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Implement innovative processes

Submission details

Candidate’s name

Phone no.

Assessor’s name

Phone no.

Assessment site

Assessment date/s

Time/s

The Assessment Task is due on the date
specified by your assessor. Any variations to this arrangement must be approved
in writing by your assessor.

Submit this document with any required evidence attached.
See specifications below for details.

Performance objective

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

Assessment description

Based on part 1 of the case study provided, you will develop
an implementation plan to embed a new process. Based on part 2 of the case
study, 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:

a.
activities,
objectives, measures (KPIs), timeframes

b.
activities
to promote the process and sustainability

c.
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:

a.
evaluation
activities, regularly repeated over a suitable timeframe

b.
evaluation
activities to capture learnings from all work activities

c.
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 changes are required.

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 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:

Development costs

● Initial trial

$150,000

Implementation costs

● Re-tooling 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 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 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.


Develop
options for continuous improvement

Submission
details

Candidate’s name

Phone no.

Assessor’s name

Phone no.

Assessment site

Assessment date/s

Time/s

The Assessment Task is due on the
date specified by your assessor. Any variations to this arrangement must be
approved in writing by your assessor.

Submit this document with any required evidence
attached. See specifications below for details.

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:

a.
strategic goals

b.
description of proposed process or
amendment to current process

c.
brief explanation of how proposal
will improve performance and competitiveness

d.
KRAs,
KPIs, targets.

4.
Prepare to deliver a 20–30 minute management
team briefing and consultation session:

a.
distribute your proposed strategies
to team(team members may be other learners,
or other group approved by assessor)

b.
ask team to consider strategy,
including:

i.
pros and cons

ii.
changes or improvements to strategy

iii.
preparing to discuss changes or
improvements at team briefing and consultation session

c.
agree time for session (agree time
with assessor to ensure assessor can observe session).

5.
Lead session.

a.
discuss options and work through
group suggestions

b.
use creative techniques to generate
or develop ideas

c.
work through implications of
suggestions to trial them

d.
encourage group to point out issues
or potential problems during trailing

e.
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 (as 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
changes are required


briefing
and consultation session may be conducted using a video/teleconferencing tool.

Appendix 1 – 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

A. 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.

A. 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

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

Implement innovative processes.gif”>

Implement innovative processes.gif”>

Note: These flowcharts 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 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 put pressure on their parents to
buy, which they 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 turnover 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, hypercolor clothing and visual stimulation provided by the swinging
sixties.

Affects 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 was sufficient to continue trading as before.
The consequences of this short sightedness soon became apparent.

1961 (figures approximate)

L/Y
Sales

Actual
sales

Difference

Profit

$12.6 million

$11.5 million

($1.1 million)

$20,011.00

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 line to 307.


Changed
the focus from traditional boys toys to ranges for pre-school children, 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

Year

Sales

Difference
from previous year

Profit

1961

$11.5
million

($1.1
million)

$20,011.00

1962

$10.9
million

($600,000.00)

($281,000.00)

1963

$10.7
million

($200.000.00)

($5.7
million)

1964

$11.4
million

$700,000.00

($2.6
million)

1965

$14.9
million

$3.5
million

($2.9
million)

1966

$12.9
million

($2
million)

($12,872,000.00)

1967

A. C. Gilbert closed 1909–1967

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 over-priced – not value for
money nor attractive to the target market.

1964:


Jack
Wrather fired most of the top management team he hired two years previously.


Crisis
management lead to multiple changes and dramatic measures being taken and then
changed – often one measure contradicting the previous.


Jack
Wrather hires new CEO – Isaacson.


Isaacson
fires the entire sales team.


Isaacson
makes huge cutbacks in spending.


Sales
are 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.

● A. C. Gilbert had built its success
on personal service and building relationships – that was destroyed within 12
months.

● A. C. Gilbert Junior dies 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 Uncle 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.


Operating
on a skeleton workforce.


Due
to lack of staff, A. C. Gilbert is 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.

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