{608 Manage imovation and Cominuous improvement ‘Task 1 Review programs, systems and processes Provide a written report which should have the following 6 parts: 1 Describe the following systems used by AC bert: 2) Supply chains pg 5 of your assessment pack Append A) ') Operational systems (Pe 5-6) of Append) 6). Produt/serie deliver (oe5:61 2 Analyse the three systems and develop your review stratery. Describe your performance review processes. 2} What are your RAs ») what areyourts €) What ar your performance/sustalnablity measures 4) What are your assessment tols and techniques £6) Desert the performance eview process 1) Gwe asample sere evel of agreement 3. Usa the data provided upto 196, Fer the 3 key systems (supply chain, operational ystems, product deliver) describe how your performance measures/ssessment tots eg, Balanced scorecards, KPIs et. will monitor performance. 2) Give specif examples 1) Write an evaluation of the effectiveness of your strategy 44. Analyse the valance rom orignal pans and targets. Discus performance in relation to 2} Qualty/sesan manufactrng —b)ales profit 4) delivery (supp chain performance) 6] staff tumover/ management performance 5. Discuss trends what trends did AC Glbert fl to Went in the late 39505? 2) iscuss lhe points fom 2 in your assessment procedure (markets share production & manufacturing) 1) Deserbe atleast one mised opportunity deta 6) 1 company did nat ose in 967, what advice would you get from these speci? 2) Internal engineers, production staf enteral ~ marketing consultants, ad experts... You can find extra information on the information sheets that aregiven to you in the class (student activity sheets)BSBMGT608 Manage innovation and j continuous improvement Section 1 - Review Programs, Systems and Processes 'n ode to work etecthely os. manager, you must beable te: 1) gages enema | (State conn 188 supply chains, operational and prod. an se ‘pirat ca oper prodkct ans sence OP gegen nttnnnninan \ @) '@ analyse performance reports and variance trom plons for allkey result areas of the B® ries G)) B went and anes chang wens and opportunities lent tthe cgeneton eek advice from specialists, where appropriate, to Wey new technolagy and ‘tectonic commerce opportunites. A You aaguion Thee & aren a tetoR on AC Gillet thr a “ ote. Shis task 2 is comp" Pleyp wt fed anlgrnabn 0" the chudoat Wworbbotk a cnt The er ae oA, use it ul Gn stonmonitor and evaluate performance en ou monitor penance you ae comparing an organisation's cal eu { aint planned performance. |, Common performance messures are: SRigiS + How long does i take to produce @ unt? i 5+ Howlong does i take to process an order? ‘+ How long does it take to sere a customer? ‘+ How much does i costo produce a uni? * How much does toast process an order? ‘+ How much does it cost to sere each customer? * How many orers were processed cones? * How many units passed quay inspections? i ~_How meny customers were sated with the sence provided? | __ How nyu etn rode peru \ ‘How mony orders have boon processed today? ‘+ How many customers have been served today? Feito 1+ Whats the sles result for that product forthe month? + Whats the soles result fr the department forthe month? pytot is fhe ahlerPm naonatoag Pealpnens I Gud cualnahang th THIS brat |[Su shoud | pu monte pafprosnce? that you ware of how your organisa Itai | ontoring perormence once ty eyoumay nse tots to Binge J nes yout deny ay cororive | potomarcebek owe ome examin of corecive aon nea | change your | 5 implement eontngener Pens * perease or decease resource vee | Shomer \ a incresse bus pe wfmation ou esto neers ede | geod entong ste ones SEE Mrming age Bes 278 nat enanges a racist raertnan ch more prosuaNe es youroganisston wel ygomance on vac AIMS rranege yeu bine wer dng youre reacting 0279 vega oes. This cane Sra enjvable wey ‘Monitoring performanceExample: BRA Toy Warehouse 2) Backgroune infomation ‘A Toy Warebouse sty ditbutor operating In Melbourne forthe ast 15 years. ‘Theirpriary business function detributing tye to etal eves. They empley the flowing people: 25] «soo xwarenouse empoyes who are responsible for packings ere ‘© 80.suppor otice employes who are responsible fr adminktaten, finance, human resources, buying and sales. ‘Strategie pan goss ‘+The organisation's strategie gal Isto become the number one toy estibutor in Vitor