Abstract
M.Tech. (Operations Management)
This study presents the findings of an investigation conducted at a local insurance company. The extent of lean thinking implementation within the Value-Added Products and Services (VAPS) Division of a local short-term insurance company is presented in this study, with a way forward provided on the basis of the findings from this study. As the South African short-term insurance industry is growing, and efforts are being invested in creating jobs to cater for a fast-growing market, insurance companies now find it vital to emphasise cost reduction, optimisation of operational performance, organisational effectiveness and waste reduction. Lean thinking focuses on delivering value to customers without any form of waste and has been proven to enable companies, mostly manufacturing, to achieve their highest level of competitive advantage. In the service sector, lean operations show the same result, but lean thinking is still a new concept for many service companies around the world, and specifically in South Africa. The 2014 KPMG Insurance Survey highlighted that in order to achieve a customer-centric business model, four pillars need to be considered: (1) customer experience, (2) digitisation, (3) big data and predictive analytics, and (4) lean operations. The study was conducted at a local insurer, located in Edenvale, Johannesburg, with a focus on the state of the implementation of lean thinking within the organisation in its VAPS Division, in order to achieve customer satisfaction. A mixed method methodological approach was adopted for this research as a combination of quantitative and qualitative data is considered epistemologically coherent and useful for verification and the generation of findings. Core processes within the division were identified and analysed in terms of waste and how waste is currently dealt with. Managers responsible for those key processes were interviewed and their staff members requested to participate in a survey regarding the extent to which lean tools were used within the key processes to achieve the organisation’s short- and long-term goals, and eventually customer satisfaction. Analysis of the results showed that the company does not implement lean thinking; however, it does utilise the tools of lean philosophy. Managers have never been introduced to the concepts of lean operations and, consequently, their employees are not aware of concepts associated with lean thinking. The short-term insurance industry is well aware of lean operations but has not extensively adopted its philosophy. The local insurer has opted for the introduction of lean practices within its business processes and has commissioned more extensive studies to be conducted in order to establish the feasibility of lean implementation within the organisation.