Backlog at the Insurance Branch
A district branch of a life insurance company has 210 proposal files pending. Seven clerical staff process proposals. The measured average is 50 minutes per file from receipt to dispatch, including a data-entry step. Staff are paid for 7 hours 30 minutes, but enquiries, meetings and tea breaks leave about 6 hours of productive time each. Two of the seven staff spend about 40 per cent of their day on counter enquiries. The other five process files, but two of them do data entry, where a recent audit found 20 per cent of entries need rework; each rework takes 25 minutes. One experienced clerk is on leave for three of the five days. The branch manager promises the regional office a five-working-day clearance. The union has said it will not accept compulsory overtime.
1. Calculate whether the branch can clear 210 files in five working days under present arrangements. Show your assumptions and conclusion.
Read the worked answer
Start with productive capacity.
- Productive time per person per day = 6 hours = 360 minutes.
- Seven staff give 7 x 360 = 2,520 minutes a day.
- Two staff lose 40 per cent of their day to counter enquiries. That is 2 x 0.4 = 0.8 of a full-time equivalent, so effective staff are 7 - 0.8 = 6.2 FTE on full-staff days.
- On the three days when one clerk is on leave, effective staff = 6 - 0.8 = 5.2 FTE.
- At 50 minutes per file, daily capacity is 5.2 x 360 / 50 = 37.4 files on leave days, and 6.2 x 360 / 50 = 44.6 files on full days.
- Five-day capacity = (3 x 37.4) + (2 x 44.6) = 112.2 + 89.2 = 201.4 files.
So the branch is short by about 9 files even before rework.
Rework makes it worse. If every file needs data entry, 20 per cent of 210 files, about 42 files, need 25 minutes each. That is 1,050 minutes, or 17.5 hours, equivalent to about 2.9 staff-days at 6 productive hours. Absorbing that within the same five days reduces capacity further and pushes the shortfall to roughly 12 to 15 files.
Conclusion: the five-day promise is not achievable by effort alone under present method. The manager must change capacity, method or the promise. Recording files as cleared when they are not would be false reporting.
2. Identify the bottleneck in the process and explain why adding general clerical staff may not solve it.
Read the worked answer
The bottleneck is not simply the number of clerks. It is the combination of data-entry rework and counter enquiries pulling trained processors away from files.
Evidence:
- A 20 per cent rework rate means one in five entries is defective. Each defect consumes 25 minutes of rework and may also delay dispatch. This is a quality constraint, not a volume constraint.
- Two staff lose 40 per cent of their time at the counter. Adding a general clerk who also does counter duty may simply add another person who is interrupted.
- The experienced clerk's leave removes knowledge for three days, so the remaining staff may slow down on complex cases.
Adding staff without changing the method has limits. New staff need training, and the 50-minute average includes steps that may not be divisible. If the counter is the interrupt source, more processors will still be pulled away. If data entry is the error source, more entries will produce more rework.
Better first moves:
- create a separate counter roster so processors are not interrupted;
- introduce a one-page checklist and a second-person check at data entry;
- pre-sort files into complete and incomplete, so incomplete files are not processed twice;
- batch data entry rather than switching tasks for every file;
- measure daily output and rework, not just files touched.
Only after those changes should the branch consider temporary redeployment or paid overtime.
3. Prepare a realistic five-day plan for the branch manager. Include what should be communicated to the regional office and what must not be done.
Read the worked answer
A realistic plan has four parts: capacity, method, communication and integrity.
Capacity
- Redeploy one trained clerk from another section for five days, with the section head's written agreement.
- Offer voluntary paid overtime to two staff for the two full-staff days; do not impose it, because the union has refused compulsory overtime.
- Keep the experienced clerk's complex cases aside for review on return rather than letting juniors guess.
Method
- Release one clerk from counter duty each morning and rotate in the afternoon.
- Use a completeness checklist at receipt so missing documents do not cause repeat handling.
- Do data entry in a batch with a sample check; rework must be corrected the same day.
- Triage: clear simple renewals first, flag complex or disputed proposals separately, and do not hide them in the count.
Communication
- Tell the regional office on day one that the present capacity is about 201 files, not 210, and that rework may reduce it further. Give a revised committed number and a daily progress report.
- Ask for either a two-day extension or one temporary staff member. A written, quantified request is stronger than a vague complaint.
What must not be done
- Do not mark pending files as dispatched.
- Do not skip data entry or the audit check to look fast.
- Do not make overtime compulsory.
- Do not blame the clerk on leave for a capacity problem that existed before the leave.
The plan should end with a short review: actual files cleared, rework rate, counter waiting time, and whether the promise should be renegotiated for the next cycle.