Homeguard Insurance Company takes ten days to make payments oninsurance claims.

Question

Homeguard Insurance Company takes ten days to make payments oninsurance claims. Claims are processed through threedepartments: Data Input, Claims Audit, and ClaimsAdjustment. The three departments are on different floors,approximately one hour apart from each other. Claims areprocessed in batches of 100. Each batch of 100 claims movesthrough the three departments on a wheeled cart. Management isconcerned about customer dissatisfaction caused by the long leadtime for claim payments.

How might this process be changed so that the lead timecould be reduced significantly?

Explanation / Answer

A lead time is the period of time between the initiation of anyprocess and the completion of that process. Home guard insurance company is using the old technology of movingthe claims from one department to another department manually.Thishas to be eliminated by using technology such as Electronic datainterchange, data warehouse, data mining etc... , where all theseprocess refers to the transmission of data between computers.     Customer satisfaction is very important in anybusiness . So, Home guard should inform the customers that thestandard estimated process time is about two weeks and should tryprocessing the claims in a week and this technique will give thecustomers satisfaction as they could get their claims processedbefore they even expect it.

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