Case study: Manzana Insurance – Fruitvale Branch
1. Bill Pippin as a newly hired manager assistant was not thrilled with the situation in which he found himself after only a week spend in the company. Apparently, Fruitvale Branch of Manzana Insurance was facing with many major problems, not only in terms of internal company business, but also problems with competition which is doing much better and is planning to improve even more. Regarding company’s business, too long turnaround time was identified as one of the problems. As well as this, number of late renewals increased, which affected renewals loss rate to be almost 50% every year. On the other hand, overall performance of their main competitor Golden Gate is better. We emphasize shorter turnaround time, which Golden Gate plans to reduce even more- to one day. One more advantage of Golden Gate in these terms is promising 10% premium discount in case of delay.
2. In our further analysis, we calculated actual flow time of each process step in order to identify bottleneck of the whole procedure. Since the first underwriting team has the highest total time needed to process request, we can say that it represents bottleneck. Following calculations support this statement.
DISTRIBUTION
utilization= Ri/ cRp= 39/43,88= 0,89
variability: Ci= Cp= 1 => variability effect= 1
average inventory= utiliyation effect= 0.69/ 0,11= 6,27
waiting time in queue: inventory/ demand rate=Ti=6,27/ 39= 0,16 days
T = Ti + Tp = 0,16 + 0,09 = 0,25 days
UNDERWRITING TEAMS
Territory 1: Ri=14,625; Tp= 28,4; ; Rp= 1/Tp= 1/28,4= 0,0352 requests per minute = 15,845 requests per day; c=1
utilization: ρ= Ri/ cRp= 14,625/ (15,845*1) = 0, 923
variability: Ci= Cp= 1 => variability effect= 1
average inventory= utilization effect= 0,851 / 0,077= 11,06
waiting time in queue: inventory/ demand rate= Ti= 11,06 / 14,625= 0,756 days
T = Ti + Tp = 0,756 + 0,06 = 0,816 days
Territory 2: Ri=13,15; Tp= 28,4; ; Rp= 1/Tp= 1/28,4= 0,035...