Abstract
It has long been recognized in the literature that the Lean and Six Sigma methodologies can complement each other fruitfully. So far, however, researchers have not been able to derive definitive conclusions on how to combine these methods; furthermore, there is little research on how to apply them to service firms. We develop a framework for integrating Lean and Six Sigma instruments in the service industry, particularly in the insurance sector, and discuss it in the context of the insights we gained from a large-scale project carried out at a large German insurance company. We show how various instruments drawn from these two methodologies can be (a) adapted to the insurance industry and (b) combined productively to enable a company to achieve its strategy and goals. The conclusions we draw from these insights can help a wide range of companies customize the combination of the Lean and Six Sigma approaches to suit their specific needs.
Highlights
The insurance industry is currently undergoing significant changes
This study aims to develop a conceptual framework for integrating Lean Manufacturing and Six Sigma, show how these methods and the instruments they
The authors emphasize the need for developing an LSS toolkit customized to the banking, financial services and insurance (BFSI) sector. With this need in mind, in this study we present the insights we derived from a large-scale case study of a German insurance company that implemented a customized LSS toolkit to improve its processes
Summary
The insurance industry is currently undergoing significant changes. 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. We develop a framework for combining Lean and Six Sigma and adapt it to the service sector; the insurance industry. We establish a connection between the company’s overall strategy and the Lean Six Sigma approach In these respects, our framework differs from the Lean Six Sigma frameworks that Madhani (2018) developed for the combined BFSI sector, whose underlying principle is that a company has to create customer value to raise shareholder value. Our detailed case study shows how our conceptual LSS approach enables a company to pursue and achieve several individual goals at the same time and how different departments can adapt the framework to their own needs but apply the methodology consistently with the rest.
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