Business-Wide Reengineering Program
Leading Vehicle Finance Co
The client, a $5 billion+ vehicle finance company, initiated a company-wide reengineering program aimed at helping the management team achieve their service and profitability goals by increasing revenue, decreasing operating expense and developing an infrastructure to support future growth in a cost effective manner. With the help of this rationalization effort, the indirect automobile financing business would be substantially reorganized along functional lines with which to better support corporate business objectives. Any remaining decentralized servicing and operations functions would be regionalized and/or nationalized.
The key elements of the program included:
- Rationalizing the key processes in Collections, Loan Acquisition, Application Processing, Customer Service, Payments and Collateral Control to improve quality, productivity and profitability.
- Evaluation of consolidation strategies for Collections, Buying and Loan Processing, and recommending the most appropriate solution to the organization in support of future growth.
- Developing functional specifications for the redesigned Loan Processing function and identifying "gaps" with the current loan system automation.
- Rationalization of the payments process to improve payment cycle times including an analysis of the current third party “Lockbox” costs and performance indicators.
- Developing a Management Process to insure the monitoring of productivity and service measures and benefits.
- Establish an Administrative Services group to manage activities relating to Facilities, Purchasing, Mail Services and Reception.
- Create a new Loan Servicing department that would be responsible for handling all loans after booking.
- Create a Quality Assurance function.
- Eliminate payment-processing functions from all remote field offices.
- Enhance the Voice Response Unit (VRU) in Customer Service to handle more calls, quote payoffs and eliminate handoffs.
- Standardize payments to clean up the process and reduce reconciliations.
- Consolidate the funding function within the Treasury Department.
- Remove Application Processing from buying centers and centralize in new center.
- Consolidate remarketing functions into the Remarketing department.
- Consolidate title follow-up activity into Loan Servicing Department.
- Consolidate Buying Center Back End collection activity into 3 full service Regional Collection Centers.
- Initiate paper-less buying utilizing the loan originations system.
- Standardize Loan, Buyer and collection processes across the organization.
- Create new Buying Center organization focused on sales and originations activities.
- Focus DDRs on Top Dealers and redefine relationship loading.
- Migrate collections into 3 regional centers allowing for account randomization and maximizing facility usage.
- Establish consistent collection organizations, strategies and production goals.
- Consolidate all Buying Center Back End collection activity into 3 full service Regional Collection Centers.
- Create a Collection Support unit to provide clerical support for all units within the center.
- Eliminate all paper forms from collection workstations, utilizing instead the collection system.
Total response time for credit decisions was improved by 30%. In addition to the increased service quality related to standardization and a more-responsive management process, occupancy expenses were reduced by over $5,000,000 annually. The program identified and achieved a reduction of over 400 permanent FTE -- representing annual savings of $14,000,000. Total annual savings exceeded $20 million in year two.
We sent only premium content when we think is worth enough to share.