Examinations: MBA MAIN ASSESSMENT SESSION 2011
Module Title: MANAGING OPERATIONS Time: 10:30 – 13:30 Duration: 3 HOURS
Date: 16th SEPT 2011
The following items are provided: Examination Answer Booklet
Instructions to Candidates:
This is a closed book examination. This paper consists of TWO sections. Section A is compulsory – based on North West Bank case study issued to students prior to the examination. Answer all three questions in section A (50%) (A clean copy of the case study is included in this examination paper) Answer any two questions in section B. (25% each) Calculators are permitted.
North West Constructive Bank-The New Mortgage Centre
Andy Curtis, the Mortgage Operations Manager for North West Constructive Bank (NWCB), had launched a major investigation into his processes and how they might be redesigned (see Part 1 of the case study in Chapter 4). He had been prompted by the failure of his operation to improve after it had consolidated three separate sites into one location. The staff from the three old centres that covered the northern, southern and western areas of the bank‟s customer base had been kept largely intact in the new site. Andy and his team suspected that this may have contributed to their failure to improve performance, especially throughput time performance, immediately after the move.
Andy has initiated an investigation that would provide the basic data for a thorough examination of how the mortgage centre‟s processes could be redesigned. The results of this investigation are shown in Figure 1 and Table 1.
Figure 1: Process Maps for the four stages of the mortgage ‘new applications’ Process 1 SEPT2011
These detail the activities contained within each stage of the overall process together with each activity‟s immediate predecessor, the type of skills necessary to carry out activity, the allowed time for each activity (this had varied slightly between the three regional offices, so an average had been taken), and an estimate of the minimum times necessary to perform each activity. Also shown for each activity is the percentage of applications that needed to be “recycled” (applications that contained ambiguities, errors or omissions in the data supplied and therefore had to be returned to a previous activity) or “rejected” (the mortgage was being refused for some reasons). Two of the activities (activity b and activity h) were only necessary for approximately 40 per cent of applications. In addition, Andy had asked each section to make a “spot check” on how many applications were currently being processed. To his surprise it emerged that around 5,000 applications were in-process with most of them in the offer and completion parts of the process. “I‟m not surprised that offers spend a long time in the offer and completion parts of the process”, explained Andy. “Those are the sections where we are Waiting for the results of surveys or further information from legal representatives to arrive. Nevertheless, it‟s far too many applications to have just hanging around within the process.
Table 1: Activities, Skills and Times for all stages of the New Application Process Stage Activity Code Activity description Predecessor Special skills needed? none Percentage recycled and rejected Recycled 2.2% Rejected 0.5% Recycled 0 Rejected 0 Allowed time. (mins) 5 Approx. Min. time (mins) 5 Approx. Max. time (mins) 5
c Underwriting d
Credit scoring (40% of applications only) Data entry Assess case credit
15 (6 on average)
Prepare instruction docs Underwrite prelims Assess property valuation Confirm with customer or agent (40% of applications only) Process offer docs Check title docs with legal rep
u/r local rel
u/r u/r legal rel