Tq Model And Methodologies Paper

TQ Model and Methodologies Paper

University of Phoenix

QUALITY MANAGEMENT AND PRODUCTIVITY/ MKT 449

RICHARD POWER, JR.

March 14, 2007

TQ Model and Methodologies Paper

In business today, Process Management has now become the most important trend in modern businesses. It is often dressed up as many other things but in the end, how the business delivers value is dependent on the operational effectiveness of its processes. In today's business even after achieving ISO certification, quality is still wanting. There is always a gap in people adhering to the standards. Success requires the ability to set the right balance between efficiency and flexibility, control and adaptability, compliance and nimbleness. Kaizen methodologies can help our organization achieve that. Kaizen will allow our organization to truly close the gap between strategy and operational change. The purpose of this paper is to introduce Kaizen and a Kaizen event to our leadership so that they can incorporate it into their strategic planning process.

The Problem

As our company has grown to over 60 full time agents generating more than 1200 policies per year, our local new business department has experienced difficulty handling the increased volume. We need to revise our current procedures to accommodate our growing organization.

The new business department handles several different things. We direct the initial stages of underwriting, which includes evaluating client for obvious declines, ensuring that all company and state required forms are present and properly completed, ordering medical records, and creating a master file before sending to our Home Office in Massachusetts. In addition to underwriting, we also follow the case through the complete underwriting process in Home Office, providing status to agents and obtaining additional requirements if needed. We also manage all policy owner service (POS) issues such as owner and beneficiary changes, premium payments, and policy inquiries among other service matters.

The problem that new business has encountered is the inability to effectively manage all the different aspects of the business as it grows. There is simply too much work to be handled by the current system. We experience a delay in application processing and the ordering of medical records. We lack the time to perform daily status checks on pending cases. We experience constant interruptions from the telephone or an agent who has come into our office to ask a question. The current average turnaround time from application submission to a policy in the agent's hands is approximately six weeks. We need to cut this time in half, and have a turnaround time of approximately three weeks.

The Solution

In our situation the company needs to improve operations performance to be able to compete more favorably in the market. In order to do it, they need to improve process times, efficiencies, quality and client (both internal and external) satisfaction in general. Our on time delivery is approximately 70%. Which is unacceptable. Lead times as stated earlier are this point are six weeks.

The management team needs to take action to improve it's operation performance and, before making any capital investment, explore with "Kaizen Techniques" and find out first if there are factors affecting our productivity and, if so, take appropriate action.

What is Kaizen one may ask. A Kaizen is a directed effort that applies Kaizen/ Lean principles to assess a value stream, identify sources of cost and waste, and reduce those sources, all within a short time frame. "The Kaizen philosophy is to "do it better, make it better, improve it even if it ain't broke, because if we don't, we can't compete with those who do."

Western philosophy can be summarized as, "if it ain't broke, don't fix it." The Kaizen philosophy is that everything, even it it ain't broke, can be improved." (2007, Hudgik, Steve)

Implementing Kaizen as a solution requires that we build quality into all steps of the process with an objective of 100% defect-free production. With Kaizen, we are improving your service by eliminating waste in the system. We will be supporting team members through effective management deployment and support, and we are instituting a never-ending cycle of improvement

A Kaizen event or blitz is an intense, brief effort to apply specific Kaizen/ Lean approaches to reduce waste, defects, and cycle time and implement improvements in a particular process or department. Focusing on the entire value stream allows you to identify and eliminate waste within each process and activity and between processes and activities. Improving our individual processes and the overall value stream flow can help us reap the largest benefits from our continuous