within the next thre yrs Operational plan goats + The organisation's department heads have developed the follwing operational plan gosto eupport the achieversent ofthe orgensatonsstatele goals. g § 7 Warehouse | Exceed customer expectations vs improuing productivity by 30% by 31 December 201% resulting in desea tne between custome order and recep of goods. Finance Reduce orgaisstionl ests by 5% by 31 Deserber 208%, to alow forthe most competi price toe offeredto customers. Human To implementa performance management program by 31. resources | December 202Xthat promotes a custmer-centre cut ‘Sale To nerease marketshare through increasing Sle by 40% by 34. December 203% Buying Promote the organisation asthe number ity leibutorin Vitra by reducing ovo stocks by 1% by 31 December 202%. Tony, the Warehouse Manager, knows that to achlove the operational plan gol he has ‘set hei going to have o doveiop and implement sraegs to mente an eveuate warehouse performance. Tonys strategy to monitor and evaluate warehouse performace Is folbws: —————————— Step 1: Dect whet to monitor ss cprtons pegs folnese ny hee ht incr see Je ross rerio monte ond ae PEE! tustomer orders wth regards t: qualty production + cast| step 2: Determine how to measure performance ree Tony iste the areas he woud mntor and evalste, he then ented the ‘mesures he would use to determine performance, Time “ow lng does take to process an ore, rom recep of err to | when the customer receives the product? Cost "How much does it cost to prosess an err? ally [+ What theeror rate? Production | © How many orders are processed per da7? aYeeRNf oo} ‘Step 3: Analyse results ‘er identtyng the performance mesures, Tony eveluste perfomandeby comparing _2ctual performance against the desired target level of porfemance. Thi allowed him to {etermine areas that coud be Improved to assist the warehouse in acheving ts producti go ea Current Performance target to achieve Performance | 10% produettyimprovernent Tine ‘SOrminutes | Reduce the average order a sxingtine processing time tom 80 ae minutes to 72 nutes, Cost $200 Reduce the average cost to on oe process an orge fram $200 te Average cost per top bees order vaity 10% Reduce order erates rom ror rate ee Proauction 50 Increase the average umber een eurber of riers of orders processed per day eee tom 5010 85. processed per day——Analyse systems and processes “Measuring the performance of an organicstionIvohiesanajing the systems ard Processes usd within the erganisaion to produce goods and senics. Completing hs nals alowsto identity areas of improverent. ‘Types of systems and processes ‘There are several types of systems and processes that organisations et produce Pods and series. The most common are: + supply chains = poratona sjtome * producysonice delivery systems, ‘Supply chains Svoply chains represent the procurement, production and ltibutonactites ofan ‘igsisation. Wain a supoly chai, these activites are viewed as Inked and relant on ‘one another to produce the frat eutcome. is believed that ne crsponet ofthe chain fas, the whole chain i broken and preducy/sorvice delivery gos wil not be tehined Beau ean example sno tn for an rganston th pede ends condi an eta rowsonet >| retin |p] ain) son ck Disbtont ‘sae wworehowse and | | Customer Water ee ‘retail outlets. purchases: packaged in bottled soft = plastic bottle annem Lenarruel Lond sort ‘retail outlet for Pusivotes | | rococbeard ices moles toe tate cordert sores Empines T a a a I tat onsunoton eves tenes to proce mre mate to produce moreso drinks for detbuon,Operational systems — ‘Operational systems are use to process en erganisatonsdayoday business transactions. They are typically focused ona epecti business proceso task an wll record the dats used Forexample, # supermarket uses an operationsl system to complete castomer ‘vansectons. The system records the sock and pies aswel 2 procesing transection completed atthe registers The aetem can also provide the manager with information regain sock ves, product pies, numberof customers and soon! Product/service delivery systems [A product/service celvry system i used by an organisation to complete production and senice delivery functions. These systems folow a process that ultimately produces an (end product or sence. For example, Toyota uses the Toyots Production Sytem. This sytem provides 8 process