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Deutsche Allgemeinversicherung (“DAV”) is a leading insurance company that prioritizes exceeding customer experience to retain and attract clients. However, one of their main obstacles is efficiently managing and retrieving accurate information and data across multiple divisions and locations. With competition on the rise, enhancing quality has become crucial. To enhance their customer service, Annette Kluck, the Head of Operations, initiated a Process Measurement and Improvement (PMV) project utilizing statistical process control (SPC).
The suggestion is to utilize online technology and implement a pilot program in the New Customer Policy Process department to enhance accuracy and improve customer service.
Regular monthly and quarterly meetings will be conducted to assess the effectiveness of the recommendations and ensure compliance with performance and productivity standards.
Deutsche Allgegeinversicherung ("DAV"), one of Germany's largest insurance companies, is currently experiencing competition from industry rivals such as Allianz, Credit Lyonnais, and Aetna. Moreover, smaller insurance providers aiming to offer tailor-made services also pose as competitors to DAV.
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In order to stand out from the crowd, DAV has placed great emphasis on customer service, aiming to differentiate themselves within the market. Ensuring top-notch quality and error-free processing of customer information has been a crucial aspect of DAV's strategy to retain and expand their customer base.
Annette Kluck, the Head of Operations, embarked on a Process Measurement and Improvement (PMV) project to enhance the quality of customer service. The project aimed to address a 12% error rate in the process of documenting customer information, which involved forms filled out by both customers and representatives.
Statistical process control (SPC) was chosen as the approach for improvement. However, it was challenging to determine whether the use of p-charts was the most suitable method. This was due to the unique characteristics of the insurance industry, where traditional manufacturing-style improvement techniques faced difficulties. One such challenge was the intangible nature of the service industry, making measurement more complex compared to the tangible aspects of manufacturing.
Despite the interest of different departments in the PMV project, there was a lack of education and training regarding SPC and its advantages. Some employees perceived the PMV project as a passing trend, while others were either not fond of the additional workload or did not grasp its purpose.
DAV faced another challenge in the form of inconsistent business volumes due to seasonal fluctuations. This created a capacity management issue, as transaction volumes would double on heavy days compared to lighter days. The corporate mandate of completing information on the same day resulted in long hours, employee frustration, and increased costs due to overtime. Furthermore, the quality of work suffered significantly during busy periods. To address this, management opted to hire more temporary employees to replace permanent staff, thus requiring additional overtime and reducing costs.
Approximately 51% of DAV's business in Germany originated from retail insurance. To apply for DAV's products, customers could either visit one of the eighty branches to fill out a form or contact an agent. These forms were then sent to DAV's Retail Transaction Processing ("VEG") division using intercompany mail. Alternatively, customers could fill out an application and send it via mail or fax to DAV, which would later be transferred to the Hamburg operation. Each employee at VEG worked a 7.5 hour shift, processing around 70 applications. If the information on the application was complete, a confirmation would be sent to the customer. However, 12% of forms contained mistakes which required an average of 20 minutes and cost DM 14.50/hr to correct.
All departments were required to have a minimum of 200 observations per week for sampling. However, some departments had to increase their sample size beyond 200 to ensure they had at least 3 incorrect forms. This increase in workload was not well-received by the departments. It is worth noting that each sample takes around 5 minutes to check.
Management was dissatisfied with the current method of delivering quality and thought that achieving 99% accuracy on forms was unlikely. By implementing Statistical Process Control (SPC), they can identify ways to improve their performance process. Testing the first 12 weeks using a p-chart will provide a measure of the correct/incorrect data range. Over time, the p-chart can provide insights into the direction and predictability of the process. This will involve analyzing the data.
With the data from the case, we utilize a 12-week period to assist in calculating the data.
The p-chart is used to measure quality and it is important to measure the lower and upper limits. If the measurements exceed these limits, there is a problem that needs to be addressed. By using the p-chart over time, DAV can predict and compare employee performance. Upper management should acknowledge that achieving results will take time due to the complexity of gathering information, conducting tests, and implementing process changes. Although the p-chart provides valuable information for control purposes, DAV should also focus on offering an attractive insurance package, training employees to be courteous, and encouraging customers to provide feedback for continuous improvement. It is crucial to reward employees in order to ensure successful performance.
However, there are some disadvantages:
Advantages:
Cons:
The proposal suggests combining Alternatives 1 & 2 by incorporating technology into the application process. The focus would be on conducting a pilot study for the New Customer Policy Process.
DAV aims to provide quality customer service in an increasingly competitive industry. To achieve this, they have implemented a website for customers to enroll in the application process. This approach is efficient and convenient, saving both time for the customer and labor costs for DAV. By utilizing technology, DAV can eliminate or reduce the margin of error. For instance, they can set mandatory fields that need to be filled in before proceeding to the next section. Additionally, a programmer can incorporate a feature that ensures correct spelling, thus minimizing misspelled names. The data collected can be easily analyzed using compatible software on a computer. Alternatively, DAV can operate kiosks for customers who do not have access to computers, ensuring accurate data entry.
By supporting the SPC, we can enhance the efficiency and accuracy of DAV's operations, ultimately leading to increased productivity and reduced costs for the company. Additionally, customers will benefit from an improved customer service experience, resulting in higher revenues over time. One challenge in applying SPC to the service industry, unlike the manufacturing industry, is that customer interactions are more diverse and customer-facing. However, introducing a pilot program to the New Customer Policy Process department will enable Kluck to experiment and identify the appropriate skills and measures that align with DAV's needs.
Management should concentrate its efforts on the department where there is the greatest opportunity to enhance data entry accuracy. It would be simpler to establish a single control environment and implement a set of rules specific to that department, rather than assessing and comparing results across the entire company. While other departments expressed interest in participating in the improvement process, it was confusing for them because the criteria and rules, such as sample size, were identical. This lack of differentiation is illogical, considering that departments have varying levels of variability and some departments, such as lawyers, are not relevant to Statistical Process Control (SPC).
Within a span of one month:
2-3 months
The text "
4 months
" remains unchanged.
Since this is the quarter, Kluck should assess the performance measurements of the website and the pilot program to determine how accurate they are. If the pilot program is successful in the New Customer Policy Process, Kluck can then begin implementing SPC in other departments.
Kluck will evaluate the data entered by customers on their website to measure performance. Running reports will help identify any incomplete or erroneous information. Monitoring website traffic will also provide insights into customer satisfaction with the online experience. If the pilot program is successful, the error rate should decrease. Employees will be involved and encouraged to interpret data, aiming to increase engagement and enhance workplace culture.
Less errors and a positive customer experience both on-line and through the New Customer Policy Process department should lead to increased revenues. Monthly meetings will be conducted to review the SPC and address any issues that may arise. Suggestions for improving the process are highly encouraged.
Improving Customer Service at Deutsche Allgemeinversicherung. (2016, Sep 14). Retrieved from https://studymoose.com/deutsche-allgemeinversicherung-company-case-essay
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