The case deals with an insurance company by name Manzana Insurance.

The company is the second largest company for property insurance in California. Its main competitor is Golden Gate. Core Problem: The competitor Golden Gate has guaranteed a one working day TAT and a discount of 10% in case of a discount. However John Lombard comments that Golden Gates promise is a hefty and the company would end up paying a lot of compensation in the form of discount. But there was a serious issue with Fruitvale branch where the productivity was low. Analysis: An analysis shows that the information given in the exhibits (Policy Processing Times) was taken as of 1986 whereas the case facts state changes and automation in the system in the late 1980s and early 1990s. Some points to be noted are: The information on processing times is outdated. The standard completion time is way more than the average. SCT is the standard being used all over the company irrespective of the territory whereas differences across territories are quite possible. The assumption of only 5% of tasks taking more than the standard time may be erroneous. A use of average times shows lesser utilization levels for underwriters and policy writers. Raters are always under resourced. In case of SCT only policy writing was the only process which had sufficient resources. The calculations done by Tom and the actual figures from Ex. 7 differ considerably giving results with no coherence. Hence, the process of accounting for time required in processing a policy request at various stages seems vague and standardization of the same with necessary updating of values is required. Observations from calculations: We also observe from our calculations (presented in excel) that work allocation across different territories at all levels is uneven and hence there is over utilization and idle time as well. Other Issues: Late running of RERUNs due to prioritization leads to huge loss in renewals. RERUNs grow at 10.2% whereas RUNs grow at 2.5%. Hence increase in loss of renewals is also high. Agent fee for RUN is 25% and for RERUN is 7%. Considering all these things prioritizing RERUNs may not be a very good idea. FIFO may be preferred over prioritization.