Using Kaizen Techniques To Streamline Work Flow And Improve Capacity

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Streamlining Work Flow in Insurance Operations

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Client: A regional property & casualty insurance group specializing in insuring commercial enterprises
Industry: Insurance
Service: Rapid Process Improvement (Kaizen) events

Challenge:

Sought to engage employees in business process management
Help employees identify ways to improve an undefined, manually intensive process

Solutions:

Wanted to find ways to standardize work, enforce standards, and create a more effective work flow
Objective was to be 100 percent compliant with facility standards and increase capacity by as much as 20 percent
During three rapid process improvement (Kaizen) events, the team identified more than 60 opportunities and tested those with the most merit

Results:

The operations pilot area achieved a 50 percent capacity improvement – a $250,000 cost savings
With the capacity increase, the insurer also avoided another $20,000 in contractor costs
Gave the management and associates confidence to take the approach into other business areas

When Guidon’s workflow experts first examined the department’s processes, they were struck with the sheer volume of work-in-progress (WIP) files on the shelves. It was a visual that represented the vast workload of the operations department, but which also represented their commitment to getting the job done and servicing customers. In spite of the manually intensive nature of their work and the lack of standardization, the team got the job done by deadline 95 percent of the time.

However, this insurer built its business model on excellent service to its agency partners. As a result, senior leaders wanted to find ways to continually improve, turning that 95 percent into 100 percent while improving the quality of work. In addition, they hoped that review of current processes would lead to streamlining opportunities and that, in turn, would help them avoid the cost of contractors brought on to help them with auditing services capacity-crunch times.

Through a series of three rapid process improvement (Kaizen) events, Guidon and a team of the insurer’s employees focused on a few key areas of the operations processes. Although the head of the department was not convinced that the 95 percent on-time completion standard could be improved very much, she was open to exploring the possibility. By reviewing the work flow and adding standards, the team found a number of key opportunities for improvement, including:

Re-configuring the area’s floor plan for more effective work flow
Automating some manual components of the process
Creating a flexible workforce that can adapt to capacity fluctuations
Developing tools to help distribute work more effectively, maximizing productivity
Reducing physical custody of checks to streamline payment and reduce errors through hand-offs

Within six weeks of implementation, those shelves of WIP files were gone and the teams were completely caught up on their day-to-day work. With only 50 percent of improvements implemented, the department realized a 50 percent work capacity increase in its automotive functions and a 25 percent capacity increase in its worker’s compensation functions. Cost savings added up to more than a quarter of a million dollars, while turnaround time for some projects was cut by nearly a full month. As for the doubting manager—she’s now a believer and looking for more ways to implement process improvement strategies throughout her department and the rest of the company.