The problem at IBM Credit was a major one. Getting
a financing quote took anywhere from four to eight
days (six days, on average), giving the customer time to
rethink the order or find financing elsewhere. While the
quote was being prepared, sales representatives would
often call to find out where the quote was in the process,
so that they could tell the customer when to expect it.
However, no one at IBM Credit could answer the question,
because the paper forms could be in any department and
it was impossible to locate one without physically walking
through the departments and going through the piles
of forms on everyone’s desk.
IBM Credit examined the process and changed it so
that each credit request was logged into a computer system
so that each department could record an application’s
status as soon as it was completed and sent it to the next
department. In this way, sales representatives could call
the credit office and quickly learn the status of each application.
IBM used some sophisticated management science
queuing theory analysis to balance workloads and staff
across the different departments so that no applications
would be overloaded. They also introduced performance
standards for each department (e.g., the pricing decision
had to be completed within one day after that department
received an application).