MBA Quality Management Project Part B

MGT 5534Team 1

Kelli BakerAJ DeCato

Mikel LozanoBrian RichardsonMadeline Russell

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Table of Contents0.0 EXECUTIVE SUMMARY............................................................................................................3

1.0 INTRODUCTION.........................................................................................................................4

2.0 METHOD......................................................................................................................................62.1 DATA COLLECTION............................................................................................................................62.2 PARETO CHART.................................................................................................................................7

2.2.1 Pareto Chart Process................................................................................................................72.3 FISHBONE (ISHIKAWA) DIAGRAM......................................................................................................7

2.3.1 Fishbone Diagram Process.......................................................................................................72.4 BRAINSTORMING PROCESS.................................................................................................................82.5 TEAM 1 DEVELOPMENT......................................................................................................................8

3.0 RESULTS/RECOMMENDATIONS............................................................................................93.1 RESULTS............................................................................................................................................93.2 RECOMMENDATIONS........................................................................................................................10

4.0 CONCLUSION...........................................................................................................................114.1 PROJECT ACKNOWLEDGEMENT........................................................................................................114.2 RECOMMENDATION SOLUTION RECEIVED.......................................................................................114.3 PROCESS IMPLEMENTATION.............................................................................................................11

5.0 APPENDICES.............................................................................................................................12TABLE 1: CHECK SHEET 1......................................................................................................................12TABLE 2: CHECK SHEET 2.....................................................................................................................13TABLE 3: CHECK SHEET 3.....................................................................................................................14TABLE 4: NPS CHECK SHEET................................................................................................................15TABLE 5: TOTAL CHECK SHEET TALLY.................................................................................................16FIGURE 1: MLO CHECK SHEET PARETO CHART....................................................................................17FIGURE 2: FISHBONE DIAGRAM.............................................................................................................18

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0.0 Executive Summary The Plan-Do-Check-Act (PDCA cycle) is a powerful quality tool used to help companies make

incremental process improvements. The PDCA cycle was used to help Idaho Central Credit

Union (ICCU) improve its online mortgage program. As the first half of the project focused on

the Plan portion of the PDCA cycle, the focus of the second half of the project will be on the Do-

Check-Act portions.

The planning phase developed a check sheet to determine what the largest issue the mortgage

program is facing. The cheek sheet was issued to the ICCU Internal Mortgage Loan Officers

(MLOs) for one month. The check sheets were then collected and the data was analyzed using a

Pareto Chart.

The Pareto Chart showed that members not understanding the timeline of the loan process was

the largest issue the MLOs faced. Given this information, Team 1 met with the MLOs again to

brainstorm the root cause. Team 1 used a fishbone diagram to facilitate this brainstorming

session. A fishbone diagram is a graphical representation of cause and effect. The MLOs then

ranked the possible causes, and the root cause was determined to be a lack of detailed and

upfront communications. From here several possible solutions were brainstormed and Team 1

made its recommendations:

ICCU should revise its checklist sent to members detailing the mortgage process.

ICCU should develop an internal checklist to prompt MLOs to use diverse

communication methods.

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1.0 Introduction Every industry in the world is unique in that each possess its own unique culture, goals, and

collection of talents. However, one variable differentiates these industries from competitors and

allies alike, namely, their processes. A process can take on many different forms such as

procedure, method, practice or action, but, ultimately, its meaning boils down to one key aspect;

how operations are performed.

How does management treat employees? How do employees treat customers? How do

employees perform their work? These are just some of the concerns involved in an industry’s

process. Some organizations have a very inflexible process which take away employee freedom

in job performance by enforcing a strict set of rules and policies. Other organizations are far

more compassionate and implement incredibly favorable policies. Some policies include,

freedom in decision making, delegation of responsibilities, and even working harder than they

have to in order to make customers feel as though they are the most important person at that

time. ICCU is one of these organizations and Team 1, consisting of five graduate level students,

met with a team of ICCU MLOs, and their manager Ms. Lori Spanbauer, in an effort to take an

already incredible process and, potentially, make a great process even better.

During the first half of this project, Team 1 discussed with the Internal MLO team any issues

they were facing when dealing with their customers, online mortgage applicants, in order to gain

an understanding of ICCU’s process. A check sheet of the issues was created and delivered to the

MLOs which they then used to count how many times, within a month, those issues presented

themselves. This is where the second half of the project comes into play. The overall purpose of

this project is to create value for a company by helping them to understand the current issues,

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within its process, and to understand the root cause of those issues. A series of quality tools

assisted in gaining this understanding.

