Mutual Insurance Company Iowa Essay

986 WordsDec 11, 20104 Pages
The business problem facing Mutual Insurance Company of Iowa is that it is not operating as a lean operation, there is an urgent need to standardize claims processing and to keep variability to a minimum. In addition, Mutual Insurance needs to improve claim response time and customer service. Mutual Insurance of Iowa extensive sales growth this past year has resulted in record levels in claims followed. Mutual Insurance is processing over 2,500 claim forms per day and disappointed fewer than 2,500 forms a day are flowing out. The total time to process a claim, from the time it arrives in Mutual’s office and the time a claim check is mailed, has increased from 10 days to 10 weeks and this has turned in a problem because the actual processing of a claim does not take than 3 hours of actual work. (Heizer & Render, 2010) Mutual Insurance Company of Iowa (MICI) has a significant insurance office facility located in Des Moines, Iowa. The Des Moines office is responsible for processing all of MICI insurance claims for the entire nation. With MICI increased sales over the past year, the processing of claims has also increased. (Heizer & Render, 2010) MICI currently processes over 2,500 forms for claims a day and Mutual is unable to process the claim as quickly as they are arriving, in fact, Mutual used to be able to handle a claim in 10 days and they are now averaging 10 weeks, and customers are finding this unacceptable. Ms. Sally Cook, the manager of Claims Processing, is aware immediate action must be taken because the reality of the claims processing is a claim takes about 3 hours of actual work. Ms. Cook has decided to try a JIT approach to claim processing which is a necessary action at this time because JIT correlates with quality because costs decline from less waste, rework, duplication and unnecessary work. The freeing of resources by JIT will provide

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