BSBMGT608 Manage innovation and continuous improvement

Assessment Task 1

Review programs, systems and processes

Performance objective

To demonstrate the skills and knowledge required to review, evaluate and analyse programs, systems and processes.

Assessment description

Based on the case study provided, you will write a report in which you outline a performance and sustainability review strategy, evaluate the strategy, analyse performance reports and trends, and describe how you would seek advice from specialists to identify technological solutions.

Procedure

1. Read the case study ‘A. C. Gilbert’ in Appendix 1.
2. Analyse the information provided and prepare a report addressing the following six (6) points.
   1. Describe the key systems and processes used by A. C. Gilbert:
      1. supply chain
      2. operational systems
      3. product/service delivery.
   2. Analyse the three key systems and processes and develop the elements of your review strategy. Applying your knowledge of quality management and continuous improvement theory, develop performance and sustainability measures, assessment tools and techniques that you would use to evaluate the effectiveness of the three key systems and processes.

      In your report, include if applicable:

      1. lists of key result areas (KRAs)
      2. lists of key performance indicators (KPIs)
      3. a description of performance review processes
      4. a sample service level agreement.
   3. Using the data provided for results up to 1966, for each of the three key systems, 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.

   4. Using the data provided for results up to 1966, analyse the variances from plans and targets for the key result areas (KRAs). Include discussion on performance with regards to:
      1. quality – design/manufacturing
      2. sales
      3. profit
      4. supply chain performance (delivery)
      5. business growth – staff and management performance and/or turnover.
   5. 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. Discuss the following in your report:

      1. market share
      2. reputation
      3. stability
      4. profit
      5. sales
      6. ability to adapt to change
      7. customer service standards
      8. innovation
      9. employee performance
      10. production and manufacturing.

          Apply creativity skills to identify missed opportunities to improve business performance. Describe at least one missed opportunity in detail. Include an action plan for implementing the improvement in your report.

   6. 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? Consider:
      1. internal – engineers, production staff, manufacturing staff, sales personnel, human resources personnel
      2. external – marketing consultants, advertising experts, engineers or designers, IT consultants.
3. Submit your report to your assessor as per the specifications below. Ensure you keep a copy of all work submitted for your records.

Specifications

You must provide:

• a written report submitted within agreed timeframe.

Your assessor will be looking for:

• reference to, and application of, quality management and continuous improvement theories in review strategy
• reference to and application of sustainability practices in review strategy
• analytical skills to identify improvement opportunities
• demonstration of creativity skills to think laterally and identify improvement opportunities.

Adjustment for distance-based learners

• No variation of the task is required.
• Documentation can be submitted electronically or posted in the mail.

Assessment task 2

Develop options for continuous improvement

Performance objective

To demonstrate the skills and knowledge required to develop options for continuous improvement.

Assessment description

Based on the case study provided, you will develop a performance improvement strategy, 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 will develop risk and cost-benefit analyses which you will submit to your assessor for approval.

Procedure

1. Read the case study ‘A. C. Gilbert’ (Appendix 1). Assume no improvements have been made and the company is still operating in the same way today as when it closed in 1967.
2. Consider the following scenario:

   Your manager, as per organisational processes for continuous improvement, has asked you to develop a performance improvement strategy, brief the management team, develop the idea with the team, seek the team’s approval and seek final approval from your manager.

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. Prepare to deliver a 20–30 minute management team briefing and consultation session:
   1. distribute your proposed strategies to team (team members may be other learners, or other group approved by assessor)
   2. ask team to consider strategy, including:
      1. pros and cons
      2. changes or improvements to strategy
      3. preparing to discuss changes or improvements at team briefing and consultation session.
   3. agree on a time for session (agree on time with assessor to ensure assessor can observe session).
5. Lead session:
   1. discuss options and work through group suggestions
   2. use creative techniques to generate or develop ideas
   3. work through implications of suggestions to trial them
   4. encourage group to point out issues or potential problems during trialling
   5. if and when applicable, accept failure of ideas and recognise successful ideas.
6. Summarise results of session and seek group’s approval for amended strategy.
7. Incorporate results of session into revised strategy.
8. Develop a risk analysis for strategy.
9. Develop a cost-benefit analysis for strategy.
10. Arrange a time to meet with assessor (in role of your manager) to discuss strategy, risk and cost-benefit analyses. Explain costs and benefits. Seek approval for strategy.
11. Submit documents to your assessor as per the specifications below. Ensure you keep a copy of all work submitted for your records.

Specifications

You must provide a:

• one-page performance improvement strategy
• 20–30 minute team briefing and consultation session (team members may be other learners, or other group approved by assessor)
• revised one-page performance improvement strategy
• written risk analysis
• written cost-benefit analysis.

Your assessor will be looking for:

• application of quality management and continuous improvement theories in improvement strategy
• demonstration of creativity and innovation theories in group consultation
• application of organisational learning principles
• demonstration of cost-benefit analysis
• demonstration of risk management
• analytical skills to identify improvement opportunities
• demonstration of creativity skills to think laterally and identify improvement opportunities that come from group
• demonstration of learning skills to develop options for continuous improvement
• demonstration of teamwork and leadership skills to lead group session.

Adjustment for distance-based learners

• No variation of the task is required.
• A follow-up interview may be required (at the discretion of the assessor).
• Documentation can be submitted electronically or posted in the mail.
• Briefing and consultation session may be conducted and observed live or via an appropriate teleconferencing tool.

Appendix 1 – A. C. Gilbert

Assessment task 3

Implement innovative processes

Performance objective

To demonstrate the skills and knowledge required to implement innovative processes.

Assessment description

Based on part 1 of the case study provided (see Appendix 1), you will develop an implementation plan to embed a new process. Based on part 2 of the case study (see Appendix 1), you will need to amend your plan to ensure success.

Procedure

1. Turn to the case study ‘Implement an innovative process’ (Appendix 1).
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 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. Amend your action plans and contingency plans to address implementation failures.
7. 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.
8. Submit documents to your assessor as per the specifications below. Ensure you keep a copy of all work submitted for your records.

Specifications

You must provide:

• action plans for transition, communication
• two contingency plans related to transition and communication action plans
• amended action plans and contingency plans based on data in part 2 of the case study
• evaluation and continuous improvement schedule.

Your assessor will be looking for:

• application of quality management and continuous improvement theories to planning and scheduling activities
• application of creativity and innovation theories to scheduling evaluation and continuous improvement
• application of organisational learning principles to continuous improvement planning
• application of sustainability practices to planning/revising plans
• analytical skills to identify improvement opportunities based on data in case study
• demonstration of creativity skills to think laterally and identify improvement opportunities to revise activities based on data in case study
• demonstration of learning skills to develop options for continuous improvement from data in case study.

Adjustment for distance-based learners

• No variation of the task is required.
• A follow-up interview may be required (at the discretion of the assessor).
• Documentation can be submitted electronically or posted in the mail.

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 Training Loss of productivity	$1.2 million $20,000 $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.

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