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Process Measurement and Improvement
The case is based on an insurance service company which traced back to 1994. The company was facing problems in controlling and improving service quality and operation performance. This essay will stress on introducing the SPC (statistical process control) to DAV and providing suggestions on improving both the SPC and the company’s operation performance. The five questions required are covered and allocated into different parts of the essay.
DAV: Situations and Problems
1. Background Information
1) DAV was one of the world’s largest insurance companies whose main business is in Germany and in retail insurance. DAV knew that it was significant to maintain that position as smaller insurance companies armed themselves to attack their primary market and were seeking the way to improve the management process.
2) DAKG was the back office part of the operation, focusing on the retail side of the business and it processed applications from new customers for policies, changed policy information, carried out various legal registrations, and kept track of a customer’s personal information.
2. Problems and current methods
Problems: As DAV’s Business volumes were exposed to seasonal fluctuations and longer circle change in the economy, two critical problems emerged as a drawback to improve the operation performance:
1) A difficult capacity management problem emerged as in the heavy days the transaction volume will be twice of lighter days. The work quality decrease significantly during the heavy days; meanwhile, in order to monitor and control the quality, tremendous human resources (and possibly highly unpracticed and inexperienced) were raised.
2) In measuring and controlling the process’s quality, DAV was using accuracy rates of different processes to get the information. However, the drawback of this method is that it only gets “numbers”, but the issue of “what to do with the number when you get it” cannot be solved. As the previous simple method of fraction defective average is not enough for operation management - Having only fraction defective on hand is meaningless, solving this problem will be the key in improving the operation performance.
3. What DAV needs
In conclusion, what the DAV need is a project as Process Measurement and Improvements (PMV) that can effectively monitor and control the process’s quality. What is important is introducing an instrument/ tool that can appropriately measure and reflect the process accuracy rate.
SPC: Introduction and Sample
To introduce the SPC to DAV (in a 30 minutes’ presentation), we will show the SPC’s definition, its advantage and fitness into DAV comparing to the previous method, together with a sample to illustrate how it works and controls.
1. SPC: Definition, advantage and its primary challenges
Statistical Process Control (SPC) involves using statistical techniques to measure and analyze the variation in processes. It is most often used to monitor the consistency of manufacturing processes. The goal of SPC is to get and keep processes under control.
SPC has a considerable advantage of early detection of problems. Under SPC, variations in the process that may have negative impact on the quality of product or service can be detected and corrected. SPC is not only about the numbers, but also about the checks on the process that whether the variations are out of control. SPC includes control charts like X-bar Chart, R-Chart and P-Chart that represent certain descriptive statistics. P-chart of SPC is a very important control chart for quality attribute data. It can measure the...