RevisedCaseAnalysis opmt 1

Case Study: Anna Pessah: Lean Thinking at Summit Funding

NEERAJ SINGH CHAUHAN (1810112)

University Canada West

Professor: Larry Earnhart

Operations Management OPMT 620

Assignment Due: 10-02-2019

Case Analysis

Understanding the business is itself a vital element that makes it easier for the company leaders to be able to know the next move the company or companies need to attain more success. In this study, this will be a vital look that will be derived from a given case study of one Anna Pessah who is an industrial and operations engineer with masters from the University of Michigan.

This study will focus on summarizing and debating the company dilemma that Pessah comes across in her new company Summit. The company provides service in the financial industry as opposed to the manufacturing and processing industry which she is used to. This study will make a clear dive in pointing out the problems the company faces and some of the solutions that can be put into play (some of which are suggested and developed by Pessah) to ensure that the company grows.

The Summit Situation

Summit or also known as Summit Funding is a mortgage company that started in 1997 to date. The company has managed to grow in a strange manner such that it has 28 branches across 15 states in the United States of America. The company has more than 1,100 employees; it has also been ranked among the top 100 mortgage lender companies across the United States. This significant level of growth and constant success happens to the main reason as for why the company has called in a process engineer with more experience since the company is still working under its essential startup principles’.

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According to Pessah, Summit is an incredible company that has employees who do not judge those who are in leadership. Pessah also points out that the employees at Summit have no preconceptions about an individual as she had experienced this challenge in half of her career (Heizer, Render, Griffin, 2017).

Summit has a central headquarter which has been dubbed the mothership, none the less, the mothership seems to have little control over its branches but remains to be the ruling and governing agent of the business. However, the Summit Company has an incredible and unique culture which is not common to come across many companies. The company allows all its branches to act independently and develop their forms of doing business as long as the task is done by the end of the day. The company believes this is the best way to allow the employees at each branch to feel part of a bigger picture and to also be able to perform without much pressure.

This move was also made since the branches are in different demographic regions which have different cultures which directly affect the business since it is a business that needs to connect to the people. Thus, opening the branches to adapt to their respective environment is more of a business strategy. However, the company is genuinely growing, but it does face some threatening challenges that can easily terminate the franchise in a shorter duration than expected (Heizer, Render, Griffin, 2017).

Problems that Summit is facing

The Summit Company is in a range of growth and development but seems to have several challenges that are pulling it back and are making the company rapidly approach a stunted growth rate. Below is an overlook at some of the most rampant and distractive challenges that have been pointed out by Pessah in her first anniversary with the company:

Lack of consistency: Summit fails to have flexibility in various positions in the organization which makes it lose out on multiple aspects such as its profits and growth margin (Heizer, Render, Griffin, 2017).

Poor decision-making strategies: The Company is faced with a critical challenge and ability to make choices as the mothership fears disrupting the other branches due to the difference along the chain of command and function.

Lack of prioritization: During the first month of her new post, Pessah realized that the employees did not know what to work on first and what to work on later. This caused a clog in the system regarding delay since most of the internal factors and features were never catered for at first (Heizer, Render, Griffin, 2017).

No tracking systems: From the readings, it has been pointed out that the mothership company only focused on attaining primary data such as final results. This shows that the mother ship does not have a relevant system to monitor the branches.

Lack of co-ordination: However much the company depends on its diversity and freedom culture across its branches, there needs to be a common ground. However, this is not the case as the company treats each branch like a company of its own and this can easily cause a branch to drift away from the main goals, missions, and vision of the company (Chua, Roth & Lemoine, 2015).

Lack of data: When it came to the developing of a statistical print out of the company, Pessah was challenged when it came to attaining relevant data as Summit does not focus on the statistical point of view of the business. Pessah also claims to have heard one critiquing that the data collection is not applicable in the Summit set but only viable in a manufacturing company. This clearly shows a slow drift of employees from the company. The lack of viable data might also cause the company to find itself on the wrong side of the law regarding taxes and might even start losing money.

How Pessah Handled the Challenges at Summit

Pessah came into Summit with the same mentality that she had when working for a big industrial and manufacturing company. As a result of this, she applied the following strategies to solve the challenges that the company was facing:

The Lean Strategy and Workshops

This is a basic strategy that employs the law and rule of a chain that must be followed usually during production and manufacturing with the aim of making that the end result offered to the client is in the best standard possible. Basically, with regards to Pessah, this strategy was to make it possible to eliminate any unnecessary factors in the process that played at closing Mortgage deals in the company (Maskell, Baggaley & Grasso, 2016).

