The case, Manzana Insurance Fruitvale Branch, deals with performance assessment and improvement of service processes in a market that is very sensitive to response time. Branch offices of two companies in direct competition are described, and the impact of response time on performance is alluded to in the case.
The following problems have been identified at the Fruitvale branch : Declining profitability
Increasing TAT leading agents to take their businesses elsewhere High renewal loss rates because of increasing number of late renewals
The above problems are caused by inefficiencies in the process. Further, the problem is compounded by employees not delivering output efficiently because of influence of incorrectly calculated TAT (Pygmalion effect).
In Exhibit 3, the manager has calculated the Total TAT as 8.2 days assuming that various activities wait for earlier activity to complete before starting, e.g. Underwriting starts work after 0.6 days within which DC clears backlog. Further, it assumes that policies move from one activity to another in batches equal to total number of policies with the department. An illustration of this is shown in the following Gantt chart.
The above chart illustrates the case when pending work is started in all departments simultaneously and completed in batches. It is...