TABLE OF CONTENTS This case study is from Mejabi (2003). USAA is an insurance company that started losing market share due to price competition from competitors and customer service complaints about excessively long waiting times. To reverse this trend the company needed to improve service levels and reduce cost by providing a fast, cost-efficient, high-quality, and customer-focused claims process. A process management approach was adopted, and a process management project was initiated. The objectives of this project were the following:
Seek ways to redesign the process to yield simpler and more cost-effective procedures for claims adjudication.
Reduce process lead times to have fast and effective customer service.
Improve customer-focused process characteristics in the company.
The process involved in this project was an office process. The following process performance metrics were used in this study:
Service lead time: Average response time for processing an insurance claim
Throughput: Claims processed per week
Efficiency: Percent net activity value to activity cost ratio
Following a standard process management procedure, the first step was to draw a process map. The process map is illustrated in Fig. 10.26. A simplified process map is illustrated in Fig. 10.27. The drawing of process maps helps us understand how the process worked. It was found that there were two types of insurance claims: simple claims and complex claims. The labor needs and work procedures for dealing with these two kinds of claims were quite different, as...
