Manage Innovation and Continuous Improvement 

Task 1: Scenario Based Question: 

Felco Incorporated (Felco) provide smart phones and credit to customers. Credit is provided by issuing an account that is billed one month in arrears. Prior to credit being given, a customer is required to gain an acceptable score via a process called the 'creditworthiness evaluation or credit con credit team has decided to undertake a project to improve this process. Apply Deming cycle to clearly identify the problem and analyse the current process or situation carefully and consider the impact of the improvement on others and understand how the improvement can be measured. Use continuous improvement tools and prepare an implementation plan detailing responsibilities for team members. 

The credit division of Felco analyses data to ensure management has access to timely and relevant information on which to make decisions. Specifically, one of the credit team's responsibilities is to devise, evaluate and continuously improve processes relating to new customer account opening and billing with the overall objective of minimising the company's financial losses from unpaid bills. 

Description of the problem: 

The bad debt rate is high for Felco and the expense has a direct impact on the profitability of the company. 

Objective of the continuous improvement project: 

• Assist with lowering Felco's bad debt rate to improve profitability and enable Felco to offer customers cheaper services and special promotions such as free calls at certain times of the day. 

• Identify the bad debt rate of customers that had their application accepted due to a manual override by the credit officer and compare this rate to customers that were accepted automatically but in a low-range score- 315 to 322. This will assist in determining whether Felco is automatically accepting customers that shouldn't be accepted or at least considered more closely. 

• Identify a typical profile of a customer that is a bad credit risk, to assist with analysis.

Score	Action
Less than 310	Application Declined
Between 310 and 314	Override considered
315 and above	Application accepted

Q1. In groups of 4, analyse the situation and encourage participation of the staff in the decision making process. Brainstorm with the team and arrive at a process to decrease the bad debt rate. Post discussion document and flowchart the process. 

Q2. What methods you would use to present the new process to the team members? 

Q3. How can you obtain feedback form the team members on the improvised application acceptance structure?