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III. Introduction
The Mutual Insurance Company of Iowa (MICI) is a major insurance company with one of its major
office facility located in Des Moines, Iowa. The Des Moines office has the responsibility in processing
insurance claims for the entire nation. In recent years, MICI has experienced rapid growth in its sales,
resulting to the increase of insurance claims received by the office, reaching as much as 2,500 forms on a
daily basis. However, not all of these claims are processed and accomplished in the same day. The office
can only process less than 2,500 forms per day, resulting to voluminous backlogs in claims processing.
Even though the actual work would only take an average of three hours, it normally takes Des Moines office
10 weeks to release checks or notice, thereby causing distress to both its customers and employees.
To resolve the issue, the management of MICI has decided to search for and implement a more
aggressive, yet economical system that will be able to handle the overwhelming amount of transactions
needed to be processed. With that, they have decided to try the JIT approach for claim processing.
Implement the JIT approach that shall efficiently utilize the Company’s resources and accomplish
the document processing of MICI office in the least amount of time possible.
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V. Results and Discussion
Just-in-time (JIT) is defined as “an approach of continuous and forced problem solving via a focus
on throughput and reduced inventory.” (Heizer and Render, 2011). It basically means to retain what is only
needed. This results to a continuous improvement, thereby minimizing time and cost without sacrificing the
The JIT principle, after being coined and developed in the 1960s in Japan, was largely used and
implemented in manufacturing companies who sought out the efficiency of the approach. Because of the
continuous process improvement required by JIT, many companies, even those coming from different
industries such as service providers, have also used the approach and applied it to their respective
processes.
Some of the JIT concepts have also been proven to be useful and fitting to organizations with
paperwork operations, like MICI. Their claiming process, when compared to a factory, may be considered
as simply converting the claims received (the raw materials) into a released check or notice (finished
goods). Throughout the conversion, numerous value adding activities have been done by the employees
According to Syed (2009), there are concepts that are usually adapted by such companies. These
include the following: 1. Consistent high quality; 2. Flexible workforce; 3. Standard methods; and 4.
Automation.
Ensuring a high quality output is one of the main improvements that the JIT system can bring in a
company. Through continuous research and study of the operations, MICI can drastically improve the
quality of its output that may result to less throughput time. This can be achieved by ensuring that the
employees are all knowledgeable about their job responsibilities, by providing trainings, seminars and
knowledge sharing sessions. Another area that MICI can improve on in order to provide a high quality is
the work layout. By ensuring that the documents can be easily transferred to the next step, or in this case,
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to the next processing department, the number of hours consumed due to motion and transportation of
documents may be lessened as well. The current layout of the company may be seen below:
ACCOUNTING DEPARTMENT
Worker Worker
1 2
Another concept of JIT that is useful for an operation similar to MICI is having a flexible workforce.
This pertains to molding employees to have different set of skills in order to have resources with broad
knowledge and thus enabling them to have higher responsibilities. This will result also to higher employee
productivity, and therefore, higher efficiency. Once the employees can perform other jobs, reassignment
and rerouting of tasks is possible, thus avoiding bottlenecks. Given this improvement, the work layout may
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also be improved upon. For instance, instead of passing through a single route, cross-functional routing
Another recommendation brought out in the JIT is to have standard forms for the claims processing.
This will provide advantageous to the Company because all the needed information from the customers
can immediately be gathered. This will also prevent further delays caused by incomplete documents.
Process automation can also be applied to the claims processing of MICI. For instance, there are multiple
computer systems available that caters to insurance companies. Such systems assist companies to record,
monitor, and manage all existing insurance policies. This will reduce manual processes such as pulling out
These are some of the improvements that the JIT principle can bring to the Mutual Insurance
Company of Iowa. Of course, implementing a major change in process may entail cost, but the Company
should not forget the benefits it would bring to the Company and its stakeholders.
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VI. Conclusion
Specific focus only a just-in-time model resulted in significant elimination of waste, reduction in
variability and improved throughput. Focusing in JIT, claim processing managers and employees are to be
trained for the JIT principle. According to the principle responsibilities for quality control activities are moved
to each employee, means each employee will responsible for the quality. Data entry skills also taught to
both managers and employees for the accuracy of the data that will reduce clerical errors.
The new system will not only fix the current problem but will have other benefits to company as
well. The new system will require respect for the people concept especially by the management to value
and respect the juniors by incorporating their ideas in decision making process and solving company
problems. Staff motivation and training will have to be undertaken for the JIT system to work effectively.
However according to Shili, (2011), JIT system may involve a major overhaul of company business systems
which may be difficult and costly. The system may also open the company to risks connected with the
supply chain.
Mutual Insurance Company of Iowa. By examining the current structure of the company, installing just-in-
time will help managers to cut down processing time by standardizing forms, reducing work-in-process and
reducing data entry timing. The company is expected to make various changes as stated before. Many
attributes are expected if just-in-time has been installed. Evidently, the system is good and applicable to
MICI company and if well implemented will fix the company problem.
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References:
Chang, H. (2009). An empirical study evaluating supply chain management integration using balanced
Gupta, A. (2005, May 31). Relevance of JIT in Service Sector. Retrieved from
Heizer, J., & Render, B. (2011). Operations Management. New Jersey: Pearson.
Niranjan, T. T., and Weaver, M. (2011). A unifying view of goods and services supply chain management.
Syed, F. (2009, August 29). Just in Time System in Services. Retrieved from
https://totalqualitymanagement.wordpress.com/2009/08/29/just-in-time-system-in-services/
http://shodhganga.inflibnet.ac.in/bitstream/10603/113891/13/13_chapter%204.pdf
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