for producing crs that meet the expectations of customers, employee andthe business” Completing an analysis ‘Toctectively review an organisation's systems and processes, detaled analysis must be completed Tere ate many ook availabe to complete his ana, nang: + process mape Vere mytteds " oo wee tte. verges soma to gtagany, ACG WoO + graphs and charts. ‘SWOT analysis. ‘Another too that ean be used o analyse the eectveness of suply chains, operational ‘and product/service devery systems is 8 SWOT anaes. SWOT anabsis helps to identity the cument tats of what you anabsing end cen hight he things you can improve or enhance. The process: 4 State what you ae analysing athe top of he sheet, eg. service devery system, 2, Forthetope being assessed, identity the: a. strengths b. weaknesses 4. opportunities. (State what you are anatsing hee) Weaknesses These are internal actions or events that These are intel elements that may may help or are helping the achievement | hinder er are hingerng the achievement of an idea stustion, for example: of your oa suation fr example: «+ luniningof statin customer service | «speed of sere, watng time 1 sing uptodate equipment “© outofstocks‘Opportunies Threats ‘These ae eternal postive influences that | These are extemal negative lnuences sill or are helping the achievernent af the_| thet may hinder ore hindeing the dea station for example: ‘schleverert of he Meal etuatin, or «lowering rtres rates ‘ame: + svalabiny of new, Improved aw | * {8 oFEngof a compettor mater, 1+ increases in ines ates/cost ot wine + councl regulations negative to your business (example - estcton of parking /eduoes trading hous. ‘sample: BAA Toy Warehouse ‘Aer implementing his sttegy to monitor and eluate performance, Tony also ‘completes the folowing SWOT anasto essa him with is review, Warehouse order processing jstoms and process ‘Srengthe Weaknesses + worencuse Maragoment System | + absenteclm automates acministatve = wareheuse ayut- stock tou ‘cermpanents ofthe process ne hina «simple process for packing and . * werehouse supewsors are tetibuting customer orders Junior end new to management | god orientation and induction roles, and therefore rogue lot rogram for new staf which of eaching and suppor rom ‘ensures new stat are productive Warehouse Manager. uicy. Opportunies Threats ‘© warehouse extension to alow «+ forkit toense eirements Detter layeut means neta sat can dre 3 + preferred supper arrangement to | rt be estan wa temporary + ona noence eqirements mean workore super to ereure staf will hae to take te away Provision ofemporay labour. ‘om packing fort attend traning + industri action from union members de to loko eensed fork avers. |Graphs and charts Graphs and chars are an excellent way to display data, making easy See what is cozung within the stem o process you are anasing. ‘There are several ways to graph and char information incung es Dearth nent = rample: BAA Toy Warehouse Tony used the following Pareto chart to analysis customer complaints received by the warehouse. Customer complaints un charts ‘Run chars are used to dopict rend in rocestes euch as productiy.tine, ener ete Tey are an excelent oo for gauging how things vary overtime, Le have they geen worse, stayed the seme, orimproved? ‘Tomake run cha, plot whet you are measuring as points on the graph, end then coneet the points. Make sure thatyou plot measurements inthe orcethat they were established, since you ae racking them overtime. Example: BAA Toy Werehouse Tony complete ne following run chart when analysing the ik ates (numberof cartons packed per hour) forthe warehouse packers. ‘Average pick rato per employee Pik te ro SaBRERES1 Bcamle: BBA Toy Warehouse YW Teach ony ron rte eusone | Toreaice ert cater cnps avo son moos csr eros by Sok yt | December 202 2% [Sse Key Performance Indicators (KPIs) and targets ‘Ake petomanoe nator nub, pace of atl, for xmas ome important measure of performance mae diet reste to spect argets that veto be active fr seh WEA Tages tr ett be acteved,n what tie frame, and ae then uses to neesure acu performance. For example on oraisation’s bjctve coud be to ensure customer staron The rected tage oud be that al cals ae answered within 20 secon The seemance near cos be te everge tie talent arver ac (nese) hoe targets may be coaches or paced on @ pest them n achieving etree. Pecsle | Tove | dice abeertoon by Sk by individual who doesnot meet t pecoxmance Improverentplen 10 tach KRA shoul ave onto to ee HPs an shoud be focused ov meBRHng he rostral spect ofthe KPA, cally applied at ol/ndvdual level but an ato be used of en organisation or department. The pence for setng romaine te seme, respective ofthe level ofthe iePiand targets general cove the folowing: sand targets ae measure the performance targets and measuring performance ‘organisation at whch they ae epsample: BAA Toy Warehouse Theoden se Arce nd elt aoe or pce orate how nals pn woolen achievement of the organisation's overall goals and objectives, . Tobecome the #toy sisrererin Vitra -Impreve warehouse rout by 40% by 34 Deemer 203 tree pacing am roduc by 10% ty 33 Deceer 200% Ache daly pk ‘ate of 290 canons Achieve ty ener ate otis than 2, PACKING TEAM MEMBER TARGET els important when wrtng targets thatthe are SMART ander expan what is ‘expect. ‘SMART goes end targets follow the format below. you ae ienting the tasks tobe doe and the tne it wil ake to Ss ‘Goals should be clear ane specific, When writing > ensuring te nat of ata en thes ore era or rerio role to deregnrd ‘Othe vality fhe rests onan ongoing bes For hs reaso is real that the measures, oe a ecnigues ved 1 colecand naive perfomanoe dea are ‘alates ons rgular bio ereure accuracy en inept of fran. ‘ample: BAA Ty Werehouse 2, [ernie onnenertte amano mine tanita wantin coors eeonaton ‘S| memes to record the KR, targets and KPl foreach role. He dd thst ensure ‘recurs evo tt tones 22 | paneer nd enone comp br pte ws 3 4 “y ‘Tony contacted the Human Resource Manager to obtain a report detain the KRAS, vu S XS at ‘argts,KPi ad performance ratings for all warehouse employees. He wants 10 ‘evaluate te effectiveness ofthe performance review process massing the g_ | wereousetoscieve ts eperstons| an goa. Upon reviewing the report provided by Human Resources, Tony fund ‘hat only 80% of employes have documented KRAs and KPls snd therefore 20% of empoyees donot know what pecormance levels expected them S| = targets are not aigned wih warchouse goals and ave theretorenot esi, ‘employees on what the warehouse ie tying o achieve 1+ the majorty of targets are nt writen using th SMART format end therefore not providing employees wth clear expectations wih regards to what nee to be achieved and ty when + performance ratings indeate that 50% of employes exceeded serfommance ‘expectations forthe lst performance year, which is inconsiste: wth the warehouse end of yar ruts (the warehouse aid not achieve Rs cperatonal plan gots lst performance yes. ‘This evaluation has highlighted to Tory that he must work wi his management team ‘tc imorove the way in which performance measures and assessment tos are used—— Performance reports Oyiawse An L ‘Organisatens report onthe perfomance of varity of ateas wth ter usiness,nclusng: : 1+ budget/oost variance + cualty «+ customer sonics + production . + financial ‘+ human resources ‘+ cocupationalnesth and safety (OHS) + other operating paremeters. These reports provide veluable Information onaress within the business that are performing well against expectation, and those that require some focus ana improvement ‘Analysing performance reports . Ly) © Peremanc repens re ved not nyt repr on patmance bt todo at cen be aahse to measure perormance with respect to WAs. gee performance ‘port wl seca assess each of he ete key ek arse oloingtor acy rmontoringe perfomance Using pertorance reports to monitor RAS noes thee snp steps = se any varonaes againtwerget) Forex, age 10 i ne ata esti 32 units, 2. (inte the verano determine he cau: “ar” the variation e one-off For eramibe 1 delivery times were missed due toa ‘ackout nd thereore computer systems cou at ese ocr. Has he variance been bulging overtime ond therefore needs further investigation? Fr aml, aes have been decreasing by 7% each month forthe ass months . [sthere an exlanation forthe vation? For example Isle are down or Jansry because he shop was cased or we weeks er hea, 3. Toke coroctive action whore requed: {Remember not al variances require corectve stn, such athe example ove where ssles were down duet the shop being sed for holidays ‘the shop closure was# planned event and management expected sales to be own then no corecive action f required; BEA Toy Warehouse : Warehouse Human Resources Monthly