The only way to improve a Process is to measure it.
The Current State Process must be measured to be able to compare baseline numbers with measurements of the improved and implemented Future State Process.
Elements important to measure include:
1. First Pass Yield. How many times can an Activity Set be done correctly the first time? Reworking Activity Sets adds to unnecessary time and costs. It reduces your Capacity to process additional loans and requires additional people.
2. Capacity. How many loans can be processed with the current staff? Measurements are determined with and without Rework.
3.Velocity is defined as the amount of time it takes to process the loan from origination thru closing and on to post closing activities
4.Efficiency. How Efficient is the Process? Initially most processes are no more than 10% Efficient. Suggesting that 90% of the efforts are involved in Waste and Rework.
5.Cost. How much does it cost to make a Loan? Knowing the costs will help managers understand profitability on a per loan basis.
