LSS Green Belt

Assignment 1: Lean – Value Stream Map

One person from each team should upload assignment to Canvas. Please make sure all your team members’ names are in the document cover page.

Case Study: The Payup Insurance Company

You have just been hired by the Payup Insurance Company to improve their claims processing.  Customers have complained about the delays in processing, and Payup Inc. has found that the costs of processing claims are too high to be profitable enough. You begin by looking for opportunities to eliminate “Muda” (waste) in the process. The number of claims per day averages 200, and a day is 7.5 hours.You have discovered the following steps in the processing of a claim at Payup Inc.

Task #	Task Name	Task Time	Dedicated Resources	Quality Level	Current Inventory / wait time / delays	Distance Traveled
1	Call Received	15 min.	6
2	Enter more data after call ends	7 min.	4	50%	920 cases
3	Wait for Available Adjustor	1.5 days			5 cases
4	Adjustor calls customer to verify data	20 min.	13	89%	3 calls to reach customer over 2 days
5	Customer submits 2 repair estimates	4 days		100%
6	Adjustor travels  to site	50 min.		95%		11 miles
7	Adjustor inspects damage, enters data	65 min.		75%
8	Check mailed  to customer	4 weeks	3	94%	400 requests for checks

Adjustors are paid on commission, based on number of completed estimates done per day.

This case may be missing some needed information, may have extraneous information, and some tasks listed above may accidentally include waiting time not clearly separated from the task time. You will also need to convert some of the units provided to be consistent (days/hours/weeks). Make any assumptions necessary regarding the operational definitions of the data provided above, or about anything else that you think is pertinent but not provided.

1. Draw a Value Stream Map of the existing process (using any software package, or just draw it manually and take a picture of it with your phone).  Be sure to include the stair step at the bottom with Lead times and task times at each step. Compute Takt Time.

2. Calculate the Total Non-Value-Added Time for the process (the sum of the time waiting between steps) and the Total Value Added Time (the sum of the times within the process steps).  Add them together to get the Total Throughput Time (or the Process Lead Time).  Divide the Value-Added-Time by Total Throughput Time, and multiply by 100 to get the Process Efficiency as a percentage.

3. What part of the process needs to be improved most? Make suggestions for how the process might be improved to reduce Total Throughput Time.