Capital One Case

This is an individual case. That means you and only you should do it, without seeking and providing any help. It also means all the tables and the answers should be yours. For example, nobody should find your answer in Google or in turn-in. They should not look like that of your colleagues from this year or last year or any year.

This is a case on business process. Most important chapter to understand here is Chapter 3 of your text book. Besides, chapter 4 is important as well. You should understand and be able to calculate, capacity, demand and (implied) utilizations in each steps. You should be able to identify the bottle neck and the capacity of the process itself.

This is a very straight forward case. Each steps are described, with reference to the exhibit where you find the relevant data.

I have developed 10 questions to help you analyze the case. It may look long but it is not that complicated, if you understand chapter 3 thoroughly. In order to answer the questions, you have to know how to divide the total process into relevant steps. If you look at Exhibit 1, the case has given the steps for capital one loan process. You can take important steps in your analysis. To answer each of the question you have to find demand for each of the steps, and capacity for each of the steps and calculate (implied) utilization.

To answer the questions you have to have analysis like they have done in chapter 3 (or chapter 4 in case of line balance). You can look at table 3.6 (page 47) for example in order to understand, what I mean by analysis. Your answer to each of the question should be backed by calculation. Answer for most of the questions requires analysis of the business process. If you have no clear analysis there is no answer. I would suggest you to make the tables on spreadsheet. That way I can see the formula you have used, and you can use the same table structure and make relevant changes to come up the answer for different questions.

You should put yourself in Rick’s shoes and answer following questions.

1. How many loans on average do Capital one funds currently, i.e. before the marketing campaign?

2. What is the current capacity of the capital one loan processing system?

3. What is the current utilization of the process?

4. Now they are planning to fund 700 loans per month, which step would be the bottleneck? What would be the implied utilization of the bottleneck?

Of course just answering these questions are not enough for Rick, and they should not be enough for you. You should suggest improvements so that the target of 700 loans per month can be achieved.

5. You see some are working fewer number of hours, while other work longer. Just think what would be the feasible number of hours to be worked every week, and how would that improve the process?

6. That is not enough, you not all workers are equally good, some are productive (get more done per hour) others are less so. How would your process improve if you increase the workers’ productivity? Remember, this should be cumulative improvement above and over what you suggested in question 5 above. Similarly, all the changes you suggest below should also be cumulative.

7. There are some problems with quality. 10% of the applications need to be reworked. How would your process improve if you improve the quality?

8. You also see that all the loan process initiated to not end up being funded. There are significant dropout rate? How far can you reduce the dropout rate and how much of this reduction will improve your process?

9. Can you balance the line, by moving some workers from one step to another?

10. Finally, even after all the improvements if you decide the capacity is not enough, you can suggest additional workers should be brought in. You should point out in which step you need the additional workers.

Grading scheme:

This case is worth 100 points, I will give you 10 points for answering each question.