Mutual Insurance Company of Iowa (MICI) has a major insurance office facility located in Des Moines, Iowa. The Des Moines office is responsible for processing all of MICI’s insurance claims for the entire nation. The company’s sales have experience rapid growth during the last year, and as expected, record levels in claims followed. Over 2,500 forms for claims a day are now flowing into the office for processing. Unfortunately, fewer than 2,500 forms a day are flowing out. The total time to process a claim, from the time it arrived to the time a check is mailed, has increased from 10 days to 10 weeks. As a results, some customers are threatening legal action Sally Cook, the manger of Claims Processing, is particularly distressed, as she knows that a claim seldom requires more than 3 hours of actual work. Under the current administrative, there appear to be no easy fixes for the problem. But clearly, something must be done, as the workload has overwhelmed the existing system.
1. Identify the attributes you would expect the Claims Processing Department at MICI to have once the new JIT system is in place.
2. What will the restructured cell layout for claim processing in Figure 16.10 look like? Draw it.
3. What assumptions are you making about personnel and equipment in the new group technology cell layout?
4. How will the new JIT oriented system benefit the MICI operation? Explain.