This report aims to explore the business plan and problems that are faced by the B&A Toy Warehouse. Before, implementing the warehouse, Tony confronted different underperformance areas. Consequently, he wanted to improve the productivity by 10 percent. The first section of the report focuses on recommendation how to enhance the processes. Time, cost, quality and production are concerned. It is considered that the system which is used in warehouse has been outdated. The updating is essential. On the other hand, communication is a long last problem and must be resolved the firm.
Then, the further and insight analysis carried by the Human Resources has found several problems that lead to the failure of the system and impact the ability to achieve the organisational goals. The performance measures are not suitable enough for employees to understand and work under. Thus, the further recommendations are advised. Finally, the need of change of strategy and work method is urgent. Applying different assumptions, firm can work with two alternative systems. One controls the entire stock, and other control the stock for specific customers. It helps the firm control the stocks and layout the warehouse better. Finally, the firm could achieve its goals and missions effectively.
Tony, a manager of B&A Toy Warehouse, has evaluated performance by comparing current performance against the desired level of performance. This allowed determining areas for improvement to assist the warehouse in achieving its productivity goals. On the other hand, he also implemented his strategies and identified the areas that require corrective action. He also completed a more detailed analysis of the warehouse system and process and identifies the specific steps required to improve productivity.
However, there are some problems happening within the firm that needs more attentions. Thus this report aims to recommend some implement plan for Tony. This report will be divided into four sections. The first section is the initial recommendations for performance improvement. Then, the performance analysis will be discussed to explore the failure of the warehouse’s system and areas need to be improved. This section is followed some recommendations for changes and improve these areas. Finally, there is a recommendation on how to change the strategy and work methods at B&A Toy warehouse.
Tony has evaluated the warehouse performance by comparing the current performance and the desired level of performance. The result is that the performance must increase in ten percent in several areas to achieve the organisational goals. These areas include the average time which is required for order to be processed, the cost for processing order, quality which reduces the error rate, and the number of production processed per day. Thus, different recommendations could be discussed to enhance and improve the performance in these areas.
Current performance shows that order needs averagely 80 minutes to be completely processed. That means for 8 hours of working, the maximum orders can be processed are six. It is slow process and the warehouse requires much more effective time to process the order. The average time must be reduced to 72 minutes and properly lower so that the performance can be considered as efficient.
Different factor could impact the time of procession. First, this could be the processing system (WMS) is out of date. It is not effective to separate the orders from priority or normal. On the other hand, the system may not have large memory to keep track on what has been ordered and could be crashed if processing much more orders at the same time. Updating systems could be one of the solutions to improve the memory as well as the speed of the system. Another recommendation is that the ware house could use alternative system to deal with Priority order while the original system can be used for the normal order. Two systems can be more efficient than one.
Warehouse layout could affect the time to dispatch products for the orders. Rearranging the warehouse is necessary if the firm want to reduce the time. It helps the staffs easily access the stocks. The stocks could be sorted from most popular in alphabet orders to least famous one. Furthermore, training staffs is important. More experienced could process quicker by entering the order in the system and locating the stocks in the warehouse faster. Consequently, the time can be reduced and more customers could be served.
For every business, reducing cost is the most essential issue to deal with if the firm wants to improve the organisational performance. In term of B&A Toy Warehouse, it seems that the cost is higher than expected. The current performance cost the warehouse $200 per processing order. In long term, this could be a large figure which could cause some profit loss. Yet, to enhance the performance, the firm must reduce the cost more than ten percent which is $180 per order.
In order to achieve the expected productivity improvement, the warehouse must consider replacing the system or using two alternating systems. It could decrease the time of process according to previous discussion. It also means that more products could be processed in time manner so that the cost of entering one order could be the cost of processing one and half orders. On the other hand, different warehouse layout could cost at first but save some budget for the processing later. This is because the fuel required to access the stock is reduced due to the ease of accessing the stocks after relocating the warehouse. Finally, there may be cost of external factors, communication problems or even lack of skills. It is recommended that all staffs must be fully acknowledged the warehouse system to prevent misunderstood that can lead to lead to underperformance. More cost could be consumed to fix these mistakes.
Quality is the most important to increase the warehouse public image and customer’s satisfaction. Error could also relate to more cost and less profits. However, the error rate for the B&A warehouse can be considered quite high. Ten percentage of bad quality performance is not acceptable. It is advised to reduce to less than one percent of error rate for the business to accomplish the effective performance.
There are some reasons that the warehouse lacks of the quality. The first reason is the communication skills. It is essential for Tony to develop the effective communication workplace. This means less time consume, less cost and higher quality of performance. Since the processing system is two years old, it is time for some upgrade. The firm also should have trained supervisors that have good communication skills to transfers the process from the database to employees. This could meditate the problem of misunderstood.
