Mutual Insurance Company of Iowa
Mutual Insurance Company of Iowa
The Mutual Insurance Company of Iowa has experienced a significant growth in sales within the last year, and in turn, has experiences a significant increase in insurance claims. After careful consideration and evaluation, the Mutual Insurance Company has elected to incorporate significant operational changes to meet the demands of the increased volumes. Specifically, incorporation of a lean operational model will be discussed.
Pertinent Background Information
Over 180 employees at Mutual Insurance Company of Iowa are responsible for processing all of the claims for the United States. A recent increase in the volumes of claims has resulted in an increase in claim processing times from 10 days to 10 weeks. Varying processing procedures, varying levels of claim approvals and the additional volumes has resulted in unacceptable delays needing immediate resolution. Relevant Issue Remediation
Mutual Insurance incorporated many lean operations, specifically, a just-in-time approach of continual problem solving focusing on throughput. Incorporation of a just-in-time model allows for elimination of waste, reduction in variability, and improved throughput (Heizer and Render 2011). Problems Requiring Resolution
An area reviewed that needs resolution is the significant inefficiencies realized from using a multi-layered review and approval process. Some cases needed as little as two people to review the claim while other claims need as many as four people to agree to the resolution of the claim. This resulted in many inefficiencies and unfamiliarity’s with the processes given the varying processes needed.
Another major area needing immediate attention is the variability of forms used in the reporting and processing of the claims. A multitude of different forms has resulted in a slower workflow and increased processing times just because employees are unfamiliar with where the information needed can be located. Elimination of duplicate and varying forms could result in significantly improved efficiencies and reduction in expenses.
Appropriateness of Actions
Incorporation of any changes that can have a significant impact on throughput is necessary in this situation. The fact that processing time has increased from 10 days to 10 weeks is a statistic that needs immediate resolution, especially if sales and volumes continue to increase. Discussion Questions:
1. Identify the attributes you would expect the Claims Processing Department at MICI to have once the new JIT system is in place. After incorporation of a just-in-time system, MICI would experience significant improvement in throughput, waste elimination and reduction in variability. 2.What will the restructured cell layout for claim processing look like?
3.What assumptions are you making about personnel and equipment in the new group technology cell layout? A few assumptions are made with the new cell layout. First, space for and changes would be available. Second, financial resources to incorporate changes would be available and lastly, personnel would be able to buy-into and incorporate these many changes. 4.How will the new JIT oriented system benefit the MICI operation? Explain? A newly oriented Just-In-Time model would benefit MICI through greatly improved efficiencies resulting in the ability to throughput the back-log seen from the increased sales and resulting claims needing processing.
In conclusion, incorporation of many procedural and operational changes was incorporated by Mutual Insurance Company if Iowa. Specific focus on a just-in-time model resulted in significant elimination of waste, reduction in variability and improved throughput.
Heizer, J., & Render, B. (2011). Operations Management Tenth Edition. Upper Saddle River: Prentice Hall.