BSBMGT608 Manage innovation and continuous improvement

Assessment 1: Review programs, systems and processes

You must provide/submit ONE Report (5 – 7 pages)
´ Your report must include:

´ Key Systems and processes used by A.C Gilbert

´ Review strategy for the three processes

´ Monitoring performance

´ Analyse the variance

´ Trends relevant to the organization

´ Advise from specialists

Suggested report format

1. Introduction
 Briefly introduce the assignment details.
 Explain the purpose of this task
 Provide a brief overview/background of A.C. Gilbert
2. Key systems and process used by A.C. Gilbert (refer to student work book pages 17 and 18 and the
diagram on page 15 and 16 of the appendix).Briefly explain what you mean by the following and how
they are followed in A.C. Gilbert
1. Supply Chain
 Supply chains represent the procurement, production and distribution activities of an organisation.
 Within a supply chain, these activities are viewed as linked and reliant on one another to produce the
final outcome.
 C. Gilbert supply chain includes – acquisition of raw material, systems and process and sales delivery
 Operational system
 Use the diagram on page 16 of the appendix and explain
 Product and service delivery
 Use the diagram on page 15 of the appendix
3. Analysis of the key systems and review strategy (Page 21 – 36)
3a. KRAs and KPIs (provide a minimum of three KPIs for each KRAs from the case study)

Assessment tools and Performance and

KPIs (examples provided techniques (Which one of sustainability
KRAs below)from case study the following tools and measures (how will you
(from case (Actions taken by Jack techniques would you use?) measure and sustain the
study) Wrather pg 6 in Case study) page 30 performance?) page 12 – 13

· balanced scorecards
· key performance
· quality standards – indicators (KPIs)
maintain current quality · performance reviews
standards and exceed market · Service level · customer complaints,
Customers expectations agreements reduced defects

KPIs (examples provided
KRAs below)from case study
(from case (Actions taken by Jack
study) Wrather pg 6 in Case study)
Assessment tools and
techniques (Which one of
the following tools and
techniques would you use?)
page 30
Performance and
sustainability
measures (how will you
measure and sustain the
performance?) page 12 – 13

· sales budgets – achieve

increase on previous year
sales/$20 million by 1963
· cost control, increase
Financials · in revenue

· staff retention – retrain

engineers/production staff to
meet new production
requirements due to increase
in range · employee engagement,
professional development,
People · etc.

· production times – meet

key retail sales periods.
· Productivity,
Processes · decreased downtime,

3b. Performance review process of the three systems (page 21)

Explain, in detail with relevant information from the case study using diagrams, tables, flow charts, any one of
the processes you will use to review the performance of the three systems. E.g.
 process maps
 Completing an analysis of each step of the process allows for the identification of improvements
and process efficiencies. This involves identifying the start and end points of the process, and
mapping all steps in between those two points.
 SWOT analysis
 benchmarking
 check sheets
 graphs and charts.
3b Example of using a Balanced scorecard for reviewing AC Gilbert Performance between 1961-1967
KRAs Targets Steps taken to achieve them
(from case (Actions taken by Jack (Use Key Milestones on
study) Wrather pg 6 in Case study page 7 in the case study) Actual outcomes

· quality standards –
maintain current quality
standards and exceed market
expectations
Customers · ·

· sales budgets – achieve

Financials increase on previous year · ·
 KRAs Targets Steps taken to achieve them
(from case (Actions taken by Jack (Use Key Milestones on
study) Wrather pg 6 in Case study page 7 in the case study) Actual outcomes

sales/$20 million by 1963

· staff retention – retrain

engineers/production staff to
meet new production
requirements due to increase
in range
· In 1962 increased · In 1964 fired most of
People sales staff by 50% the top management

· production times – meet

key retail sales periods.

