Operations Chapter 1

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  1. Describe operations management.
    Managers focus on Quality, Timeliness, and Cost Control.
  2. How are the four functions of management applied at each level of the corporate hierarchy:

    The Strategic Level
    • Planning horizon of 3-5 yrs.
    • Set the tone and shape of corporate culture.
  3. How are the four functions of management applied at each level of the corporate hierarchy:

    The Functional Level
    Planning & organizing w/in a given area of specialization, ensure that the units activities support the co's strategic direction.
  4. How are the four functions of management applied at each level of the corporate hierarchy:

    The Operational Level
    • AKA tactical or front-line level.
    • Carry out the org's day to day business activities.
    • Emphasizes the management fx of directing and controlling.
    • Planning/organizing more focused, shorter planning horizon.
  5. What approaches do companies use to improve operational efficiency.
    • Process improvements: automation, new technology, vendor services.
    • Offer staff desirable & flexible working conditions.
    • Provide trianing & education for staff.
    • Use measures & controls to find where to improve.
  6. Automation and process improvements
    Improves processing speed and accuracy, reduces human intervention and costs for staffing. Document imaging, knowledge based uw systems, prefilled screens technology for call centers. First contact resolution. Vendors.
  7. Desirable Working Conditions
    Employee retention! Reduce turnover. Keep empees who are trained & experienced. Flexible hours, part time work, split shifts, space management, TELECOMMUTING.
  8. Providing job-relevant training and education
    Supports staff productivity by giving training and education not only when required (ie ethics) but targeted to support individualized staff development plans.
  9. Using controls effectively
    Effective management requires prompt attention to corrective actions, up the management chain.
  10. Discuss value management and the value chain and distinguish between value-added functions and support operations.
  11. Describe three broad categories of work functions in insurance and financial svcs operations, and distinguish b/t transactional work, transitional work, and knowledge work.
  12. Describe the ins industry and its major characteristics.
  13. Describe the trends and issues affecting the ins industry, including broad societal trends.
  14. Operations
    The activities involved in producing goods and services.
  15. operations management
    Managerial efforts to ensure that the products nad services a co. provides to customers meet stated quality standards, are timely, and are delivered profitably at the lowest reasonable cost to the co.
  16. management
    The organizational role of planning, organizing, directing, and controlling.
  17. functions of management
    Activities that ppl in management roles perform w/in an org, traditionally including planning, organizing, directing and controlling.
  18. planning
    An activity that anticipates environmental changes, selects preferred future outcomes, avoids undesirable future outcomes, and determines the mix, cost and timing of the resources necessary to support the co's competitive position and long term viability in the future.
  19. organizing
    An activity that consists of differentiating and classifying resources for the purpose of coordinating the activities of a complex system.
  20. directing
    In management, an activity, consists of supervising the work of others. Encompasses leadership and mentoring roles of a manager as well as the decision process necessary to adjust to changes in plan, outcomes, or business.
  21. controlling
    An activity, consists of ensuring org'l processes, assigned resources, and assoc'd outcomes all conform to the org's mission, goals, strategies, policies, plans, and procedures and to applicable regulatory requirements.
  22. organizational pyramid
    A triangular graphic for displaying the formal hierarchy of power and authority in an organization.
  23. org chart
    A herarchically patterned array of boxes and lines depicting the formal lines of authority, responsibility, and communication in an organization. Also known as organization chart.
  24. strategic management
    In business, the process of providing overall long-term direction to a co.
  25. automation
    The operation of a process, system, or piece of equipment w/out human intervention.
  26. environmental management
    An effort to blend co needs w/staff productivity by incorporating job design aspects including flexible hours, part time work, split shifts, space management, and telecommuting.
  27. value chain
    As described by Michael Porter, a model for analyzing which co. functions or ops contribute directly to a co's competitive position.
  28. process
    A series of ongoing operations, work activities, or tasks ordered in a definite sequence and directed tward achieving an end result. The end result of a business process is typically to create something of value for a customer.
  29. value chain diagram
    A geographical depiction of the chain of transformative functions, operations, or processes that directly add value for customers and owners.
  30. value-added function
    In value chain analysis, a fx that has the effect of increasing the amount of money customers pay a co.
  31. support operations
    Operations within a co. that support the value chain but dont directly add value.
  32. new business acquisition functions
    A fx where an empee performs 1 or more of the activities to close a sale, initiate new customer accounts, pay commisssions to sales producers, process and code insurance apps, uw customer apps, issue ins pol's, and process initial premiums.
  33. administrative and support functions
    A fx where either managerial or nonmangrl empees do stuff to support operational or production activities, but do not directly perform those activities.
  34. service functions
    Fx's where empee provides service directly for a sales producer, purchaser, or user of an ins. product; serves policyholders making premium payments and policy changes on in-force business; or helps deliver policy benefits in a claims setting.
  35. transactional work
    Work dedicated primarily to handling various written media, so that empees doing this work have only a lim'td range of customer interaction & have very little need for specialized knowldge.
  36. transitional work
    Work that consists of performing routine tasks, plus empees must have important knowledge in a specific area, such as about products, technology or customers.
  37. knowledge work
    Work where empees must interpret info within a specific, yet broad, domain; and to use skills and knowledge to define problems, identify alternatives, solve problems, and develop intellectual capital.
  38. industry
    A set of co's engaged in a particular commercial pursuit.
  39. financial services industry
    An industry consisting of co's that provide svcs to support & enhance the functioning or security of financial assets, which may include wealth building or preservation, tax strategies, risk mitigation, and retirement protection.
  40. insurance industry
    An industry consisting of co's that provide svcs to protect & grow financial assets.
  41. industry sector
    A part of an industry comprised of org's carrying out a similar fx w/in the broader industry.
  42. globalization
    A trend where co's extend their operatijons beyond the geographical and political boundaries which formerly constrained their expansion.
  43. consolidation
    A trend toward mergers, which leads to fewer sellers in the industry.
  44. convergence
    A breakdown of traditional distinctions b/t sectors of the financial svcs industry.
  45. ownership convergence
    Trend tward a situation where large corp groups gain ownership of several formerly independent co's that operate in different sectors of the financial svcs industry.
  46. product convergence
    Trend tward a situation where products developed in one financial industry sector gain features formerly associated with products in another financial sector.
  47. distribution channel convergence
    A trend tward a situation where products issued by one financial industry sector are sold thru distribution channels formerly associated with another sector of the industry.
Card Set
Operations Chapter 1
Intro To Operational Excellence for Insurance Companies
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