1.1 How well do you think the measures used by MFC meet its desired purposes? Motor Finance Company (MFC) is a subsidiary of a major bank that provides car loans. MFC deals directly with car dealers rather than the public so that when dealers are faced with customers buying a car, they are able to arrange a loan. The dealer will take down the purchaser’s details and then ring MFC direct who will give them an immediate decision on a loan. The dealer is paid a commission by MFC.

Sean Williams is the senior manager at MFC, leading its performance measurement evaluation team. He explained:

The team is currently evaluating seven key performance measures that form part of our quality index. We have two key measures for controlling the operation, same-day funding

(whether the loan is agreed on the day it was requested) and proposal turnaround time (how long it takes us to generate the paperwork for an agreed proposal). The volumes of loan requests we receive on a daily basis, all of which are by telephone, are very variable and so we plot turnaround time on an hourly basis.

We then use statistical process control (SPC)

to help identify trends and the effect of any process changes. This helps us avoid any unnecessary reaction to normal variation within the process. Same-day funding is essential to help us ascertain if targets are being met. The measures are known for each team and area and collated into a departmental measure. Feedback is provided on a daily basis to team leaders and team members.

Meeting targets is linked to the bonus scheme.