Processes · ·

3c A sample service level agreement (provide a sample service level agreement – student handbook page –
37)
 For example, a delivery organisation may have SLAs in place to advise customers that they can expect all
deliveries to be made within 24 hours of order.
4. Effectiveness and Improvements. (Using the data provided for results up to 1966, for each of the three
key systems) – Analyse the table above and write your reflections in 3-5 paragraphs
1. Describe how each of your measures, assessment tools and techniques would monitor
performance. Include specific examples or hypothetical cases to test the effectiveness of the elements
of your review strategy.
2. Write an evaluation of the effectiveness of your review strategy
3. Suggest improvements to your strategy
5. Analyse the variances from plans and targets for the key result areas (KRAs) Using the data
provided for results up to 1966, include discussion on performance with regards to: You can use
graphs/charts as well.

Performance areas Planned Achieved (actuals) Reasons for

a. quality – design/manufacturing

b. sales

c. profit

d. supply chain performance

(delivery)

e. business growth – staff and

management performance and/or
 turnover.

6. Analyse trends relevant to the organization. (What trends did A. C. Gilbert fail to identify in the late
1950s? Consider the strengths and weaknesses of the A. C. Gilbert Company prior to 1960. Analyse the
following in your report)
Sugge
improvemen
you recomme
Areas Strengths Weaknesses Missed opportunities should hav

· specialised
products – limited
range
· experienced · focus on past
personnel successes, not future
· established growth
quality products and · poor management
standards – crisis management
· small but · lack of training
profitable and planning prior to
· good reputation introducing large-scale · recognis
a. market share in the marketplace change · changing trends demands and t

b. reputation

c. stability

d. profit

e. sales

f. ability to adapt to
change

g. customer service
standards

h. innovation

i. employee
performance

j. production and
manufacturing

7. Advice from specialists (Imagine the company did not close in 1967 and has somehow managed to
continue operations until today. Discuss the possible use of advice from specialists. What specialists
could be consulted to advise on and identify new technology or electronic commerce opportunities) Page
49
 Sources What type of advice?

a. Internal – engineers, production staff,

manufacturing staff, sales personnel, human
resources personnel

b. External – marketing consultants, advertising

experts, engineers or designers, IT consultants. e.g. Social media marketing

8. Conclusion
Provide a brief summary of the report and what next from here
BSBMGT608 Manage innovation and Continuous improvement
Task 2 Develop options for continuous improvement
You must submit 4 pieces of evidence
1. One-page+ performance improvement strategy

2. 20–30 minute team briefing and consultation session (We will do the group discussion on 2nd and 3rdweeks

This role play is absolutely mandatory and you can present to a small group, once you are ready with your strategy. All t
of your group who observe you will comment and sign in the document and I will co-sign with my own comments
3. Written risk analysis

4. Written cost-benefit analysis

1. Prepare a one page+ performance improvement strategy. The following elements should be there:
2. What are your strategic goals?
3. How are you going to change the current process in 2017? List your ideas
4. c) Explain how these will improve the performance and the company will look competitive.
5. d) For each new option/idea
6. Develop a risk analysis
7. Develop a cost benefit analysis ( sample templates and examples are attached)
8. Get approval from the group and the Assessor
(e.g of new ideas – Digital means of advertising – Google ads / personalized advertising
on social media- new toys based on movie themes — large super market sales and not
small retailers and so on….)
1. e) What are your new KRAs, KPIs, targets….
2. Briefing and consultation session.
3. Once you are ready with your strategy, you can present to the group. All the members of your group who
observe you will comment and sign in the document and I will co-sign with my own comments
4. Ask the group to go over the pros & cons and incorporate changes to the strategy.
Detailed Template
1. Performance improvement strategy:
2. a) Strategic goals (Task1 Appendix 1…use the actions taken by Jack Wrather and come up with other
SMART goals — e.g. To become a market leader in educational toys/ To increase profits…. )
3. b) New performance improvement strategies in 2017 (Student WB pg. 57) &
4. c) How your performance will improve competitiveness
(Process re-engineering/ New technology/ Training employees/ New product range / New advertisement
models etc…)
(List at least 2 strategies for each Key Result Area… you can list more if you like)
 How will this improve competiti

Area of focus New performance strategy

Processes (using new

technology in design,
Production, packaging,
distribution and marketing –
new changes)

Financial (Sales & Profit)

People (training, change

management)

Customers (market
research…feedback..)

