BSBMGT608 Manage Innovation and Continuous Improvement

(b) List the steps involved in conducting a cost-benefit analysis.

(c) What methods and strategies would you use to do a successful cost-benefit analysis of a proposed innovation in a business? List three (3)

Question 2.

(a) What are the advantages of having an environment at work that encourages creativity and innovation? List three (3).

(b) What activities could you use in a business to implement this? List at least six (6)

Question 3.

Anna thought of an idea to introduce staggered starting times at work, in order to accommodate people who had to travel long distances to work, or drop off children. She also thought it would advantage people who liked to start the day early. She raised the idea at the weekly staff meeting and immediately people objected saying it would be difficult to communicate with each other if not everyone was there at the same time.

What might have been some of the reasons for the negative reaction? List six (6) reasons.

Question 4.

There are various quality management and continuous improvement theories. One popular one is Total Quality Management (TQM). Use the internet and research what is involved in TQM and what are the advantages of it. (Approximately 200 words) List your sources.

Question 5.

A definition of ‘Organizational learning’ is the process of creating, retaining, and transferring knowledge within an organization. An organization improves over time as it gains experience. From this experience, it is able to create knowledge. This knowledge is broad, covering any topic that could better an organization. https://en.wikipedia.org/wiki/Organizational_learning

(a) Describe the benefits of organisational learning (50 words)

(b) Research on the internet and for each of the following organisational learning principles, provide a brief explanation. Refer to http://www.thechangeforum.com/Learning_Disciplines.htm

(c) Describe three (3) practical things a business can do to develop a learning organisation.

Question 6.

Why is it important to conduct risk management when introducing new ideas and concepts? (50 words)

Question 7.

What may happen if a company fails to undertake a proper, structured risk management prior to introducing a new product or service? Give three (3) possible outcomes.

Question 8.

Give four (4) reasons why companies should monitor sustainability.

Question 9.

What is an Environmental Management System?

Question 10.

You work in a fast food outlet. For each of the stages in the Waste Management Hierarchy, give examples of what you can do to reduce waste.

Question 11.

What specialists could be consulted to advise on and identify new information technology? List at least three (3)

Question 12.

(a) Why is it important to accept failure of an idea during trialing and recognise, celebrate and embed success into systems. Give two (2) reasons for each.

(b) What are at least three (3) ideas for celebrating success of an idea or innovation?

Assessment 2: Project

Overview

For this assessment you are to demonstrate that you have the skills and knowledge to:

• review programs, systems and processes
• develop options for continuous improvement
• implement innovative processes

This assessment consists of a project in which you will undertake tasks to develop an environment in which continuous improvement, innovation and learning are promoted and rewarded.

The project requires you to undertake activities based on a case study scenario of a toy manufacturer called A.C Gilbert. The scenarios for each part are in the Appendices.

Note: this case study is based on a real company. You can research further information on the internet if you are interested. The company closed down in 1967, however for the purpose of this assessment, you will assume that it is still operating and that you employed in the role of manager at A.C Gilbert as it is operating today.

For one activity in this project, you are required to brief a management team. You will do this with groups of other students. Your assessor will organise suitable groups and will advise you when this is to take place.

Where you are required to seek approval for some activities, you will obtain this from your assessor who will act in the role of General Manager at A.C Gilbert.

There are three parts to this assessment. You must complete them all.

Part A: Review programs, systems and processes

For this part of the assessment you will need to review, evaluate and analyse programs, systems and processes. You are required to write a report in which you outline a performance and sustainability review strategy, evaluate the strategy, analyse performance reports and trends, and describe options for seeking advice from specialists to identify technological solutions

Instructions

1. Read the case study ‘A. C. Gilbert’ in the Case Assignment Scenario for Part A.
2. Analyse the information provided and prepare a report under each of the headings below. (3 – 4 pages).

(a) Describe the key systems and processes used by A. C. Gilbert.  Include:

1. Internal – engineers, production staff, manufacturing staff, sales personnel, human resources personnel
2. External – marketing consultants, advertising experts, engineers or designers, I.T consultants.

(b) Analyse the two key systems and processes in “a” above, and develop a review strategy.

Develop performance and sustainability measures, assessment tools and techniques that you would use to evaluate the effectiveness of the two key systems and processes.

In your report, include:

• Lists of key result areas (KRAs)
• Lists of key performance indicators (KPIs)
• A description of financial performance review processes
• A sample service level agreement.

(c) For each of the two key systems in “a” above – and using the data provided for Results up to 1966 in the case study scenario:

• 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.
• Write an evaluation of the effectiveness of your review strategy.
• Suggest improvements to your strategy.

Refer to quality management and continuous improvement theory.

(d) Analyse the variances from plans and targets for the key result areas (KRAs) – use the data provided for Results up to 1966 in the case study scenario

In your report on performance include:

• Quality – design/manufacturing
• Sales
• Profit
• Product/Service Performance (delivery)
• Business growth – staff and management performance and/or turnover.

(e) Discuss trends relevant to the organisation. 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.

In your report include the following headings:

• Market share
• Reputation
• Stability
• Profit
• Sales
• Ability to adapt to change
• Customer service standards
• Innovation
• Employee performance
• Production and manufacturing.

(f) Identify missed opportunities to improve business performance. Describe at least one missed opportunity in detail.

(g) Include an action plan for implementing the improvement in your report.

(h) 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 direct marketing opportunities?

Consider:

1. Internal – engineers, production staff, manufacturing staff, sales personnel, human resources personnel
2. External – marketing consultants, advertising experts, engineers or designers, I.T consultants.
3. Submit your report to your assessor. Ensure you keep a copy of all work submitted for your records.

Report

Key systems and processes used by A.C. Gilbert:

Mysto AC Gilbert created in 1950 an agreement that indeed is one of the most influential organisations in the United States today. This association was considered as one of the most notable toy community for the 50th decade. This community is today worldwide known by delivering and high-quality product toys. In that regards, there was necessary to adopt supply change management to organise actions, and this coordination links the stream and change of items from the unrefined materials stage to the end-customer. Additionally, it dealt with knowledge streams, upgrading store system organisations, achieving a sensible high ground.

