Operations Management

Case Analysis - 2

Manzana Insurance (Fruitvale Branch)

Group 13:

ANALYSIS
INTRODUCTION
The Fruitvale branch of Manzana Insurance is facing stiff competition and is being severely outperformed by Golden Gate casualty Insurance. On every measure of performance, Fruitvale branch seems to be falling apart. Following are the problems faced by Fruitvale branch:
1) Turnaround Time (TAT) is too high
TAT, or the number of days between the receipt of a RUN and the issuance of a final policy, is an important indicator of service quality used by originating agents to help customer choose an insurance company. Fruitvale’s average TAT of 6 days for processing a request far exceeded …show more content…
For example, it might happen that one particular territory (assigned to a particular underwriting team) is responsible for all requests in a particular day, leading to high workload for the team, while the other two teams are relatively underutilized. Instead, we propose that underwriters should be assigned requests from a common queue, making sure that all three teams are utilized equally.

• Instead of using the 95%ile of Standard Completion time, mean value of process completion time should be used to give a better and more reasonable estimate of throughput. This reduces the average turnaround time from 6 to 4.72 days. For calculations, refer Exhibit 2 in the appendix.

• Salary structure in the firm needs review to base variable pay on reduction in turnaround times and performance. This will drive efficiency within each unit.

APPENDIX

Exhibit 1: Process flow diagram for Manzana Insurance with capacity utilization

Exhibit 2: TAT calculations using mean processing times
Operation RUN's RAP's RAIN's RERUN's Workers/Teams Total Throughput
Distribution No. Of Requests 1 3 1 11 4 0.32 Mean Time 68.5 50 43.5 28 Total time 68.5 150 43.5 308
Under Writing No. Of Requests 4 10 7 47 3 1.18 Mean Time 43.6 38 22.6 18.7 Total time 174.4 380 158.2 878.9
Rating No. Of Requests 5 12 8 54 8 1.6 Mean Time 75.5 64.7 65.5 75.5 Total time 377.5 776.4 524 4077
Policy Rating No. Of Requests 5 0 9 46 5