Deutsche Allgemeinversicherung

               Case Study-Deutsche Allgemeinversicherung

           Operations and Supply Chain Management

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Question 1:

Average defect, or P-bar over the 12 weeks’ diagnostic period, is calculated as is the sum of defective events divided by total sample size (300 samples per week, multiplied by weeks).  This results in a P-bar of 0.0522 or 5.22%, which is also known as the control line.

P-bar = error/sample size

P-bar = 188/300*12 weeks

P-bar = 0.0522 or 5.22%

The standard deviation is calculated as:

σ= P-bar(1-Pbar)/n

σ= 0.0522(1-0.0522)/300

σ=0.0128

The upper and lower control limits are set at three standard deviations, or 3-sigma, beyond p-bar:

UCL = P-bar+3σ LCL = P-bar-3σ

UCL = 0.0522+3(0.0128) LCL = 0.0522-3(0.0128)

UCL = 0.0908 LCL = 0.0137

Question 2:

Measurement Challenges:

• Better teams do more sampling

• Per my opinion better teams are right in some extent because they are already working very hard to maintain their accuracy and when they are doing well they are required to work on more samples to find their defects on the other side people with less hard work and less accuracy are doing less in finding their defects. So, there are two solution for this puzzle that either firm should use a universal size of sample or should use another tool to find the defects in more efficient teams.

-When is a mistake not a mistake? When it’s not important.

• There are two ways to solve this problem one is that firm should create a universal list of mistake and all the teams should follow that list there will not be exclusion and the second way is that if firm don’t want to create a universal list the teams should follow the rule that if there is a mistake it is mistake they cannot differentiate based on criticality because if a mistake is not critical then firm should not consider it mistake universally.

-Measuring lawyers

• Firm should use qualitative tool to evaluate lawyers’ performance not the quantitative one as the nature of their work emphasize mostly on quality not on the quantity. So, consider excluding lawyers from the SPC process as their processes are different and unnecessary for this form of quality analysis.

-Automatic charting

• Allowing automated charting will reduce the manual labor for some teams but if some teams can do automated charting and they allowed to do the same than it will create frustration among other teams and that team will feel privileged so that kind of step is not suitable for a firm where the whole result is the consequences of inter-connected efforts.

-Addressing managers that are “on the prowl”

• Communicate with management to explain and to convince them that this is an effort to enhance the quality of firm and subsequently it will be beneficial for all the people who work in the firm. Again, senior management have a greater responsibility for company’s actual performance. Hired consultant could be helpful in this task as he can convince in an efficient way senior managers. So, make sure that senior managers would be familiar with the methodology and benefits of SPC tool.

Suggestions to improve the process quality of DAV

As explained in the textbook, the only perfect way to determine error rate with 100% accuracy is to inspect each product or service at every stage, known as complete inspection which is impractical and costly. Therefore, a properly designed sampling tool should be created which defines the sample size, quantity, quality and appropriate manner to apply the method. With respect to the implementation at the DAV, there are several observations that should be taken into consideration: