Eiic

Operations Strategy Case Brief – Engineering Inspection & Insurance Company

Summary of Issues

At the core of EIIC problems is how the company operates when dealing with new business. Management is not recognizing the true role of the independent agents. The structure of the employees, specifically the inspectors, from incentives to work flow is not working. The company has a high turnover in a number of groups, but critically in inspection. Even though salary may be on par with other companies, lack of autonomy, on call 24 hours a day, and lack of performance incentives are likely driving employees to seek other opportunities. These issues are resulting in product execution delays that are impacting their customers and end users.

Analysis

The corporate goal for delivery of a policy to an independent agent is 14 days. However currently the process is taking an average 43 days (Figure 1). These means the process is taking three times as long, and customers are waiting an average of 30 days or 6 weeks for their policy (Assumed 30 Business Days). During this time the company is not collecting premiums from these polices, which is a loss in revenue. Inspectors are given a geographical area that they must serve. However this does not take into account the volume expected or time required of the inspections needing to be completed. One inspector might be very light or have weeklong inspections coming up that will cause huge delays. In addition inspector must leave what they are doing right away to attend an emergency, this will contribute to the delays in completing the work. Another large delay comes from the added step of having a supervisor review the inspections. There might be some valid risk prevention to having this step, however it is probably caused from the supervisors needing to review the reports more in-depth or provide training to the inspectors. Though it is hard to measure this indirect cost, the direct cost of the high turnover of inspectors...