GE Home Depot Black Belt Project

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

Pe

rce

nt

Goal

0 10 20 30 40 50

0

500

1000

Bus Days

Fre

quency

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

Fre

quency

– 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 NessethMaster BB: David BairdSponsor: Rick Hayes/Richard Cole

GE Capital Card ServicesHome 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



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 don’t trust you.”

“You are causing us to loose customers and

money.”

“Quality (DMAIC) takes longer than I’d 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 GE’s inability to process commercialcredit applications promptly and accurately. Home Depot established a separate unit oftheir personnel to review all applications declined by GE had no cycle time or accuracymeasures. The GE and Home Depot relationship reached a volatile point and HomeDepot was threatening to take the business to another provider.

“Decisions are taking too long and they are not accurate.”



3

Root Causes Immediate Solutions Implemented

Individual Queues not being Managed Report to analyze Que volumes Reviewed Daily byHDCS management

Apps that require investigation were nottracked in separate queues

Separate queues set up for apps needing investigation

All apps declined by HDCS were reviewed bysenior credit analysts prior to being sent toHDCRB

Duplicate Review of Declined ApplicationsEliminated at HDCS

35% of Applications in Que were flagged asduplicates. Analysts had to research and declinetrue duplicates.

Set up a separate que for suspected duplicate apps

High percentage of applications requesting >$25K credit limit taking more than 10 days todecision

Apps qued separately when keyed Clarified turnaround time expectation with ccms Queues reviewed and acted upon by HDCS

managementOld apps being reopened If an app has been decisioned > 30 days ago, analysts

do not reopen the app. The app must be rekeyedApps that HDCRB agreed with decline werenot worked as a priority

Working Que N8 daily

Root Causes Project Driven Solutions Implemented

No Department Level Cycle Time or AccuracyMeasurements

Developed suite of Daily and Weekly reports andExecutive Level Dashboard

Individual Queues not being Managed Reorganized Department into Regional Teams andcreated Team ownership for ques

No individual productivity measurements Obtained and automated individual productivitymeasures

No Staffing Plan for Department Implemented Productivity based Staffing Model New Analysts and New Team Managers Hired

HDCS was not collecting data on types oferrors and who was making errors.

Data collected regarding type of defects andinformation incorporated in Performance Reviews

Approved apps have not been reviewed foraccuracy

Conducted random review of approved apps andreview with analysts

HDCS not using consistent approval process ormatrixes to decision apps.

Developed and implemented new decision guidelinesfor 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 IncompleteApps and Resolve Issues in Keying Dept

Department lacked Basic PerformanceEvaluations and Recognition Programs

Designed Operational Tools: Monthly Feedback forEmployees and Managers, Rewards & RecognitionProgram, Managers Operating Manual

Situation Demanded Immediate

Improvements

DMAIC Process Provided the Structure to

Make Long Term Process

Improvements



4

USA Home DepotTotal Turn Time Trend

0

1221

6704

7434

5620

2889

971344

403

238

209235

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

Co

un

t

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.

Documents

GE Home Depot Black Belt Project