Mutual Insurance Company of Iowa (MICI) has a major insurance office facility in Des Moines, Iowa. The MICI office facility in Des Moines is the one responsible for processing all their insurance claims for the entire nation. With this, the company is experiencing rapid growth of sales which resulted in corresponding increase in customer’s claims. However, the claiming department was unable to cope with the increasing volume of claims, which leads to the disappointment of their customers.
Sally Cook, the manager of Claims Processing, suggested using a new kind of system, the JIT system.
This new kind of system requires for the training of the managers and employees for them to able to be multi-skilled. JIT system also required for the restructuring of the company. If this new system will be implemented well, it will help with the current problem faced by the company and will in turn enhance production efficiency and increase customer relationships.
1. Identify the attributes you would expect the Claims Processing Department at MICI to have once the new JIT system is in place.
Since the company proposed that the employees should have cross-training exercises to be able to help in a variety of insurance claims processing, it will manifest that workers are flexible and are capable of working with various claims thus will result to a more efficient output by the employees.
The employees who have been trained are the key success factors to the improvement of MICI with the help of the JIT system.
2. What will the restructured cell layout for claim processing in Figure 16.10 look like? Draw it. 3. What assumptions are you making about personnel and equipment in the new group technology cell layout?
a. Decrease cost of labor
b. Increase in assets such as equipments
c. Higher utility expense
d. Personnel are flexible and can handle different claim processes
e. There will be specialization for each process
f. Production equipment will be located in one central area
g. Increase in employee training budget
h. Improvement in the equipment utilization
4. How will the new JIT oriented system benefit the MICI operation? Explain.
The JIT system, if installed and implemented properly, will have the benefits of the following to the MICI operation:
a. The new system will reduce setup time and schedule delays since the production will be continuous. The forms will arrive and will be processed at the same day. b. Improvement in the flow of goods and services. The claim forms will be processed and cleared as soon as they arrive. c. Higher customer satisfaction. The company can offer services that can go in accordance to the demands of the customers. d. The company staff and workers will be more productive and multi-skilled since they have been trained comprehensively. e. The new system will reduce errors and defects in services since there will be quality control in the production.