2. For each of the ideas you have proposed do a risk and analysis and a cost-benefit analysis.
Use this standard Risk matrix

2a Risk analysis
Impact
(Extreme/ Likelihood
High/medium/low) (Very likely, likely,
possible, unlikely,
HU)
New performance strategy Mitigation strategi

– Training in new proc

completed before
– Supervisors to be
e.g. New process – delays in employees warehouse floor monitoring f
understanding Medium impact Medium likelihood weeks

2b Cost Benefit analysis for each performance improvement option

Feasible (
feasible
New performance Cost Risk Benefit feasib

e.g. Process · New machinery – · Down time with · Increased

improvement $20,000 the new machinery productivity
 · Training – $5,000 · Lack of employee · Quality
training leading to
defective products

3 My new KRAs, KPIs, Targets

KRAs KPIs Targets Initiativ
Which are would you like to How will you measure the What is the target usually a Steps to improve
improve improvement? numerical figure) target it?

Processes
Average day taken to produce a Reduce the wait ti
scientific toy 2 days the proce

Financials

People

Customers

Part 2: Briefing and consultation session: (10 -15 minutes for each person) What should you present to
the group?
 How the innovation will improve organization performance
 How the innovation links to the organisation’s strategic and operational goals
 Details of risk assessments
 Details of completed cost-benefit-analysis (CBA)
 Details of how the innovation will be implemented
Take notes of what other members say and revise your original Innovation plan if necessary.
Assessment Task 3 – Unit Project (UP) – Implement innovative processes
Assessment Task Instructions
You must provide:
 action plans for transition, communication
 two contingency plans related to transition and communication action plans
 a written analysis of the causes of implementation failure
 amended action plans and contingency plans
 evaluation and continuous improvement schedule.
Assessment task Procedures
1. Turn to the case study ‘Implement an innovative process’ (Appendix 1 provide at the end of this task).
2. Review ‘Part 1 – Implementation’. Examine all aspects of the new process to be implemented.
3. Develop action plans for 1) transition, and 2) communication. In each action plan, include:
1. activities, objectives, measures (KPIs), timeframes
2. activities to promote the process and sustainability
 3. activities to communicate costs and benefits to relevant people
4. activities to reduce any negative impact on people.
4. Develop at least two contingency plans related to possible implementation issues you foresee in relation
to activities in your action plans.
5. Review ‘Part 2 – Follow up’. Examine implementation issues and failures.
6. Critically analyse the causes of these implementation failures and draft a report describing how the
contingency plans will address them.
7. Amend action plans and contingency plans to address the implementation failures.
8. Develop a schedule for evaluation and continuous improvement. Include regularly scheduled:
1. evaluation activities, regularly repeated over a suitable timeframe
2. evaluation activities to capture learnings from all work activities
3. activities to embed learning into work processes.
9. Submit documents to your assessor as per the specifications above. Ensure you keep a copy of all work
submitted for your records.
10. Assessment 3 – Appendix 1: Implement an innovative process
Part 1 – Implementation
John Jones, a Production Manager at A. C. Gilbert, has developed an idea for improving
efficiencies in the manufacturing process at A. C. Gilbert. The idea came as a result of
the innovative ideas program, and John has successfully trialled the program on one
line in the processing plant.

The program has been evaluated and found to be successful, and you are now in the
process of implementing the program company-wide.

Overview of the program

The goal of the program is to increase productivity, reduce waste, improve
sustainability, and reduce errors on production lines by 20% by allocating specialist
team members to individual lines.

A secondary goal is to reduce staff turnover from an average of 32% per annum to
20% per annum, thus improving the skill levels and efficiencies of the plant and
reducing costs in recruiting and training new staff.

