![]() ![]() ![]() 1073) “Lean Six Sigma has become one of the most popular and proven business process improvement methodologies organizations have ever witnessed in the past”. 10) defined this combined approach, which has been dubbed “Lean Six Sigma” (LSS hereafter) as “a business strategy and methodology that increases process performance resulting in enhanced customer satisfaction and improved bottom line results”. 1999 Bhasin and Burcher 2006 Salah et al. This is also partly due to the overlap between these two methods (Hahn et al. As a consequence, quality improvement concepts such as Six Sigma or Kaizen gain recognition resulting in a simultaneous application of Lean and Six Sigma (Harry and Schroeder 2000 Spear 2004). For that reason, Lean strives for perfect quality (Womack et al. Solving problems that result from poor quality requires extra work, which is regarded as a waste of time. ![]() Lean Manufacturing (referred to simply as “Lean” hereafter) puts emphasis on the reduction of waste (“muda”), which is defined as every activity that does not add value for the customer but consumes resources (Womack and Jones 2013). While JIT is expensive and does not suit all production settings, most firms can benefit from the broader principles underlying the concept. In the late 1980s, Ohno’s Toyota Production System evolved into Just in Time (JIT) in the US (Shingo 1988 Pepper and Spedding 2010). To mitigate these problems, in 1948 he devised the Toyota Production System, which he continued to develop into the 1970s. In the late 1940s, Taiichi Ohno, a businessman and industrial engineer who worked with Japanese car manufacturer Toyota concluded that an unreliable supply meant missing parts, idle production plants and therefore higher costs. Similar changes were observed in the car industry much earlier. Against this background, many insurance companies try to optimize their internal processes with the eventual goal of achieving “leanness” and increasing the quality of their output (Koning et al. As a consequence, operational efficiency and cost reduction are now at the center of attention. Fierce competition places upper bounds on increasing revenues (Heckl et al. As a result of the prevalent low interest rates on the capital markets, the role of actuarial practice in enabling companies to achieve their ultimate goal of making profit and to create value is more important than ever. The insurance industry is currently undergoing significant changes. ![]()
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