Arrangements bunch

The work of offers meeting was to take interest from customers. It was just their responsibility.

Scattering 

By using contract transportation aiming to control the things that had been passed on to customers and retailers.

Retailers 

Retailers were offered the organisation's things direct to customers after scattering technique. Immediate orders from customers were taken.

Operational system 

Masterminding 

There are different divisions in the organisation, which makes an understanding of the thoughts into diagrams and chooses resource obligations, including rough corporealities. Coordinating the processes widens bargains and helps to get prepared for each following stage.

Acquiring 

By using information collected from the last stage, the Company used to buy coarse material for collecting and packaging material from the supplier.

Creating 

After completing the two previous stages, accumulating and packaging of toys and different things was done.

Movement 

Exactly when things get the chance to be regulated to use then, inclination method had been done throughout understanding transport to customer and retailers.

Thing/advantage movement

A.C. Gilbert offered three sorts of dashing sets

• The "AUTO-RAMA" race and town roadway structures, delivered utilizing 1961 to 19
• The Slotless American Flyer Stock Car Set, made in 1960.
• The James Bond 007 Panel Set, released in 1966.
• Analyses the three key structures and structures and develop the segments of your study strategy: applying your understanding into quality organization and steady change speculation, make execution and supportability measures, evaluation mechanical assemblies and methods that you would use to survey the sufficiency of the three key systems and strategies.

The critical systems and methods of AC Gilbert will centre on the quality organization and constant change theory; make performance and supportability measures, evaluation contraptions and procedures so on. As an issue of first importance, the quality organization and perpetual development theory of critical systems and methods of AC Gilbert are about ensuring the fundamental structures and strategies would be fiscally attainable and prepared to continue working with the whole deal. Furthermore, make shooting and supportability measures, and estimates gadgets and frameworks are going to join the key result extents, key execution pointers, execution review maneuverings and organization level assertion. Along these lines, the key result will focus on customers, financials, personalities and systems and the key execution pointers will deal with, for instance, cost, quality, sum, time and security. Furthermore, the depiction of execution overview methods will centre at timing, the technique and crucifixion assessments.

For tests, AC Gilbert should evaluate their achievement three months for once by easy-going and dressy summary, for instance, record data reports. By then, the program of study could be KPIs and targets recognized and moved on to the agent, performance period, head and professional review the delegate's performance against spotlights on, the execution charge examination (formal/easy-going) and boss names performance rating.

Incidentally, the execution assessments scale could be gathered by brilliant, intense, compelling, needs headway and unacceptable. As needs are, AC Gilbert could develop the change on which parts need change or offensive. On another hand, the execution measures and assessments contraptions will cover rules, for instance, KPIs are outlined clearly to concentrates on, the information conveyed is exact, the instruments and frameworks used to give critical notice, the gadgets and techniques are sensible and direct, report is viably manifest and knowledge can be made in an ideal way.

Some of the tools that are used to establish relationship of constant change:

• Determine the level in which they are meeting customer desires.
• Measure how well they are meeting the arrangement determinations and things planed.

4. Using the data provided for results up to 1966, analyse the variances from plans and targets for the key results areas (KRAs).

• Quality– the nature of toys was top in the USA. It was a direct result of the creation of the Erector Set. With the help of this association, it got a high status for making quality toys. In 1962 in spite of refined change airing and cooling, Gilbert became the way to make toys and spent a lot of money to make them even more enjoyable. Nevertheless, in 1963 it reduced in light of the idea that the arranged was deficiently yet in 1964 decay the expense of focus lines, for example, the erector set went from $70 to $20, and the quality is like way influenced cardboard box as opposed to metal boxes. 
• The salesbetween 1960-1970 with the extensive social change had a central impact in the toys industry. Young men and young women used not want to past progress even though it was a new time, so everything needed to change. Young men were moving a long way from the conventional trains sets towards encouraging new opening auto hustling sets and action patterns from acknowledged films and system appears. Before the advertisements had been terminated by method for storehouse yet in the sixties obtained new ponder T.V. publicizing ended up being continuously hard offered with toys seriously progressed. Subsequently in Christmas time youths needs the latest and most prominent gadgets and they saw by T.V. besides, put Weight on their watchmen they need to buy it, and people did it. They lurked through $1 million on essential change for squeezing and make more attractive. 
• Exactly when the toy business changed then the number of events was coming good and share regards the association get the chance to be pleasing to an intelligent agent, jack Wrather. He was a TV creator. He spent a package of money to change for the toy business. He similarly acquires new staff that has found out about the present. 
• In 1962-Set a various surfaced goal to finish offers of $20 million for 1963. 
• In 1963-arrangements and refinement went down. Since the quality was exceedingly weak and the cost was high. It was not related cuss
• 1961 (figures approximate)

This drop in sales was also reflected in a fall in the share price of the company.

It's the Performance report when the action taken by jack wrather

5. Discuss trends relevant to the organization. What trends did AC Gilbert fail to identify in the late 1950s?

Consider the qualities and deficiencies of the AC Gilbert Company before 1960. Look at the going with in your report:

Pertinent examples that association fail to recognize

• Lack of quality.
• Staff are not appropriately prepared and skilled
• Quality of toy things have declined as needs be
• The association failed in taking off changes related with customer solicitation.

The rule reason association couldn't get new advancement speedily with customer demand. For test in 1960 there was an huge society changeed. Besides, customer’s hobby was something new yet the association couldn't fulfil their advantage the event. Thusly, the association was losing their customers.

