There are many ways to start looking at lowering costs. Some are more drastic than others, some take longer to implement than others, and unfortunately, some come with hefty price tags that make these solutions more of a long term investment than an immediate fix. This is why ReSource Pro decided to invest in Lean techniques that promote quick, small changes, and generate incremental improvements that build up to big impacts in the long run.

1. INTROTOLEANPRINCIPLES
Are you structured for profitable growth?
do what counts.W H I T E
P A P E R
IDENTIFY VALUE
MAP THE VALUE STREAM
CREATE FLOW
ESTABLISH PULL
SEEK PERFECTION

2. All insurance organizations are
subject to the ebb and flow of
market conditions, and many are
constantly tasked with doing more
with less. While these organizations
may not control the market and its
pricing fluctuations, they can
manage their costs and in turn their
bottom line.
The traditional way of looking at
cost has been Cost + Profit =
Revenue. In certain, inevitable
market conditions, insurance
organizations do not control price
or commission percentages, and
they see their profits diminish as
their costs increase. Desperate
times do not always call for
desperate measures, but they
certainly require innovative thinking.
ReSource Pro's Innovation Advisory
Council (IAC)* has found that the
principles of Lean theory bring a
new perspective to this equation.
LOOKING AT
COSTS WITH
LEAN EYES
When insurance
organizations do
not control the price
in the marketplace,
focus is shifted to
the cost of doing
business.
Looking at cost through
“Lean” eyes, Revenue -
Cost = Profit. This equation
puts the control back into
the insurance organization's
hands, allowing them to
control their costs and
maintain profits while
riding the wave of
low prices.
There are many ways to start looking at
lowering costs. Some are more drastic
than others, some take longer to
implement than others, and unfortunately,
some come with hefty price tags that
make these solutions more of a long term
investment than an immediate fix.
This is why ReSource Pro decided to
invest in Lean techniques that promote
quick, small changes, and generate
incremental improvements that build up to
big impacts in the long run. In an age
where most businesses desire immediate
solutions, Lean can meet that demand by
showing quantifiable returns in a short
period of time.
See more @ ReSourcePro.com*

3. WHAT IS LEAN?
WASTE NOT
Lean is a management practice that
considers the expenditure of resources for
any goal other than the creation of value
for the end customer to be wasteful, and
thus a target for elimination. In more basic
terms, more value with less work. Lean
Theory has developed from Toyota's
philosophy of Lean Manufacturing that
revolves around wasteful, necessary, and
value-added work performed during a
process.
Value-added work is what an
organization's customers are willing to
pay for. This work is essential to the
product or service produced and
delivered to the customer, so it doesn't
include things like re-work or error
correction. Unfortunately, if we analyzed
the work done in many insurance
organizations, we would find that much of
what occurs is ineffective, inefficient, and
constitutes more than 50% of work done.
Other necessary work, or incidental work
under present conditions, may be
essential for executing tasks directly
related to producing products or
services. However, it adds no direct value
from the customer's perspective. This
type of work may include work required
by the organization to meet business or
regulatory requirements, such as
completing FDA-required audits, activities
required by law, statute or contract, input
or documentation required by a carrier,
OFAC checking, and processes to limit
E&O risk.
Waste is action that is not essential for
the work being performed. This includes
waiting, correcting mistakes, rework,
overprocessing, unnecessary approval
steps, etc. In many organizations, waste
makes up 50% or more of all activities!
VALUE-ADDED
WORK
WASTE
OTHER
NECESSARY
WORK
IDENTIFYING WASTE

4. MOTION
OVERPRODUCTION
CORRECTION
CONVEYANCE
WAITING
OVERPROCESSING
INVENTORY
HUMAN
MIND
TYPES OF WASTE
These are the eight categories of
waste that are common to any type
of business or organization.
Correction is work that wasn’t done
right the first time (mistakes, errors,
omissions, reprocessing, etc.)
Overproduction is any processing
done at a faster rate than required
to meet customer demand.
Delivering more service than is
required, like a 1-hour turnaround
when next day would satisfy, is an
example of overproduction.
Overprocessing is adding in extra features
that the customer does not care about.
Conveyance refers to the excess
transportation of the product or service as
it flows through the system. This includes
work routing from group email inboxes to
individuals, or phone calls that are
transferred multiple times to get the right
person on the line.
Inventory refers to under or overstocking
of information. This includes work in
processes, email backlogs, tasks in the
agency management system, etc.
Motion refers to movement of people or
equipment that doesn’t directly add value.
This includes access to needed information,
and the proximity of printers, scanners, etc.
Waiting refers to waiting for requirements,
information, instruction, work orders, etc.
This includes applications, underwriting
review, account manager inputs, and
response for additional information.
Human mind refers to underutilized or
misapplied human resources. This
includes the cost of IT workarounds
that are never fixed, poorly maintained
equipment/downtime, and valuable staff
resources processing data instead of
leveraging insurance knowledge to
provide value to their clients.
Lean is a powerful tool for identifying
inefficiency or redundancy. It is a
methodology for driving continuous
productivity improvement.

5. Innovation does
not happen when
everything around
us is great. The best
innovation takes place
when we are forced
to change.
- Lisa Bodell
Founder and CEO, futurethink
WHY LEAN?
WHY NOW?
A LEAN LEAP
MADE IN A CRISIS
We believe this is the time to stand out
from the crowd, crash competition, and
build for the future. This is not the time
for big spending, it is time to cut costs
by re-engineering processes and
redeploying people to do more value
work. Restructure teams for growth.
Focus the organization on what is valued
by customers, delegate necessary work,
and eliminate waste.
Now, more than ever, is the time for
insurance organizations to advance their
Lean transformation towards operations
excellence. Lean protects profit margins
by improving quality and productivity,
strengthens ties with customers by
improving service, and converts
orders-to-cash faster by reducing
lead times. Most importantly, Lean
gives the organization an enduring
competitive advantage.
Taiichi Ohno pushed the Toyota
Production System through the
entire Toyota Motor Company
in 1950 during the great crisis
that left Toyota on the brink of
bankruptcy. It was post WWII,
Japan's resources were limited,
and there was no room for
waste. The Toyota Production
System, a Lean-based
methodology, rescued
Toyota and took the
company to new heights.
Here are a few ways that Lean transformation
can be advanced across an enterprise:
Developing employees as problem solvers
through coaching initiatives
Changing management culture from
command and control to fact-based
and flexible
Transitioning from a tools-based
implementation path to a course that
applies Lean management as a complete
business system
Changing how the organization thinks and
conducts business on a daily basis
“
”

6. do what counts.
RESOURCE PRO
1180 Avenue of the Americas
16th floor
New York, New York 10036
888.577.7552
www.resourcepro.com
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