The article, Lean Service Machine is written by Cynthia Karen Swank. The main idea of this article is to describe how lean principles were used by Jefferson Pilot Financial, a life insurance and annuities firm, to increase productivity by differentiating itself from others, to reduce waste, and to explain how these concepts can be applied to other service organizations.
The managers of Jefferson Pilot Financial identified that an insurance policy follows a series of steps or processes, much like a product, from initial application, to underwriting, or risk assessment, to policy issuance, and that lean production concepts could be applied to these steps to reduce processing time, rework, idle time and other waste in the system. To do this the company began with the creation of a “model cell” that represented a microcosm of its entire process. This cell was developed around the concept of continuous flow processing to reduce the increase of work in system. Later, the knowledge gained from the model cell was applied to the entire company and produced some impressive results.
There were seven workflow lean production steps. The first one in, Linked processes were placed near one another, and here work was classified by function in separate departments. Procedures were standardized, was the second practice, where workers had been allowed to choose their own methods for storing files. The new system required all files be stored alphabetically in each work area. The other one was, Loop-backs were eliminated because some processes involved returning work to a previous step for further processing caused confusion and idle time in some steps. Therefore, the receiving team was split into two parts so that one group of workers received applications while another group assembled policies. The fourth step set a common tempo or pace with.
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