Characteristics of the AC Gilbert association

1. It was one of the greatest and most prepared toy associations on the planet.
2. Crucial acquisitions like that of Mechano and Aerican Flyer to go into the helper toys and toy trains market
3. Strong brand name of "Erector Set" which was later used by the Gabriel Company. The association continued publicizing it as a "The improvement toy from A. C. Gilbert"
4. Strong brand name and had extraordinary availability.
5. Reputation was high of this association.
6. Deficiency 1. Poor organization incited nonappearance of execution
7. Nonattendance of focused activity as it was a family-run business
8. Some of its manufactured lab toys are purportedly joined into an once-over of the most wildly dishonest vintage toys.

The key structures of AC Gilbert is incredible however lacking by SWOT examination, for instance, the operational systems are quality in light of the fact that it was suitable and organized yet creation system will be the deficiency in view of uncompleted parts and the open entryways and perils will both considering AC Gilbert's decision to upgrade store system or not.

6. Imagine the association did not close in 1967 and has by some methods made sense of how to continue with operations until today. Analyze the possible use of appeal from experts. What specialists could be advised to admonish on and perceive new development or electronic exchange opportunities?

Internal variables

• A reward system will be set up to move delegates to work harder and battle with one another to get the title of "Specialist of the Month".
• An engineer should be acquired or arranged into the affiliation, which will be responsible for checking and evaluating the way of the materials that come into the affiliation while another expert has the task of reviewing and surveying the way of the finished thing.
• Review the association handle at customary interims, passing on studies and overviews to each and every current specialist, getting their feedback with reference to how the business technique can be further made and acclimated to help in the motivation of staff.
• Manufacturing of new item offerings should be introduced, concentrating on the more settled and creates market.

External variables

• Starting now have a greatly strong mighty advancing exertion (numbering both TV advertisements and the packaging of the things) –
• To get a greater target business segment, moving from standard lovers to including a young women toy extent of Barbie dolls.
• To get the media's thought, getting more customers from TV publicizing, uniting with a much greater group.
• Providing clients with also empowering and fast paced toys, broadening the extent of toys open.
• Provide quality things and have more fruitful and successful schedules for movement set up.
• Engineer should be enrolled or arranged into the association - Responsible for checking and surveying the way of the materials that comes into the association.
• Newer strategies for propelling the association could be through the use of casual associations, (for instance, Face book, Twitter, etc.

Part B: Develop options for continuous improvement

In this part you are to develop options for continuous improvement including a performance improvement strategy. You will also be required to brief a team of peers on the strategy, develop the strategy and encourage innovation within the group session, and incorporate results of consultation into strategy. You also will develop risk and cost-benefit analyses which you will submit to your trainer (in the role of General Manager) for review and approval.

Instructions

1. Read the case study ‘A. C. Gilbert’, Case Assignment Scenario for Part B.

You are to assume no improvements have been made and the company is still operating in the same way today as when it closed in 1967.

2. Now read the following scenario:

3. Develop a one-page performance improvement strategy related to competitiveness. Include:

1. strategic goals
2. description of proposed process or amendment to current process
3. brief explanation of how proposal will improve performance and competitiveness
4. KRAs, KPIs, targets.

4. Presentation:

Prepare to deliver a 20–30 minute management team briefing and consultation session:

(a) Distribute your proposed strategies to the team before the team briefing (team members will be other students). Distribute it to at least five (5) team members.

(b) Ask the team to consider the, including:

1. Pros and cons
2. Possible changes or improvements to the strategy

You will deliver the presentation to a team of managers (other students). Your assessor will organise suitable groups and will advise you when this is to take place.

Your assessor will observe you in leading the team briefing.

5. Now lead the session:

(a) Promote to the team the value of creativity, innovation and sustainability as essential for doing business

(b) Discuss options for your performance improvement strategy and work through group suggestions. Ensure that you:

• Use creative techniques to generate or develop ideas
• Foster creative climate and organisational learning by promoting interaction within the work group
• Work through implications of suggestions to trial them
• Encourage group to point out issues or potential problems during trialing
• If and when applicable, accept failure of ideas and recognise successful ideas.

(c) Summarise the results of the session and seek the group’s approval for the amended strategy.

(d) Incorporate results of the session into the revised strategy.

6. Develop and implement a risk analysis for the strategy.

7. Conduct a cost-benefit analysis for the strategy.

8. Arrange a time to meet with your assessor (in the role of General Manager of A.C Gilbert) to discuss the strategy, risk and cost-benefit analyses. Explain costs and benefits. Seek approval for the strategy.

9. Submit documents to your assessor. Ensure you keep a copy of all work submitted for your records.

Strategic goals

To grab greater target showcase, moving from conventional boyfriends to counting a young lady scope of barbie dolls. To grab the media consideration, getting more clients from TV promoting, connecting with a considerably greater gather of spectators Giving clients additionally existing and quick paced toys, extend scope of accessible toys Give quality items and have more fruitful and compelling techniques for conveyance set up

Holding specialists who are talented in the particular creation lines. These regarded workers will then offer assistance the preparation of newcomers and current representatives who required guide Decreasing the promoting by around half Designating a position committed to keeping up the nature of the total results of each generation line and another position whereby the measures and procedures are kept up. Division of the showcasing group, part into two workplaces one into promoting and another half shaping the business office Direct a survey, checking and recognizing all reactions gave A representative reward and compensation system will be actualize to improve the development and improvement of individual workers Audit the organization method at normal intervals, passing on reviews and surveys to each single existing worker, getting their input for upgrade the business method and execution of representatives Grow modern item and prepare in quicker and better Assignment at the practical creation.

Collecting of modern product offerings got to be displayed, centering on the more established and develop segment advertise. Online progression of the toys through web-based social networking, for example, Facebook and other online sources, for occasion on kid amusements sites

The workers that are already skilled and prepared will each be given a group / bunch of staff to prepare and give them with the information required for that toy production line. Region brief of staff Equal division of skilled employees over the distinctive toy production lines Set out a task for each group, to carry out. Reducing notice by more than 50% Halving Tv promotions and coordinating that money towards expanding the number of workers in the manufacturing process.

Newer ways promoting the company might be using social networks (such as Facebook, Twitter, Tumblr etc) permitting for the use of free advertisement.