Production staff and process workers will be divided into five different teams. Each
team will be responsible for the manufacturing of five product lines. Team members will
only work on their specialty line, and rosters will be altered to ensure adequate staff on
each line during the 12-hour production cycle. This may involve changes to staff
rosters, in some cases by implementing 12-hour shifts, but will not impact on earnings
or result in the loss of any hours of work.

John also suggested involving teams in goal setting and objective setting for their own
product lines. Each month they meet to develop production and error rate projections
for the next, with a goal to continuously improve both rates to achieve a maximum of
4% error rate and a 40% increase in productivity within 24 months. Current error rates
are at 22%.

To incorporate this change, production lines will be closed for 48 hours for retooling.
During this period, staff will be re-trained in the production of their designated lines by
shift supervisors. Training required will include technical training, motivational training
and quality control procedures along with goal and objective setting workshops.
Costs
It is projected that the costs incurred for the change will be:

Development costs

● Initial trial $150,000

Implementation costs

● Retooling the production line $1.2 million

● Training $20,000

● Loss of productivity $50,000

Ongoing costs

● Initial errors and reduced productivity $150,000

Anticipated savings
By implementing the above measures the following savings have been budgeted:
 savings of $300,000 per annum in staff turnover costs
 savings of $1 million per annum in lost productivity and errors
 savings of $200,000 per annum in service and repairs costs to equipment.
Benefits and concerns
During the trial, a number of advantages and concerns were identified. There were
initial fears that staff would become bored and complacent, continually producing the
same lines. Analysis during the pilot found that, after the first week, staff became quite
’proud‘ of their output and felt a degree of ownership for the lines they were responsible
for. Morale improved in a team environment.

Employees were initially reluctant to participate in setting their own error and
productivity targets. They tended to overestimate the percentages and did not wish to
commit to large improvements. Managers feel it will take some time and training in
understanding the financials and operational reports for them to set realistic targets.

Many employees lack formal education and some have limited English, which was also
an area of concern when trying to involve them in what they perceived to be
‘management decisions’. This style of management is a huge change in the workplace.
Most employees were used to being lectured for making mistakes, rather than
encouraged to participate in decision-making and feeling like they have some ownership
of the process and outcomes. There is some reluctance and anxiety involved and a
degree of resistance from some long-term employees, who feel they are being asked to
do a management job and should be paid accordingly. Management fear there could be
some industrial relations implications.

Other concerns revolve around productivity levels during the transition. It is understood
that it will take some time for employees to operate at full productivity, as they will be
working on new production lines and different products. Concerns that deliveries won’t
be met and customers will be disadvantaged are key concerns for management.

From a technology standpoint, the new production lines will be faster and more
efficient. However, the current service technicians are used to the old lines and lack the
experience to service and maintain the new equipment. It is possible that breakdowns
could impact on production targets.
Part 2 – Follow-up
Make the following assumptions:
 The new program has been in place for eight weeks with the following outcomes:
 productivity has decreased by 8% to 66%
 delays on the line have increased by 10%
 waste has increased by 10%
 error rates have fallen by 2% to 20%
 15 out of 300 staff have resigned since the new program was introduced, including two shift
supervisors.
 After 16 weeks:
 productivity remains at 66%
 delays on the lines have improved and are now at pre-change levels
 error rates have remained steady at 20%
 staff levels have remained steady.
 The following comments were raised at a staff forum held two months after the implementation.
 New machines are very different; training was not sufficient.
 Employees feel that figures don’t mean much to them – they are struggling to understand what %
rates have to do with their day-to-day workload.
 Employees understand the importance of sustainability, but have no idea how to apply sustainable
practices to workplace or amend own work practices to make them more sustainable.
 New rosters have been unpopular with some employees.
 12-hour shifts were introduced to keep teams together but they are causing difficulties for staff with
regards to managing their families.
 Longer shifts are also resulting in people becoming tired and making errors.
 The OHS representative is concerned that injuries might increase as a result.