Perfomance Report Report Name: Human Resources Monthy Report Department: Worehouse Period: 202K Yearto Date B tCffreronnnee FTA) [vee Toe Frage vented ier =p | recent slay oe ore i Employee attended ining sessions 6 $20millon | $1.8 milion $25 millon | $12 milion < 25% 83% 32 Comments -Abseteelsm is tracking above target. Further analsis must be comp ted tod ‘he root cause of his issue. Turnoverhas steed increased over the last three months after being constant for fve month prior to that. Further analyes o be complete. Long service leave and annus! eae laity are curently telow age, however work wil nee to catinue in tis area to ensure the target is achieves as erpojeos conte to acorue leave. Employee engagement tracking well aginst target Upcoming engagement actives may help to improve score. ‘The numberof employees to have atended a trinng session fs curently wot below target. General Manager wil address tis the next senior management team meeting. ‘This report hghlignts to Tony that in order to Improve warehouse prot, corectve action must be teken to address abeenteelsm and turnover Tony acknowledges tet other KRs are also curentynot on tack, but he Henties absenteeism and turover asthe greatest contributors tothe impact n productivity levis.S Cyaert? 4 brands \darfityirg Identify trends ‘Trends provide useful information when completing reviews ef an orarisstion's programe, ejstems and processes. Trends hep organisatlon to undetand and interpret theirpast experiences, ann gong so help to predic future betaviout, Crgaritational trends are pattems that canbe seen as rest of enasls end reporting. Graphs are an excelent tool or entivng ends as they rovde a ual atte for ahi. (Organisations snaiee tends for many areas of thelr busines, nung + sales + inane + customers + production and manufacturing «+ employees cotton Having the ably to recognise and analyse organisational tends is essential when conducting reviews to denty improvement, Below ae some detaled examples ct cogerisational ends, Sales trends Seles tends include: «+ Sales pattems ovr 8 period time, suchas year. For erate, department stores sales icreace at Chrismas and reduce rapaly after Cismas. + Sele trends from one year to another, such 2s, comparing annual sales resus ‘tom one to anther in order to understand organistral sales gowh over tne, + Spectne product ends, For example, «grocer store experiences higher sft rink ‘sales in summer menthe than in winter, but sels more sup in winter than summer. Analyse the sales tends nthe graph below. “Annual Sales TrenasSeek advice from specialists ‘Specialists are people inside and outside the organisation who ave exper in their chosen fll and can provide detalled information ona range of sues. Fer exemple the use of technology to assist organisations in reviewing programs, systems an processes. Some ‘ypes of specials in these feds an include the flowing 1+ Process engineering specialists can provide information regarding ele systems ‘end proceses. This neudes: © prooess mapping © process desien © process imeroverent. «+ Information technology experts specie In technology to uppertan organisations ‘systems and processes. Examples of such technology include: © warebouse management systems © customer relationship menagement systems © retell management systems © financial management ystems. ‘Seeking specialist advice COtainng externa peciaist advice can be expensive, expecially fr orgniatons wishing {develop and impement a custommede system, Organisations should svaye ensure that befor seeking external advice they have completed a thorough of review af thelr. Programs, systems and processes and havea good underetandingfthearea in which ‘they want advice. For organisations that are heal relort on processes and sites, sich 68 manufacturing end production, my be worthwhile employng a spelt 2s 2 ‘emanent member ofthe tear, This wil allow fe continued foes on process eilency and improvement. The benefits of external advice ‘There ore many benefs to seeking external ache which sy a at of organisations rely conentera advice when completing reviews oftheir systems and proces, Benetts incude 1 clean lene for completing review; unbased «= teshideas + good knowedge of inusty best practice «+ broad enge of experience rom working wth ether ergnisatone «often have he abit o suggest a range of options.