One of these tools, as discussed in Part A of this project, is the PDCA cycle. The “planning”

phase took place during Part A, a plan was designed to assist ICCU to find its most frequent

issue. The remaining Do-Check-Act phases occurred within this part of the project. The “do”

phase of the cycle consisted of implementing the check sheet to the MLOs and allowing them to

collect data on the most recurring issue. The “check” phase of the cycle involved analyzing the

data collected by the MLOs in order to determine a trend in occurring processes. Finally, the

“act” phase of the cycle involved the brainstorming process, conducted with the MLOs and

Spanbauer, in order to determine the likely causes of the most frequent issue. In addition to the

PDCA cycle, the check sheet developed in Part A was issued to the MLOs and, using its

information, a Pareto Chart and fishbone diagram were created.

By utilizing these tools, an organization can gain an even deeper understanding of its issues and

can find ways to improve its process. However, Team 1 could only facilitate the discussion and

record information; the MLOs needed to discuss the effects of the issues in depth and analyze

possible causes on their own.

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2.0 MethodDuring the “Do” phase of the PDCA cycle, Team 1 collected data from ICCU’s MLO team on

the frequency of issues. This data was used to create a Pareto chart to determine which issues are

causing most of the problem. Team 1 then focused on creating a fishbone diagram with the

MLOs in order to find possible root causes. An open communication methodology was used

throughout the process.

2.1 Data CollectionA check sheet of eight common concerns was formulated through Part A of the project. The

check sheet was issued to the four participating MLOs in direct contact with ICCU members.

They are also able to garner customer feedback through a Net Promoter Score (NPS), a phone

survey issued by an internal employee. The check sheet at Spanbauer’s desk was solely used for

the NPS feedback. The MLOs were informed that they would have the check sheet available for

one month and would be able to give a corresponding checkmark when an issue arose. Once a

week, Team 1 would ask the MLOs about the progress of the check sheets.

At the end of the 30 days Team 1 collected the check sheets. It was discovered that one of the

participants had lost his check sheet, believed to be accidentally thrown away a few weeks

before. If this would have been known, Team 1 could have supplied a new check sheet.

However, it was too late in the process so the information already collected would be used. The

amount of checks per participant varied in total from 2 to 31. Check sheets are shown in Tables 1

through 4.

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2.2 Pareto ChartThe Pareto chart is a bar graph that visually depicts which situations are more significant. On

average a Pareto chart is useful to determine which problems or causes in a process needed to be

improved or investigated.

2.2.1 Pareto Chart ProcessThe Pareto chart was created to represent the data collected from the check sheets. A key aspect

of the Pareto chart is to show the largest set of responses which is the most important factor. The

process to create the Pareto Chart was through Excel. The check sheet issues and their

corresponding counts were shown as columns with the most frequent issues matching the largest

columns. Table 5 shows the variables entered into the Pareto chart, and the Pareto chart is

featured in Figure 1.

2.3 Fishbone Diagram A fishbone diagram identifies many possible causes for an effect or problem. It immediately

sorts ideas into useful and actionable categories.

2.3.1 Fishbone Diagram ProcessTo begin the process, Team 1 met with the MLOs. The Pareto chart determined that the most

frequent problem was that the member didn’t always understand the timeline of the process. This

was an effect listed on the fishbone diagram with a horizontal arrow pointing to it. Team 1

proceeded to create categories for possible causes shown as branches from the main arrow; the

outline resembled a fishbone (shown in Figure 2).

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It was made clear to the MLOs that this was their time to brainstorm. During the open

brainstorming session, the MLOs came up with seven major categories of possible causes. Team

1 acted as facilitators throughout the process and asked some “why” questions to generate deeper

levels of causes. When the MLOs ran out of ideas, they were asked to assign points to their three

biggest causes. Their leading causes received five, three, and one point respectively. Each MLO

was able to assign points as they deemed fit.

2.4 Brainstorming ProcessAs mentioned, the initial brainstorming process for the development of the fishbone diagram

happened in a very open manner. In addition to this, the brainstorming process to discuss any

possible solutions was also very unguarded. Due to time constraints, Team 1 suggested that the

MLOs take a few hours, post fishbone diagram, to think about possible solutions, then would

meet again to brainstorm with the other MLOs.

2.5 Team 1 DevelopmentBy this time Team 1 felt comfortable with each other and was able to work entirely in the

performing phase of team development. Just as in Part A of the project, Team 1 met every

Monday night following class to discuss the project. Every member made it to all meetings with

the ICCU MLOs, however, only 1 member met with the MLOs on a weekly basis to minimize

any disruption. When it came time to write Part B, the sections were delegated to the person who

felt most comfortable in the section. The members of Team 1 have gained a strong understanding

of teamwork throughout the semester that can be carried on to other projects.