On the other hand, Tony must also have any contingency plan to deal with bad quality of products. Customer services must have legacy for returning any error productions. Furthermore, the warehouse also needs to discuss with suppliers how to deal with underrated products. To prevent any future errors, training sections for staffs are required by using past problems as reference. Interim programs could be hold to get the employees to get insight the new systems and the work flow of the business. Hence, minimising the error could be achieved.
Tony evaluated the production processed per day. The figure is smaller than expected. The warehouse is planned to achieve fifty five orders processed per day. In fact, the current performance is only fifty orders. This is ten percent lower than planned. This could be caused several factors as discussed above including time consuming, costs, or errors. Different reasons could be discussed to find solutions to these problems.
First, it is time needed to communicating between the administrative teams and the warehouse staffs. This communication seems to be ineffective. The administrative team only records and processes the order through the systems. However, in term of stocks, it must be a frequently check whether the system stocks and realistic amount are the same. Sometimes, error can happens and reduces the production rate per day. Monthly report could be helpful to keep track on stocks to prevent running out of stocks and slow down the production.
Then, it is essential to have different skills supervisors to keep track on the warehouse employees. It does not only encourage the employees work better and more effective but also directs the employees where the stocks are and prevent the situation which the employees cannot find the stocks. Directive instruction could be useful for quickening the process and thus, the production rate per day could be increased.
After identifying what actions are needed to achieve better performance, the firm needs a thorough insight of the organisational performance in order to monitor and implement the process. According to the annual evaluation report, there are some areas of non-performance against the planned objectives. Several systems failures could cause bad performance. Finally, different performance indicators are required to be refined to achieve organisational goals.
3.1 Areas of Non- performance
Currently, the organisation uses two years old custom built electronic warehouse management system (WMS) which has had an enormous impact on productivity. Tony, the management, has generated different reports that allow him to analyse ware systems and processes. The reports are comprised of production, time, packers and boxers. This shows how effective the firm is. Unfortunately, the results are below the expected performance. For instance, the time required for one order to be processed is 72 minutes comparing to 80 minutes of current performance. That means the system are not working as planned or comparing to previous years.
On the other, human resources department is one of underperformance of the organisation. According to the SWOT analysis of the firm, it is easy to find that the problem of absenteeism is not solved. It is the biggest weaknesses of the firm. Another reason is that the loose of management cost the organisation the missing of staffs. Employing junior supervisors also is an issue. These supervisors are new to management roles. In fact, they require intensive coaching and support from warehouse manager.
There are also different not working areas within the workplace and Tony has identified in his report. The most important one is the training process and communication in the warehouse. The number of training sessions reduced causes the employees to be confused of their situations and the organisational performance. For instance, there are 20% of employees do not know what performance level is expected of them. In other words, employees do not understand clearly or acknowledge the warehouse’s legacy, objects, missions and goals. This causes the ineffective performance of the warehouse during the year.
There are some underperformance are which is indicated bellows
Key Result Area
Employee attended training sessions
Table 1 The underperformance Table
3.2 Performance Failures
There are several performance failures within the warehouse.
The communication at B&A Toy Warehouse is considered to be lacked of efficiency. The report has showed that the firm managers or administrative teams never communicated about the goals or missions of the company. For instance, the Human Resources has indicated that the KPI’s document does not provide employees with clear expectations on what needs to be achieved and when. On the other hand, the KPI’s not aligned with warehouse goals leads to employees are not clear on what the warehouse is trying to achieve.
Furthermore, The WMS seems to be working for the small warehouse but for the big one, it also needs a strong communication base. Since the system separates the priority and normal customers, there are two departments working on processing the orders. However, it is clear that these departments must work together or somehow link to check whether there is sufficient production in stock for dispatching. However, it seems the company working as different departments and they are separated and do not have the required communications.
To assist the manager in understanding the warehouse operations, and to identify where he can make improvements to achieve performance objectives and measures, the number of orders processed and absenteeism for each month over the last year was graphed. It is clear that the absenteeism has strong impact on the order processed.
The highest of orders processed results in the least absentees in September to Decembers. Otherwise, the least amount of order processed happened in June and July when the absenteeism is highly increased. It means that the company has failed to plan the replacement for those who absent. On the other hand, the Human Resources only reported these figures when required by Tony. It is concerned that the communication and the frequent reports from all department are lacked of. If the firm had planned for this situation, the performance of the firm could be more consistent. In fact, the Human Resources had not held enough training for new staff to take place in the company in replacing the absentees. The firm only focuses on good orientation and induction programs that could ensure the new employees to speed quickly. However, the quality and ability to replace the experienced staffs are missing.
3.3 Performance Indicators
The performance indicators in B&A Toy Warehouse include absenteeism, turnover, long service leave liability, annual leave liability, employee engagement and employee attended training sessions. However, there must be more indicators in term of the processing system (WMS). These indicators must be enhance and implemented annually to achieve better results.
