85% to 96%....
Problem: The claims cost for this international trading company was $1 million per year. Unfortunately, claims in the company were often viewed as a situation for the claims group 'to clean up'. To add to the problem, staffing for the department was treated as low priority and entry level only. These claims were created from late shipments and/or damaged goods shipping in excess of 18,000 oceanic containers per year.
Solution: A clean sheet approach was employed to design an ideal work flow and organization structure for the group. All task related work was mapped out in process flows redesigned to lean standards. New position requirements were created and an organization gap analysis was completed to address the talent needed to succeed. Metrics of success were identified to drive excellent performance coupled with a reward system to reinforce empowerment. Finally, new business practices were introduced to bring both the trading and claims organizations together to jointly problem solve issues and resolve differences.
Results: After initiating the change plan there was a 27% reduction in the number of claims filed; the recovery ratio went from 85% to 96%; and the net claims expense fell 37% or $370,000 per year.
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