Since the Lean strategy was a new tool and technique in the company, Pessah introduced a forum of educating and informing the employees on what Lean was hence being dubbed workshops. This method made it possible to ensure mass education was conducted and less time was wasted in return.

Creation of Pods

This is basically an idea that was set up by Pessah where most of the identical functions (Funding organizer, the funder and CD developer/drawer) that resulted in having 8 pods. This did reduce monotony as well as built teamwork. However, it did interfere with the original culture (Chua, Roth & Lemoine, 2015) in the company where each branch had its own power in coordinating its affairs. This was as a result of the funders being grouped in the pods that were centered at the mothership and not at the branches.

VOE (Verification of Employment)

Since the business seemed to lack a large level of data, Pessah saw it beneficial to apply the VOE in Summit as a means of identifying the duration that was taken to close a loan. This was to be done by the funding coordinator and it had a duration to it. This was a ground breaking fallout as the dates that took to close the loans were not always as prescribed by the VOE and this meant it would either be redone or more funds would be used to adjust the system. This did not have much benefit to the organization.

Project Ninja

This is a project that was developed by the senior managers who thought it would be of benefits in determining structures of easing the workload that their employees are encountering. However, this move would use executive leaders in it which is not beneficial in anyway. This move was made to show how the work can be improved and also how costs can easily be reduced. However, this is more of a struggle and a waste of time and resources as the executive team does not have any clue as to how the business is done (Heizer, Render, Griffin, 2017).

Solutions that might further help Pessah and Summit attain its Goals

In the one year that Pessah has been in the company, she has formulated different systems that would make the business a greater success than it is, this segment will also include some strategies that can make the industry improve and better its core strategy of success:

Improving the LEAN Strategy with the Agile Strategy: LEAN is a model that a company can use to reduce unnecessary expenses and ventures. This also makes it possible to prioritize what to do first and what to do later. This makes it possible to reduce time wastage and reduce the costs incurred by the company (Maskell, Baggaley & Grasso, 2016). Pessah believes that this is the mainframe that Summit needs to get a clear view of its potential. However, despite the viability of the strategy, it makes it difficult to focus various aspect especially in the case of Summit it being a financial organization that deals with customers time frames. The best tool that would fit this would be the Agile Strategy which is one that deals with innovative businesses that have a high level of volatility and organizations that tend to have high levels of profit margins (Sachit Bhatia, 2019). This method would also reduce the chances of disturbing the company’s culture as its forecast approach is more of a consultative one (Chua, Roth & Lemoine, 2015). Not only will this improve employee empowerment, it will also make it possible for the vail of culture to remain constant.

Improve on product delivery: Pessah being one who believes in the interaction of employees and executives found that many of the employees did not know how to present or market the products that most clients are looking for. Therefore, developing and relating to the product delivery strategy as opposed to the forced sales makes it possible for the company to attain more customers. This also makes the employees find their work more appealing hence making them able to develop newer ways to approach clients. This move is more effective as compared to the meaningless Project Ninja which has no direct effect on how workers will be performing their duties.

Data taking: Adopting data collecting techniques such as A3 reporting, visual management, and Kanban control systems. This is just some of the tools that can be used to better the data collection in the company. Pessah believes that having a clear set data makes it possible to evaluate the direction of the company regarding market growth, profits and loopholes in any branch. The company can also turn on a new leaf and welcome the use of advanced technology systems and a database collection center as well as a VPN network that would directly connect the branches to the mothership where all the data can be collected (Akter, Wamba, Gunasekaran, Dubey & Childe, 2016). Not only will this improve the level of data about the company, but it would also reduce the time and funds wasted in developing programs that are not accurate and fit for the organization such as the VOE.

References

Akter, S., Wamba, S. F., Gunasekaran, A., Dubey, R., & Childe, S. J. (2016). How to improve firm performance using big data analytics capability and business strategy alignment? International Journal of Production Economics, 182, 113-131.

Chua, R. Y., Roth, Y., & Lemoine, J. F. (2015). The impact of culture on creativity: How cultural tightness and cultural distance affect global innovation crowdsourcing work. Administrative Science Quarterly, 60(2), 189-227.

Heizer, J., Render, B., Griffin P. (2017). Operations Management: Sustainability and supply chain management. Toronto, Ontario: Pearson.

Maskell, B. H., Baggaley, B., & Grasso, L. (2016). Practical lean accounting: a proven system for measuring and managing the lean enterprise. Productivity Press.

Sachit bhatia. (2019). Apparel Magazine. Retrieved 5 February, 2019, from /lean-vs-agile-considerations-shape-supply-chain-strategies