Improving Supply Chain Management


During the loan approval process, it is essential for an organization that gives out loans to understand what lenders and bankers consider important in making decisions to provide financing. Before the financial manager attempts to make a presentation to a lender, he or she should have some idea of the type of personality, the loan lender has. As a rule, lenders tend to be conservative, cautious, and pessimistic. When writing a proposal to an organization that gives out loans, it is important to state ways how to improve the loan process. It is, therefore, essential to improve customer service, to better overall productivity, better communication between different departments, and the time to complete the loans process should decrease.

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Basic Preparation for a Loan Presentation

In order to be successful in obtaining financing, a financial manager of an organization that gives out loans must distinguish the institution’s presentation from all others that lenders evaluate. The financial manager should also try to discern what the lender already emotionally believes about the deal and attempt to reinforce a positive belief and reverse a negative one. To be effective, a financial manager should be aware that lenders, too, think in stereotypes about nonprofit organizations that seek financing. They perceive nonprofit officers, who make financial presentations, as generally unprepared, hopelessly optimistic, and out of touch with economic reality (Green, 2010). When presenting a loan proposal, therefore, the successful financial manager should demonstrate better preparation, greater knowledge about the organization and its financial prospects, and better capability of repayment than any other customer, who approaches the lender.

In order to improve the loan process, it is advisable to build a good relationship with the right bank. An organization that gives out loans will benefit from the right association and could leverage such a relationship to integrate services, such as cash management, trust, capital markets, and credit. Pricing, quality of service, support, and technology are factors that must be considered when giving out loans (Zietlow, 2011). Customer service is supposed to satisfy all needs and demands of the potential customers in order to attract more clients and improve the organization’s image and reliability. Building a relationship requires a real investment of time for all parties involved. Strategies for relationship building are premised largely on trust, open communications, honest feedback, and team building. Setting realistic objectives is fundamental and provides the framework for implementing agreed-on procedures and service requirements. Regular meetings and follow-ups ensure open communication. With the rise in bank mergers, takeovers and consolidations, managing a relationship has become increasingly challenging. When a strong relationship among all parties has been cultivated, problems and uncertainties will be more manageable and less stressful.

Overall Better Productivity

The success of the loan approval process depends on overall better productivity. Total quality management is a helpful tool in this process. Oftentimes it is simply called continuous improvement (Green, 2010). The four steps involved include: (1) Creating a vision and mission statement; (2) understanding suppliers and customers; (3) encouraging cross-functional collaboration; and (4) focusing problem solving on removing root causes in order to produce significant gains. Involving the bank relationship management and other vendors in assessments will provide valuable feedback to internal staff (Hurd, 2010). The loan approval process also relies on quantitative measures and statistical data gathering to evaluate results and monitor process environment. Through regular reviews and audits, fine-turning can be pursued and changes can be instituted in an organized manner. In so doing, overall better productivity and efficiency will be achieved.

Faster time to complete the loan process is considered to be essential in improving supply chain management. Tremendous exposure to current and emerging technologies and information is an additional source of the loan approval process. Likewise, network with peers and company professionals to accelerate learning opportunities and implement changes that can be applied in different departments. Management must invest in staff advancement opportunities. Cross-training of staff should be supported to ensure continuity in operations. Ongoing training is recommended with backup personnel assigned to critical loan functions (Zietlow, 2011). As advances in technology lead to changes in how tasks are performed, it is advisable to document procedures. A manual should be maintained and updated to reflect any organizational, bank, and system changes that may occur in procedures for initiating wire transfers and transactions. Documentation pertaining to banking resolutions and investment guidelines should also be included. Centralized record keeping will ensure continuity and minimize disruptions in operations.

New Opportunities

Technology is replacing many paper-based applications, as it becomes more affordable and accessible. However, technology leads to the need for greater security, fraud control, and regulatory requirement. In implementing new processes driven by technological advances, an organization that gives out loans should not cut costs at the expense of flexibility and control (Green, 2010). Increased integration of business systems is another trend made possible by advances in technology. Functions and services, such as accounting, management, securities, and trust are available through computer interfaces and provide significant enhancement to information reporting. Fully integrated systems will serve as a cornerstone of a financial function of an organization that gives out loans, providing control, decision support, and audit traits. Faster availability of financial information is helpful in analyzing and reengineering work flow.

Total quality and reengineering processes are providing opportunities and solutions. Outsourcing is another option that has been gaining acceptance. Partnerships with banks or service providers should be explored. Changes that can benefit loan practices are oftentimes known in advance by bank officers. A good relationship can be a worthwhile investment. Short-term and long-term investment policies should be designed and implemented in any organization that gives loans. After the short-term needs of the organization are met, the growing organization will reach a level of maturity. As with short-term investment policies, the long-term policy must state the return objective in very clear terms. The goal is to maintain or enhance the purchasing power of the endowment to maintain the activities it supports. This objective should be stated in terms of the “real rate of return”, defined as total return less inflation (Hurd, 2010).

Developing a socially responsible investing policy is rather efficient for the organizations that give loans. If funds will be internally managed, an organization’s financial staff should be given a written investment policy reflecting management’s views on social issues. For organizations that internally manage their investments, information will be needed on which investments to avoid. The benefits and costs of a socially conscious investment policy must be weighed by an organization’s managers – and its course must be set accordingly (Green, 2010).  Once the asset allocation decision has been made, diversification strategies should be employed to further enhance the success potential for the long-term investment portfolio.


In conclusion, it is worth mentioning that presenting a loan proposal, the successful manager should demonstrate better preparation, greater knowledge about the organization and its financial prospects, and better capability of repayment than any other customer, who approaches the lender. Faster time to complete the loans process, better customer service, communication between the different departments, overall better productivity, automation and technology should be taken into consideration. It is evident that when a strong relationship among all parties has been cultivated, problems and uncertainties will be more manageable and less stressful. 

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