Poznan Univeristy EMBA: Operations and Process Management

Assignment 2: DMAIC Project

Insurance

Download the Insurance.xls file for this assignment.

Refer to the “Claims Processing Costs” worksheet to answer the following questions.

Preliminary Analysis [Pre-define phase]

1. Create a Pivot Table of Cost/Claim by Region and Product to identify where the biggest opportunity is. Interpret.

2. Draw Histograms/Dot Plots and Time Series Charts for Cost/Claim by Region and Product.

3. Interpret the results – is there an opportunity for improvement in one or more regions for either product?

Assume that you are the manager at Region 1 for Product B. You have concluded after some discussion with the team rework due to errors in processing claims is a major contributor to your problems with cost/claim, and wish to tackle that as the focus of your project.

Refer to the “Claims Processing Errors” worksheet to answer the following questions.

Define

4. Analyze the errors (y) currently being made by the various employees to get a sense of the current state. Create a Project Charter. Clearly define your SMART objective.

(A process flow diagram would be part of the task at this point, but we will skip it for this assignment).

5. How do you make sure that the project goals are reasonable?

Measure

You now wish to analyze the potential causes (Xs) that lead to the errors.

6. Use the Fishbone Diagram to clearly identify the potential causes for the errors (y).

7. For all the Xs calculate the Mean, Standard Deviation, Minimum, and Maximum values.

Measurement Errors

8. Discuss briefly the kind of measurement errors that are possible in the data collected for this project.

Analyze

9. Draw scatter plots (optionally, you can also compute correlation coefficients) of each numeric explanatory variable (Xs) against the Error (y) variable. Write a short paragraph interpreting what the graphs/correlations tell you about the relationships.

10. For categorical explanatory variables (gender, training), create a Pivot Table and/or charts to compare the Errors by category.

11. Develop a regression equation to predict the Errors as a function of the explanatory variables. Interpret the coefficients.

12. Report the final predictive equation and its key statistics (Standard Error, R-Square).

Improve

13. What are your final recommendations regarding reduction of Errors or Cost/Claim?

(A new process flow diagram would normally be a part of this, but we will skip it for this assignment)

(Hypothesis Testing would also be done here after the improvements were made, to prove that y did in fact improve as a result of your project)

Control

14. What steps can you take to ensure that the new process takes hold and employees do not slide back to old ways?