The performance of the ware house has been ineffective and inefficient. It is necessary to have some changes based on several reports and evaluations. According to SWOT analysis there are weaknesses and threats could be eliminated or minimised. Thus, recommendations are advised the warehouse how to meditate the situation. Then performance measures are identified and redefined. Finally, the training and development programs must be improved for better organisational performances.
One of the most important recommendations is to update the current warehouse management system. It could be in term of upgrading the memory for the processing order quicker. Another advice is to alternate different systems to handle one of the customers’ streams. Using two systems could improve the effectiveness of the firm. Training is required for experienced and new staffs since technology changes from time to time.
Another recommendation is to meditate the communication situation. In case of the system is updated, the staffs must have a source of communications such as reports, emails, or in person contacts to acknowledge the work. Furthermore, the dispatching and processing staffs must together check the current stocks in the system and in the warehouse. It ensures the misunderstanding is minimising. Training for better presentation and communication is useful not only for the internal department but also for external. Annual reports and monthly reports must simultaneously written and read by the managers. It could help the managers understand the situation quicker and thus, solutions are discussed.
Other weakness of the firm is absenteeism. The warehouse must have a control system for absenteeism and have proper training program for new staffs to replace the absentee when necessary. The training must ensure that the new staffs must work effectively not only for getting up to speed. This can also be applied to the junior supervisors who must have intensive coaching and support from Warehouse manager. Warehouse layout is also a problem. Currently, stocks are difficult to access due to this issue. Rearranging the warehouse and relocating stocks in logical order are required. For instance, the order could be from the most alphabetically important to the least famous one.
Finally, there is minor issue due to the forklift license. The firm requires forklift license for staff to be able to drive a forklift. This minimises the number of staffs could drive a forklift. In fact, this has huge impacts on dispatching the orders. There are not enough staffs so that the time for the production to be dispatched is slower. Employing more forklift driver is necessary to reduce the load of work and speed up the process. Furthermore, it could solve the problem of Industrial action form Union members due to lack of licensed forklift drivers.
4.2 Performance Measures
Currently, there are two types of performance measures and assessment tools and techniques at B&A Toy Warehouse. The first one is the key results areas (KRA) and the other is the key performance indicators (KPI). These measures ensure that all warehouse employees understood the performance measures for their role. The measures are done annually however to be more effective, it is recommended to have the employees assessed every half of the year.
Upon reviewing the report provided by Human Resources, there are some issues due to several reasons discussed in above sessions. For instance, only 80% of employees have documented KRA and KPI since the rest does not know what performance level is expected of them. To be more specific, the KPI does not aligned with warehouse goals, or it is written using SMART format. Thus, to improve the performance, the performance measure must be changed.
Instead constructing annual scorecards, it is useful to have survey and feedback months from the staffs. Then, the performance measure and indicators must be written clearly and easy to understand for staffs. Every quarter, the assessment will be carried out. Consequently, the best performers could be promoted and the under-performers must be encouraged to do better.
All the necessary changes to the performance measures are included in section 3.3 of this document.
4.3 Development and Training
4.3.1 Individual and groups
The training is important for individuals. Therefore, the training must include different communication, explanation of the company’s objectives and the performance measures. The new technology or systems can be trained but carefully. The most important to develop in term of the warehouse need is the communication within the firm. All of the departments seem to work separately. It needs a union to work effectively. Therefore, training section for group communications is necessary.
4.3.2 Training Coach
The most important of training coach is experience and knowledge. As B&A Toy Warehouse needs to update the system, the coach must also know how to operate the new one fluently. On the other hand, the coach must also improve the communication to transfer different ideas to the trainees. Finally, the training must not only focus on the speed for the new staff to work but also concentrate on the quality and effectiveness of work.
Due to different problems confronted by the warehouse, it is necessary to set up a new strategy for reviewing systems processes and work methods at B&A Toy Warehouse.
There are some assumptions must be made to apply the new strategy. First, the firm must apply two processing systems strategy to be more effective. All information and system are update until present. Furthermore, the communication must be improved to have better understanding between different departments. Finally, there are enough staffs to carry the strategy to improve the performance. This means the absenteeism situation has been resolved.
First the warehouse must be rearranged and divided into two areas. One is the priority customer area and the other is normal customer. There will be two teams working in these divisions. There are two systems work simultaneously. One system have control all of the stocks and one system separates the stock for each division. In term of lack of stocks, these can request from other division and the other division must check whether the stocks are available. This must record in the system. All teams must have monthly report to the warehouse manager for better supervisions.
Managers have responsibility to inform the teams the organisational goals and objectives and regularly oversee and advise teams. Training sections must be supervised by the managers for further necessary aids. Survey or performance measures must be recorded as the reference for future implementation.
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