The promoting group is to be divided into half. One half of their marketing group will be moved over to create the deals group whereas the other half will stay as the marketing frontline.

Surveys got to be made and conducted among the younger generation inquiring them what they need to see in a toy company and the assortment of toys they would need available. All feedback will be examined and acknowledged, in any case a cost benefit investigation will be made to see which alternative is more feasible than another.

A remunerate system will be in place to assist motivate representatives to work harder and compete with one another to pick up the title of ‘Employee of the month’. Ceremonies and events will be held for employees where they will be awarded with a certificate for their commitment to the company

A monthly survey process will be conducted to assess representative work fulfillment with their working environment and all directors are to thrust forward the thought of positive reinforcement.

Give positive feedback and acknowledgment to the group once they wrap up a task to motivate them to perform way better task. Engineer ought to be contracted or prepared into the company

Responsible for checking and assessing the quality of the material that come into the production Another design has the task of looking into and assessing the quality of the finished product. Review the company prepare each 6 month, to guarantee the commerce is working well meeting business key objective inside the time outline. Review Process will have done by assessing the business’s report to check the precision and commerce performance. Once trade is checked on, business plan, goal and objective will be compare to the real execution. By doing this, the company will be able to require the most fitting adjustment activity and procedures to realize the business’s plan, goal and objective. During event, such as Christmas, birthday and others occasion toys are ordinarily well known because it is what kids need to get. Present new toy range that target develop gathering of people would be a awesome methodology.

Innovative and catchy toys will attract the guardians to purchase the toys for their kids, subsequently unused line toy ought to be target not as it were at kids but moreover the guardians and develop audience. Social media got to be enormous portion of everyone’s life these day, the greatest social media would be Facebook where everybody have one that can be interface and seen any place within the world. Free notice and promotion People can too like and connect the company’s profile where they can continuously interface to the company’s update.

Customer satisfaction

Use online survey tool to measuring customer satisfaction can help to reduce the number of unhappy customer focus on these customer satisfaction metrics.

Uses email to send personalized special offers to specific groups of customers.

Build customer loyalty to increase customer satisfaction

Remember special occasions like birthdays

Strive to empower and educate customers1

Invest in a self-service support channel

Top level managers must lead from the front with customer service

Toy quality control

Critical dimensions of quality are utilizing metrics and key performance indicators (KPIs) to evaluate the complete value chain, not fair chosen functional areas.The most profitable measurements per thinks about conducted of quality metrics’ affect on productivity include defect rates, cost of adjust, guarantee costs, after-sales benefit costs, opportunity costs and costs of good and bad quality.

Toy production cost control

Watch suppliers and search for alternate sources for the same quality stock at better prices. Keep annual contract terms with suppliers to allow for changes in market condition

KPIs

Optimum utilization of resources

Utilize human resource planning software. It is important that you succeed in this endeavor in case the core targets of the organization are to be met. Training can be organized in absence of internal expertise. Process improvement Improving commerce handle will include changing existing systems, teams, or forms. For example, we got to acquire modern software, contract a new team member, or organize training for colleagues. So, we must able to communicate change.

Use apparatuses such as the Change Curve Add to My Personal Learning Plan and Kotter's 8-Step Change Model Add to My Personal Learning Plan to assist overcome resistance to change. Productivity, Workforce Efficiency& Quality of Work Effective rewards drive performance

Make shared worker responsibility—by cascading his or her objectives with others in the company. Creating an open and communicative environment counting quality feedback with respect to objectives and progress Managers more easily remain in touch with employees' progress—during each stage of objective completion and offer quick support or coaching to keep execution and due dates on track.

Cost, Profit and Growth

Develop new product lines - survey your customers about new products

Find new markets - use market research to determine if you could expand your business into new areas

Customer service - improve your customer service and develop a staff training   program

Decrease inventory

Decrease direct costs - make sure you have the right suppliers for your business and negotiate for better prices or discounts for buying in bulk

Target

A C Gilbert company’s executives, managers, and workers collectively set targets during strategic, planning, or budget discussions. Such collaboration ensures buy-in and more accurate targets. Targets can also be set by a KPI team charged with translating strategic objectives into a performance plan. Set Target which is SMART.

Presentation

Purpose

The purpose of this briefing is to present options and a recommendation to the organizational processes for continuous improvement.

Background

Alfred Carlton Gilbert was an innovator and a toy producer who designed the Erector engineering set. His original company, The Mysto Manufacturing Company, was established in 1909 to fabricate the Erector set. In 1916, Mysto became the A. C. Gilbert Company and picked up a notoriety for creating quality toys. By the 1950s, A. C. Gilbert was one of the driving toymakers within the United States with annual deals routinely topping $17 million. This was an exceptional achievement for a moderately small company.

Current situation

Current state of AC Gilbert is mass loss margins, lack of quality of product, staff are not trained and skilled. Quality of the toy products have been declined thus. Despite all this victory, he failed at one thing...planning his exit. After his retirement, the company struggled. After his passing, Gilbert's family sold its offers, and the company was never beneficial under its modern ownership. By 1967, Gilbert was out of business. So, his whole life's work, his energy and victories failed to live on. The lesson is obvious. Each effective trade needs a succession procedure. I have met with truly hundreds of business visionaries who still do not get a handle on this basic concept. Do not let your company and your life's work drop into the wrong hands.

Option proposed strategies

Retaining workers who are skilled within the distinctive production lines. These valued employees will at that point help the preparing of new recruits and current workers who required aid

Reducing the publicizing by around 50% Allocating a position committed to keeping the quality of the finish products of each production line and another position whereby the measures and methods are maintained.

Division of the marketing team, split into two departments one into marketing and another half forming the sales department

Conduct a survey, monitoring and acknowledging all feedbacks provided

An employee reward and compensation system will be implementing to improve the growth and development of individual employees

Review the company process every six months, sending out surveys and questionnaires to all existing employees, getting their feedback for improve the business process and performance of employees

Manufacturing of new product lines should be introduced, targeting the older, girls and mature segment market.

