Rightsizing Loans Operations

Abstract

The "Rightsizing Loan Operations" project at Banco Popular's Loan Operations Commercial Loans division aimed to optimize processes and resource allocation across three units: Loan Documentation, Loan Modification BPPR, and Loan Modification PB, impacting thirteen employees. Utilizing the DMAIC methodology, the project addressed challenges in process visibility, capacity measurement, and productivity management. Key findings revealed variability in workload distribution and production peaks, particularly during afternoons and the second half of the month. Specific trends included increased case volumes in June and high demand for afternoon tasks in Loan Modifications PB, with 10 additional tasks identified beyond existing logs. In the Analyze phase, tools like histograms and queuing theory were employed to assess capacity and recalibrate points systems. Key improvements included defining metrics for FTEs, capacity, and production, confirming no need for additional vacancies in Loan Documentation, and implementing cross-training for Loan Modifications units to enhance resource utilization. PB’s activity log was redesigned, with an Excel-based format recommended for tracking additional tasks. The Control phase introduced an implementation plan with updated dashboards for capacity monitoring and periodic recalibrations to adapt to demand changes. The project achieved financial benefits, avoiding $69,895 in costs and delivering a 199% ROI. Operational enhancements included improved productivity metrics, risk management, and decision-making support. By streamlining processes and optimizing FTE allocation, this project significantly bolstered operational efficiency within Banco Popular's Loan Operations, aligning with its goal of delivering exceptional customer service and operational excellence.