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3.0 Results/Recommendations Throughout project Part B, Team 1 worked closely with ICCU’s MLOs in order to gain the best

possible results. Both teams understand that quality is important to achieve work that meets

organizational standards.

3.1 ResultsThe highest concern the MLOs were able to determine from the check sheet, was that the

members did not understanding the timeline of the overall loan process (see Table 5). This could

be attributed to many factors, however, from the fishbone diagram the leading cause was detailed

communication and expectations were not performed up front. Interestingly enough, the second

most frequent issue from the check sheet was members stating they had not received a copy of

the appraisal. This issue directly relates to the misunderstanding of the timeline as a whole as a

member had to wait for a document that they are supposed to receive.

ICCU is known for continuous improvement. This commitment has attributed to its overall

success through the years. Furthermore, members had been reporting not receiving their loan

documents in a timely manner before this quality project began. This practice had been more

widespread than simply the MLO member contact making ICCU select a new internal software

package that would handle document management differently, therefore, fixing this issue.

However, the program was not in the final selection stage until close to the end of this project.

While the document problem has been addressed, the largest issue is still the members not

understanding the timeline as a whole.

Through the construction of the fishbone diagram the MLOs highlighted the stem of the problem

at hand, the main proponent of the issue and any leading causes that could possibly contribute to

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the problem. Figure 2 shows the entire fishbone diagram. Some of these issues include external

forces such as purchase contingencies, government restrictions such as tax implications and

TRID, and overall process understanding factors like jargon and uncommunicated delays. The

results of the fishbone diagram were mixed at first with no clear indication of the root cause.

However, a top reason eventually emerged when the MLOs assigned a point value system. The

top three causes remained after the points had been assigned from all MLOs and their manager.

Figure 2 represents all three causes and their respective votes.

3.2 RecommendationsDetailed communication and expectations upfront to the member was the root cause determined

by the MLO team. Currently the MLOs have a list in place to ensure each member understand

the necessary items and requirements of the process. This list is even sent to the member in an

email form to show what they will need and the general order of which things will happen. It is

recommended that this list be reviewed for accuracy against the average timeline for most

member loans. In addition, the MLO team should develop an internal checklist or form that

reminds them to notify the customer through multiple channels (ie. email, phone conversation,

letter) of the general timeline of the process based on the particular variables.  

4.0 Conclusion Dr. Deming once said, “It is not enough to do your best; you must know what to do, and then do

your best.” ICCU is always looking for ways to continuously improve its process to better suit its

members and create fewer problems.

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4.1 Project acknowledgement Overall the improvement project seemed to be well received by the MLOs at ICCU; there was

genuine excitement during the creation of the fishbone diagram. The end goal of a quality

improvement project is to improve customer satisfaction which will make the MLOs job easier.

The MLOs seem acutely aware of this fact, and as such they were very receptive to making a

process improvement. The quality improvement project provided strong evidence of

communication problems between the MLOs and the members of ICCU which was suspected

even before the project began.

4.2 Recommendation Solution Received The recommendations seem to be welcomed. Improving the existing checklist, the MLOs email

to members, seemed to be especially well received. It was actually close to a solution

brainstormed by the MLOs, to develop a letter that would explain in detail what the general

mortgage process and timeline is, as well as to develop more detailed letters for different type of

mortgages. Developing an internal checklist to help MLOs use diverse channels is essential to

improving communication. ICCU was quite receptive to developing this checklist.

4.3 Process Implementation Since ICCU has such a strong reputation for listening to employees and a high commitment to

customer service, the project’s recommendations will at least be taken into consideration. There

was also a great deal of enthusiasm for the project from Spanbauer. Given these facts, it is very

probable that most of the recommendations will be implemented to one degree or another.

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5.0 AppendicesTable 1: Check sheet 1

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Table 2: Check Sheet 2

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Table 3: Check Sheet 3

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Table 4: NPS Check Sheet

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Table 5: Total Check Sheet TallyIssue Count

Member voiced concern about  not understanding the timeline of the loan process. 14

Member stated that they have not received the appraisal 10

Member voiced concern about contact frequency during the loan process 7

Member confused about “Closing Costs” vs “Down Payment” 7

Member states it took too long to get contacted after the initial loan application 3

Member complained about receiving different information from other ICCU employees

3

Member voiced concern about not knowing the necessary information of loan process upfront.

1

Member expressed that they are not feeling value due to distance 1

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Figure 1: MLO Check Sheet Pareto Chart

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Figure 2: Fishbone Diagram

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