Online promotion of the toys through social media such as Facebook and other online sources, for example on kid games websites I would like our group member to consider procedure, including: pros and cons

Hire new worker over working allows the organisation to train the employee utilizing procedures we select. This will permit us to tailor the employee's training to the particular needs and practices, which can upgrade his capacity to carry out trade tasks accurately and efficiently.

An employee reward and compensation system will motivate and improve the growth and development of individual employees.

Respondents may not feel encouraged to provide accurate, honest answers through questionnaire Survey.Respondents may not feel comfortable providing answers that present themselves in an unfavourable manner

For this reason, the company should invest heavily in the recruitment process as well training of its employees.

New implementation system need high implementation cost of including staffs training possible management changing will cause office culture resistance.

Changes or improvements to strategy

The organisation need integration of data, highly integrated data will enable Ac Gilbert to respond to new opportunities as well as measure its real time performance.

Including the appropriate people on a process improvement team is critical to a successful effort. The practice (or provider) must determine the team’s size and members. Practice staff persons are the experts at what works well in the practice and what needs to be improved. Include them in identifying and planning the implementation of any strategies

First, the changes must be planned and downstream impacts analysed to assess whether they had the desired outcome or output. Once the changes are implemented, the results should be observed so that lessons learned and best practices can be used to drive future changes.

Results session Summary

After the session, the benchmark assessment and crevice examination recognized key open doors for improvement we’ll set continuous checking goals for laborer introduction in view of a reliable risk-based strategy

Create and apply composed approaches and measures to illustrate the corrected techniques

Grow more creative product advertising to allow the organization practical central points

Increment the client base and make toys regardless for young ladies and another segment promote.

Similarly crucial, is the to structure the generation organize, suppliers have to be pass on the unrefined fabric at correct time interior investing arrange. This issue will decrease the capacity cost and engaging organization to take care of the market demand

Increase the level of surveillance and further develop measures of effectiveness of the strategies implementation program.

Implement a valid monitoring system

Approval for amended Strategy

As part of the AC Gilbert’s organisation performance improvement strategy development, this procedure will be reviewed every six months from the date of approval, or more frequently if appropriate.

A SWOT Analysis of AC Gilbert will enable the company to identify the its strength and weaknesses as well as opportunities open to the company and threats being faced.

• Strengths

AC Gilbert has capital base, having being the leading toymaker in United States during 1950s

With an annual revenue topping $17 million at the time, the company was in the better position to expand its operation in another region as well other product.

It was also possible for the company to invest in research and development to come up with better quality products than the competitor

Loyalty and experience employees

Quality product crafted to last long was the company priority at that time

• Weaknesses

Failure to forecast and calculate marketplace changes. At 1960s the toy manufacturing changes were marvellous. Leading to AC Gilbert to drop in profit as well as brand name

Lack of excellent headship.

AC Gilbert was a family led business lack of involvement of expert leader

• Opportunities

Social changes that moved the request and buying example of the clients was one of the open doors introduced to AC Gilbert.

For instance, young ladies began utilizing dolls that were current, grown up and stylish. The organization should catch this open door began to deliver doll.

Changing showcasing technique and receive new promoting stages, for example, TV ad. Focus available group of onlookers through TV ad which is join sound, picture and development which make the entire bundle all the more intriguing and engaging the client.

Changes in Technology better apparatus helped the creation.

Air conditioning Gilbert would have the capacity to convey its items even in different districts grow its provincial market

• Threats

The presence of other huge toy contender, which would be wise to publicizing and had retails shops the nation over.

Better notice helped the request of the item and better conveyance channel of items

Assortment alternative scope of toys item to extensive variety of portion advertise contrast with AC Gilbert just created restricted quality range product offering to kid's market.

A cost advantage examination of AC Gilbert demonstrate that the company would have make certain choice that would have been more advantageous to it. The company need to limit a few of the cost to make them equal to the benefits gained.

The potential cost and benefits of each execution improvement procedure of AC Gilbert should be considered to distinguish the viability of these strategies.

Based on the execution improvement methodologies said above, the following table records the potential fetched and benefits involved.

From the leadership point of view, the cost of implementing performance enhancement techniques basically relate to the new TV promoting campaign and innovative motivation. TV promotion cost high Advertising agency commission and fees.

For this reason, AC Gilbert can decrease it promotion cost, meaning the company product require not to appear in TV with the same frequency as they used to. The company with suitable frequency amount of TV advertising still might pick up more reputation.

Successful R & D Innovation may lead to lower production cost

AC Gilbert might lose it existing client since of the new products lines, but with the unused item line it'll picked up unused section market.

To improve the efficient of the supply chain, AC Gilbert apply Just in time supply chain. Raw material cost can be minimising by this framework. In any case, it may cause to misfortune of client when the request is high.

Data gathering by customer survey could provide the company with better understanding of customer need, but false and inaccurate may lead to wrong decision making cause losses.

To increase the productivity, the company invest heavily in the recruitment process and employees training program which mean more salary of skilled personnel and extra training fees.

By conducting the cost benefit analysis, AC Gilbert can decide whether to undertake these performance improvement strategies. The company can frame appropriate strategic goals and develop appropriate before and after measures of strategies success.

Also, the resources allocation required to implement these strategies can be properly estimated under the cost benefit analysis

Part C: Implement innovative processes

In this part you are to assume that the company is still operating. The Production Manager, John Jones, has developed an idea for improving efficiencies in the manufacturing process.

In this task you will need to develop procedures in order to implement the innovative processes.

Based on Part 1 of the case study scenario for Part C, you will develop an implementation plan to embed the new process. Based on Part 2 of the case study, you will need to amend your plan to ensure success.

Instructions

1. Turn to the case study scenario for Part C, ‘Implement an innovative process’ - Review ‘Part 1 – Implementation’. Examine all aspects of the new process to be implemented.

