Mutual Insurance Essay Example

The Mutual Insurance Company of Iowa (MICI) has an office facility in Des Moines, Iowa that processes MICI’s insurance claims for the whole nation (Heizer & Render, 2008, p. 662). Due to the company’s rapid growth, MICI is experiencing insurance claims processing problems to the point where there is an increasing backlog of claims and claimants threatening to pursue legal action (Heizer & Render, 2008, p. 662 - 663). The claims processing manager, Sally Cook, is going to launch a JIT approach in response to the lingering problems. Moreover, Sally is going to implement more standardization in claim forms, in the new claims processing department layouts, and will also develop extensive cross-training programs.
The issue that the company is processing lesser claim forms than it takes in on the front end is very concerning. This type of backlog will eventually lead to clientele seeking legal action and / or seeking new insurance companies to do business with. There is also a cost issue to making some of the reactive changes, i.e., implementation of JIT program and process layout re-coordination. However, there needs to be a cost-to-benefit analysis completed which will weigh the benefits of launching the JIT program and implementing a new process layout against the costs of not taking action. Implementing a JIT layout would reduce distance, space, and labor needs, as well as increase flexibility, which will enable adaptability to changes in the department (Heizer & Render, 2008, p. 662-663). I personally feel that the benefits of implementing a JIT system will outweigh the costs to implement the program; if nothing is done the MICI will lose business.

Mutual Insurance 3

1. Question: Identify the attributes you would expect the Claims Processing Department at MICI to have once the new JIT system is in place. Answer: After implementation of a new JIT system, the Claims Processing Department at MICI would experience more standardization,