriting: Project Summary 4 USA Home Depot Total Turn Time Trend 0 1221 6704 7434 5620 2889 971 344 403 238 209 235 239 285 0 5000 10000 15000 20000 25000 Mar-99 Apr-99 May-99 Jun-99 Jul-99 Aug-99 Sep-99 Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 Month Count 0-2 Days 3 Days 4-5 Days 6-10 Days 11+ Days Status Today Saved $870,000 in EFT and Overtime Expenses. Analysts Were Decisioning 27 Apps Per Day, Now Decisioning 60+ Applications/day. Home Depot Is Very Satisfied Turnaround Time Has Remained Low Through Spring Application Volume Increase. Home Depot Is Still Reviewing Declined Applications, Although Pleased With Our Accuracy. Metrics Designed by This Team Are Now Utilized Throughout Commercial. A Consumer Underwriting Process Improvement Team Has Been Launched. New Commercial Application System Is Under Development to Eliminate Majority of the Manual Decisioning Volume.