2. Develop action plans for:

1. Transitioning to the change and
2. Communicating the change.

In each action plan, you need to include:

• Activities, objectives, measures (KPIs), timeframes
• Activities to promote the process and sustainability
• Activities to reduce any negative impact on people.

3. Develop two (2) contingency plans for possible implementation issues in relation to activities in your action plans.

4. Review ‘Part 2 – Follow up’. Examine implementation issues and failures. Examine the causes and manage any emerging challenges and opportunities.

5. Amend your action plans and contingency plans to address any implementation failures.

6. Identify the costs and benefits of any improvements based on your examination of the implementation (Part 1) and write these up in a brief report for distributing to the other managers. (half to one page)

7. Develop a schedule for evaluation and continuous improvement. Include regularly scheduled:

• Evaluation activities, regularly repeated over a suitable timeframe
• Evaluation activities to capture learnings from all work activities
• Activities to embed learning into work processes.

Several contingency plans related to possible implementation issues

Implement innovative processes

• Promote CI
• Training, seminars, posters, competitions
• Build a CI framework
• CI policy, audits, KPIs
• Communicate the cost and benefits
• Develop a transition and contingency plan
• Implement the plan
• Analyse failure
• Fishbone diagram/cause and effect diagram

Develop options for continuous improvement

• Continuous improvement theories
• Plan-Do-Check-Act Cycle (PDCA), Total Quality Management (TQM), Kaizen, Six Sigma, Lean Manufacturing/Production
• Create a culture of innovation
• OCTAPACE (Openness, Confrontation, trust, authenticity, proactivity, autonomy, collaboration and experimentation)
• Manage new ideas
• Accept failures, celebrate and embed success, assess ideas (CBA) and approve
• Don’t make it overly complicated

Innovation

The way toward deciphering a thought or innovation into a decent or administration that makes esteem or for which clients will pay.

To be called advancement, a thought must be replicable at a sparing expense and should fulfill a particular need.

Advancement includes consider utilization of data, creative ability and activity in determining more noteworthy or diverse esteems from assets, and incorporates all procedures by which new thoughts are created and changed over into helpful items.

In business, advancement regularly comes about when thoughts are connected by the association keeping in mind the end goal to additionally fulfill the requirements and desires of the clients.

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 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 improving 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 re-tooling. 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:

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 over-estimate 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 as 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 disadvantaged is a key concern 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

Appendix 1 – Case Assignment Scenario for Part A

A. C. Gilbert

History 1909–1961

Alfred Carlton Gilbert was an inventor and a toy manufacturer who invented the Erector engineering set. His original company, The Mysto Manufacturing Company, was founded in 1909 to manufacture the Erector set. In 1916, Mysto became the A. C. Gilbert Company and gained a reputation for producing quality toys.

By the 1950s, A. C. Gilbert was one of the leading toymakers in the United States, with annual sales regularly topping $17 million. This was an outstanding achievement for a relatively small company.

In 1961, A. C. Gilbert, Senior, died, leaving the company in the hands of his son, A. C. Junior. At the time A. C. Junior took over the firm, the company was established as a traditional, reliable and profitable manufacturer of educational toys.

Product lines and rationale

1. C. Gilbert produced train sets, but their most popular lines were chemistry sets, microscopes and their best seller, the Meccano-like Erector engineering sets that had been popular with children for more than 50 years.
2. C. Gilbert toys were not cheap. They were high quality, solidly crafted and made to endure. Parts and packaging were designed to last for many years, with the Erector set packaged in long-lasting metal boxes. The focus was on educational toys, primarily aimed at boys rather than girls. The company had a limited range, but what they did manufacture was top-quality and highly regarded.

Systems and processes

1. C. Gilbert was a small company. The following model demonstrates the systems and processes in place.

Note: These flow charts have been included for assessment purposes only, and may not accurately reflect the actual processes in place at A. C. Gilbert

History 1961–1967

As the 1950s moved into the 1960s, there were huge cultural changes across the world. The fifties were a very traditional era of family values and morals, conservative and staid. Then came the ‘swinging sixties’. The sixties were a time of rapid change both technologically and culturally. Old-fashioned values gave way to new moral freedoms.

Where the fifties represented solidarity and familiarity, the sixties embraced change. Everything was bolder, brighter and more daring. A new young president and rising social activism by youth saw changes in clothing, music and interests. Young people rebelled against the values of their parents and embraced a more fast-paced, exciting and riskier lifestyle.

Changes to the toy industry

Cultural changes had a huge impact in western toy markets. Barbie and Action Man became ‘must have’ toys. Girls moved away from baby dolls and cots and wanted dolls that were more grown up, modern and trendy. They wanted dolls they could dress in the latest fashions and who had exciting ‘careers’, boyfriends and cars of their own. Boys were moving away from the traditional train sets and towards exciting new slot-car racing sets and action figures from popular movies and television shows.

Traditionally, toy advertising had been done via magazine promotions, but the sixties brought in a new phenomenon: television advertising. A hugely powerful medium, TV advertising became increasingly ‘hard sell’, with toys heavily promoted, especially in the lead up to Christmas. Children wanted the latest and greatest toys that they saw in these advertisements, and they put pressure on their parents to buy, which their parents did.

Retailing of toys during this period reflected a shift in retailing in general. Small, specialty retailers with experienced and knowledgeable staff were going out of business, replaced by large discount stores catering for the mass market. The goal of this type of retailer was to turn over stock. Heavily advertised lines were in demand, and that is what they would stock. Cheap was in, and giant retailers were after a quick profit from easily saleable, inexpensive products. They weren’t interested in catering to a niche market by stocking more expensive, harder to shift lines.

Packaging was bright and colourful in order to attract children growing up in a world of colour TV, hypercolour clothing and visual stimulation provided by the swinging sixties.

Effects on A. C. Gilbert

As a small, traditional company, A. C. Gilbert was slow to react to these changes. It may have been that they were not aware of the changes or were overly confident that their good name and reputation were sufficient to continue trading as before. The consequences of this short-sightedness soon became apparent.

