Page 423 - Design for Six Sigma for Service (Six SIGMA Operational Methods)

Design and Improvement of Service Processes—Process Management 381

customer service complaints about excessively long waiting times. To
reverse this trend the company needed to improve service levels and reduce
cost by providing a fast, cost-efficient, high-quality, and customer-focused
claims process. A process management approach was adopted, and a
process management project was initiated. The objectives of this project
were the following:
• Seek ways to redesign the process to yield simpler and more cost-
effective procedures for claims adjudication.
• Reduce process lead times to have fast and effective customer service.
• Improve customer-focused process characteristics in the company.
The process involved in this project was an office process. The following
process performance metrics were used in this study:
• Service lead time: Average response time for processing an insurance
claim
• Throughput: Claims processed per week
• Efficiency: Percent net activity value to activity cost ratio

10.7.2 Process Mapping

Following a standard process management procedure, the first step was to
draw a process map. The process map is illustrated in Fig. 10.26. A sim-
plified process map is illustrated in Fig. 10.27. The drawing of process maps
helps us understand how the process worked. It was found that there were
two types of insurance claims: simple claims and complex claims. The labor
needs and work procedures for dealing with these two kinds of claims were
quite different, as illustrated in Fig. 10.27.

The drawing and study of these process maps also helps us understand the
following process performance metrics:

• Service cost: Average cost to process a claim
• Service lead time: Average response time for processing a claim
• Throughput: Claims processed per week

10.7.3 Process Diagnosis
Several methods were used for process diagnosis. First, the claim case
types were analyzed based on historical data. Fifty-two percent of claims
were of the complex claims type, and 48 percent were of the simple claims
type. Roughly 90 percent of claims ended up with insurance coverage, and
10 percent of claims ended up with no coverage. This case type distribution