1961 (figures approximate)

This drop in sales was also reflected in a fall in the share price of the company.

Outcomes

As a result of the falling profits and share price, the company became attractive to an opportunistic businessman, Jack Wrather. Jack Wrather was an independent television producer who had made his money producing the popular programs ‘Lassie’ and ‘The Lone Ranger’. Jack Wrather wanted to purchase a successful business and felt that in
A. C. Gilbert, he had the opportunity to use his knowledge of popular entertainment and apply it to the production of toys. He purchased 52% of A. C. Gilbert for $4 million and immediately set about making his mark on the company. A. C. Junior stayed on as Chairman but his influence was minimal.

Actions taken by Jack Wrather

• Set a goal to achieve sales of $20 million in 1963.
• Replaced the top A. C. Gilbert executives with his own people.
• Initiated a massive advertising campaign.
• Increased sales staff by 50%.
• Instructed sales staff to adopt an aggressive sales approach.
• Introduced 50 new toy lines, raising the lines to 307.
• Changed the focus from traditional boys' toys to ranges for pre-school children,
  and dolls and other toys aimed at girls between the ages of 6 and 14.
• Spent $1 million on changing the packaging for all lines to brighter, more colourful boxes.

Performance report

Key milestones

1962:

• Jack Wrather purchased 52% of A. C. Gilbert.
• Replaced existing executives with his own people.
• Increased sales staff by 50%.
• Implemented extensive television advertising.
• Set an organisational goal to achieve sales of $20 million for 1963.
• Company recorded a loss of $281,000.00.
• Introduced 50 new lines in less than 12 months, using existing engineers and production departments who lacked training and experience in the new product range.
• Repackaged existing lines at a cost of $1 million.

1963:

• Sales and profits down on previous year.
• Anticipated drop in profits due to expansion and cost of establishing new lines.
• Sales fell short of expectations.
• Decline in quality of toys – feedback indicated products poorly made and designed (dolls did not even come with a change of clothing).
• New range perceived by customers as poor quality and overpriced – not value for money nor attractive to the target market.

1964:

• Jack Wrather fired most of the top management team he had hired two years previously.
• Crisis management led to multiple changes and dramatic measures being taken and then changed – often one measure contradicting the previous.
• Jack Wrather hired new CEO – Isaacson.
• Isaacson fired the entire sales team.
• Isaacson made huge cutbacks in spending.
• Sales were channelled through independent manufacturer’s reps, which was cheaper than maintaining an in-house sales force.
• Long-standing relationships soured as the independent reps worked on commission and pushed sales, with no interest in maintaining or building relationships with customers.
• C. Gilbert had built its success on personal service and building relationships – that was destroyed within 12 months.
• C. Gilbert Junior died and is replaced as Chairman by Jack Wrather. Isaacson assumes the role of President.
• Prior to Christmas, many of the previous year’s failed products were deleted and 20 new items introduced.
• Reduced the price of core lines such as the Erector set from $75 to $20, but quality also impacted – cardboard box instead of metal boxes, and brittle parts instead of sturdy, long-lasting parts.
• Sales increased and there was some degree of optimism.

1965:

• Sought to capitalise on popular crazes such as James Bond and The Man from U.N.C.L.E. by introducing action figures for Christmas.
• Due to internal strife and staff cutbacks, the new lines were not delivered to the stores until after Christmas.
• Operated on a skeleton workforce.
• Due to lack of staff, A. C. Gilbert was unable to implement changes or introduce new lines quickly enough to capitalise on trends.

1966

• Increased advertising spending to $3 million.
• Introduced point-of-purchase display products supplied to dealers free of charge.
• Borrowed $6.25 million, granted on the event that the company made a profit in 1996.
• Company made a loss of $12,872,000.00.

1967

• February – A. C. Gilbert closed its doors after 58 years.

Note: This case study is a true story. You may wish to read more about this organisation or to conduct additional research online.

Appendix 2 – Case Assignment Scenario for Part B

A. C. Gilbert

History 1909–1961

Alfred Carlton Gilbert was an inventor and a toy manufacturer who invented the Erector engineering set. His original company, The Mysto Manufacturing Company, was founded in 1909 to manufacture the Erector set. In 1916, Mysto became the A. C. Gilbert Company and gained a reputation for producing quality toys.

By the 1950s, A. C. Gilbert was one of the leading toymakers in the United States, with annual sales regularly topping $17 million. This was an outstanding achievement for a relatively small company.

In 1961, A. C. Gilbert, Senior, died, leaving the company in the hands of his son, A. C. Junior. At the time A. C. Junior took over the firm, the company was established as a traditional, reliable and profitable manufacturer of educational toys.

Product lines and rationale

1. C. Gilbert produced train sets, but their most popular lines were chemistry sets, microscopes and their best seller, the Meccano-like Erector engineering sets that had been popular with children for more than 50 years.
2. C. Gilbert toys were not cheap. They were high quality, solidly crafted and made to endure. Parts and packaging were designed to last for many years, with the Erector set packaged in long-lasting metal boxes. The focus was on educational toys, primarily aimed at boys rather than girls. The company had a limited range, but what they did manufacture was top-quality and highly regarded.

Systems and processes

1. C. Gilbert was a small company. The following model demonstrates the systems and processes in place.

Note: These flow charts have been included for assessment purposes only, and may not accurately reflect the actual processes in place at A. C. Gilbert.

History 1961–1967

As the 1950s moved into the 1960s, there were huge cultural changes across the world. The fifties were a very traditional era of family values and morals, conservative and staid. Then came the ‘swinging sixties’. The sixties were a time of rapid change both technologically and culturally. Old-fashioned values gave way to new moral freedoms.

Where the fifties represented solidarity and familiarity, the sixties embraced change. Everything was bolder, brighter and more daring. A new young president and rising social activism by youth saw changes in clothing, music and interests. Young people rebelled against the values of their parents and embraced a more fast-paced, exciting and riskier lifestyle.

Changes to the toy industry

Cultural changes had a huge impact in western toy markets. Barbie and Action Man became ‘must have’ toys. Girls moved away from baby dolls and cots and wanted dolls that were more grown up, modern and trendy. They wanted dolls they could dress in the latest fashions and who had exciting ‘careers’, boyfriends and cars of their own. Boys were moving away from the traditional train sets and towards exciting new slot-car racing sets and action figures from popular movies and television shows.

Traditionally, toy advertising had been done via magazine promotions, but the sixties brought in a new phenomenon: television advertising. A hugely powerful medium, TV advertising became increasingly ‘hard sell’, with toys heavily promoted, especially in the lead up to Christmas. Children wanted the latest and greatest toys that they saw in these advertisements, and they put pressure on their parents to buy, which their parents did.

Retailing of toys during this period reflected a shift in retailing in general. Small, specialty retailers with experienced and knowledgeable staff were going out of business, replaced by large discount stores catering for the mass market. The goal of this type of retailer was to turn over stock. Heavily advertised lines were in demand, and that is what they would stock. Cheap was in, and giant retailers were after a quick profit from easily saleable, inexpensive products. They weren’t interested in catering to a niche market by stocking more expensive, harder to shift lines.

Packaging was bright and colourful in order to attract children growing up in a world of colour TV, hypercolour clothing and visual stimulation provided by the swinging sixties.

Effects on A. C. Gilbert

As a small, traditional company, A. C. Gilbert was slow to react to these changes. It may have been that they were not aware of the changes or were overly confident that their good name and reputation were sufficient to continue trading as before. The consequences of this short-sightedness soon became apparent.

1961 (figures approximate)

This drop in sales was also reflected in a fall in the share price of the company.

Outcomes

As a result of the falling profits and share price, the company became attractive to an opportunistic businessman, Jack Wrather. Jack Wrather was an independent television producer who had made his money producing the popular programs ‘Lassie’ and ‘The Lone Ranger’. Jack Wrather wanted to purchase a successful business and felt that in
A. C. Gilbert, he had the opportunity to use his knowledge of popular entertainment and apply it to the production of toys. He purchased 52% of A. C. Gilbert for $4 million and immediately set about making his mark on the company. A. C. Junior stayed on as Chairman but his influence was minimal.

Actions taken by Jack Wrather

• Set a goal to achieve sales of $20 million in 1963.
• Replaced the top A. C. Gilbert executives with his own people.
• Initiated a massive advertising campaign.
• Increased sales staff by 50%.
• Instructed sales staff to adopt an aggressive sales approach.
• Introduced 50 new toy lines, raising the lines to 307.
• Changed the focus from traditional boys' toys to ranges for pre-school children,
  and dolls and other toys aimed at girls between the ages of 6 and 14.
• Spent $1 million on changing the packaging for all lines to brighter, more colourful boxes.

Performance report

Key milestones

1962:

• Jack Wrather purchased 52% of A. C. Gilbert.
• Replaced existing executives with his own people.
• Increased sales staff by 50%.
• Implemented extensive television advertising.
• Set an organisational goal to achieve sales of $20 million for 1963.
• Company recorded a loss of $281,000.00.
• Introduced 50 new lines in less than 12 months, using existing engineers and production departments who lacked training and experience in the new product range.
• Repackaged existing lines at a cost of $1 million.

1963:

• Sales and profits down on previous year.
• Anticipated drop in profits due to expansion and cost of establishing new lines.
• Sales fell short of expectations.
• Decline in quality of toys – feedback indicated products poorly made and designed (dolls did not even come with a change of clothing).
• New range perceived by customers as poor quality and overpriced – not value for money nor attractive to the target market.

1964:

• Jack Wrather fired most of the top management team he had hired two years previously.
• Crisis management led to multiple changes and dramatic measures being taken and then changed – often one measure contradicting the previous.
• Jack Wrather hired new CEO – Isaacson.
• Isaacson fired the entire sales team.
• Isaacson made huge cutbacks in spending.
• Sales were channelled through independent manufacturer’s reps, which was cheaper than maintaining an in-house sales force.
• Long-standing relationships soured as the independent reps worked on commission and pushed sales, with no interest in maintaining or building relationships with customers.
• C. Gilbert had built its success on personal service and building relationships – that was destroyed within 12 months.
• C. Gilbert Junior died and is replaced as Chairman by Jack Wrather. Isaacson assumes the role of President.
• Prior to Christmas, many of the previous year’s failed products were deleted and 20 new items introduced.
• Reduced the price of core lines such as the Erector set from $75 to $20, but quality also impacted – cardboard box instead of metal boxes, and brittle parts instead of sturdy, long-lasting parts.
• Sales increased and there was some degree of optimism.

1965:

• Sought to capitalise on popular crazes such as James Bond and The Man from U.N.C.L.E. by introducing action figures for Christmas.
• Due to internal strife and staff cutbacks, the new lines were not delivered to the stores until after Christmas.
• Operated on a skeleton workforce.
• Due to lack of staff, A. C. Gilbert was unable to implement changes or introduce new lines quickly enough to capitalise on trends.

1966

• Increased advertising spending to $3 million.
• Introduced point-of-purchase display products supplied to dealers free of charge.
• Borrowed $6.25 million, granted on the event that the company made a profit in 1996.
• Company made a loss of $12,872,000.00.

1967

• February – A. C. Gilbert closed its doors after 58 years.

Note: This case study is a true story. You may wish to read more about this organisation or to conduct additional research online.

Reference material

• Tibballs, G., 1999, Business blunders, ‘A. C. Gilbert: Toy Story’, Robinson Publishing Ltd, pp. 43.

Appendix 3 – Case Assignment Scenario for Part C

Implement an innovation 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:

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.

Note: This case study is a true story. You may wish to read more about this organisation or to conduct additional research online.

Reference material

• Tibballs, G., 1999, Business blunders, ‘A. C. Gilbert: Toy Story’, Robinson Publishing Ltd, pp. 43.