Brandon Benedick A Philip BSBMGT516 FACILITATE CONTINUOS IMPROVEMENT

493100

ASSESTMENT 1

1. REVIEW AUSTRALIAN HARDWARE DOCUMENTATION.

The Business
Business details/history: Australian Hardware opened its first store under the name of Percy's
Home Goods in George St Sydney in 1921. Percy's Home Goods initially specialized in the
manufacturing and sale of small household furniture. In 1982 Australian Hardware was listed on
the Australian Stock Exchange and was offered to the public in a share float. The business has
continued to expand to now have 138 stores and approximately 10,000 staff across the country.

Ownership and governance

The Greenwright family retains a controlling interest in Australian Hardware. Holden
Greenwright serves as both chair of the board of directors and CEO.

Products
Australian Hardware supplies products in the following categories to general and trade
customers:

 Timber
 Hardware
 Tools
 Paint
 Housewares
 Outdoor
 Garden

The Market
The target market has been divided into three target markets or segments:
a) Home improvers
b) DYIs
c) Tradespersons.

Marketing Strategy
Australian Hardware takes a two-pronged strategic approach characterized by product and
service differentiation along with select-targeted marketing activities.

The Future
Mission Statement: Australian Hardware provides the best quality hardware, homewares, garden
supplies and building materials from Australia and the world. Australian Hardware is committed
to providing customers and tradespeople with value through everyday low prices, product
quality, expert service, community engagement and environmental responsibility.

Vision Statement: Within five years, Australian Hardware will lead the hardware and home-
improvement market in Australia.
Brandon Benedick A Philip BSBMGT516 FACILITATE CONTINUOS IMPROVEMENT
493100

Strategic Direction
The Australian Hardware strategic directions are:
 Increase sales revenue and gross profit
 Maintain or increase market share
 Control direct and indirect operational costs
 Maintain superior product and service quality standards
 Establish Australian Hardware’s reputation as a socially and environmentally responsible
company.

Locations
Australian hardware is headquartered in Sydney, NSW. Australian Hardware stores are located
around Australia in the major cities and in the larger regional centres. In areas experiencing
growth in population and significant growth in residential building, the demand for products sold
by Australian Hardware is considered likely to grow. These areas are targeted by Australian
Hardware for either expansion of any existing stores or the building of a new store if none exists.
Brandon Benedick A Philip BSBMGT516 FACILITATE CONTINUOS IMPROVEMENT
493100

2. RESEARCH, REVIEW AND IDENTIFY CONTINUOS IMPROVEMENT

STRATEGIES/METHODOLOGIES

Research or review continuous improvement methodologies and tools and identify strategies for
improving quality and performance in ‘Operational Costs’.

a) A continuous improvement methodology

Lean Manufacturing combines five systems in one:

 Inventory control
 Set-up improvement
 Maintenance improvement
 Productivity improvement
 Quality improvement

Accordingly, a key focus of Lean Manufacturing is the reduction of ‘Seven Wastes’.

Specifically:

 Over-production
 Waiting or wasted
 Transportation
 Inventory
 Processing inefficiency
 Motion
 Defects

For Australian Hardware, the first and biggest hurdle is to reevaluate what they view as waste.
Typically, in Australian Hardware, waste is the label given to leftover scraps or unusable or
defective products. While these are two of the areas of waste identified in a lean system, the idea
of waste encompasses is needed to be recognized.

The way to readjust the perception of waste is to focus on the specific steps that can be
implemented to achieve a lean system. These steps typically are:

i. Design a Simple Manufacturing System

This decreases the amount of inventory Australian Hardware need to keep on
hand, increases productivity since workers are not juggling more product than they need
and increases process efficiency. If we can’t design a new one from scratch, we can also
reassess our current system to make it simpler.

ii. Room for Improvement

Remember that anything that doesn’t add value to the customer. The product
should not be labeled as waste and be eliminated or reduced. Chances are that there are
always steps in the process that can be eliminated to reduce waste.
Brandon Benedick A Philip BSBMGT516 FACILITATE CONTINUOS IMPROVEMENT
493100

iii. Improve the System Continuously

A mindset that values continuous improvement and innovation is essential to
making the lean system work. By constantly evaluating and reevaluating internal and
external processes and procedures, Australian Hardware can make large and small
improvements in a variety of ways that will ultimately impact our bottom line.

Implementing the Five S’s

The next step of implementation involves the 5S system. These are five specific areas that
effectively prep Australian Hardware for the changes it’s getting ready to make, each of which
makes lean implementation easier to do. The 5S methodology consists of:

Name Translation Description

Getting rid of clutter in the workplace, ensuring you
1. Seiri Clearing
only keep what’s truly necessary.
Organizing your remaining tools and materials in the
2. Seiton Organizing order of what you use most often. Make them easy to
access.
3. Seiso Cleaning Cleaning working environment and machines clean.
Integrating steps into process that will force you to keep
4. Seiketsu Standardization
things cleared, organized and cleaned.
Training must be conducted at every level of the
5. Shitsuke Training
organization for smooth implementation.

Next, it is important to train all members of Australian Hardware in the principles of lean to
ensure a successful implementation. Just as with any new process, all staffs must be willing to
commit to a new way of doing things. This is especially important for upper management.
Managers lead by example and need to understand the changes being made in order to anticipate
any problems.

b) Problem/opportunity identification and decision-making tools

Fishbone (Ishikawa) Diagram

The fishbone diagram identifies many possible causes for an effect or problem. It can be used to
structure a brainstorming session. It immediately sorts ideas into useful categories. A Fishbone
Diagram is used when:
 Identifying possible causes for a problem
 A team’s thinking tends to fall into ruts

Fishbone Diagram Procedure includes:

 Agree on a problem statement (effect). Write it at the center right of the flipchart or
whiteboard. Draw a box around it and draw a horizontal arrow running to it.
 Brainstorm the major categories of causes of the problem. If this is difficult use generic
headings:
Brandon Benedick A Philip BSBMGT516 FACILITATE CONTINUOS IMPROVEMENT
493100

i. Methods
ii. Machines (equipment)
iii. People (manpower)
iv. Materials
v. Environment

Using the fishbone diagram, each point had been discussed with the participants and their further
point of view had been taken in order to finalise the root causes and the potential problems were
required to be addressed in order to reduce the excessive use of water. These potential areas of
problems had been further considered to develop solutions and projects.

c) Strategies for including and encouraging participation by the right individuals and
teams

Australian Hardware develops strategies for participation with these two levels that are
Interpersonal skills and participative culture.
Interpersonal skills include communicating verbally and non-verbally, active listening, team
problem solving, negotiating, advocating and asserting values and group decision-making.
Building participative culture includes secure management commitment and value, measure and
reward participation.
Brandon Benedick A Philip BSBMGT516 FACILITATE CONTINUOS IMPROVEMENT
493100

d) Strategies for building ownership and a work culture that is conducive to improve
quality, reducing waste and high performance

In order to encourage participation, Australian Hardware implement reward and recognition

programs as they have been shown to increase employee participation in improvement
initiatives. Most of the research in this area has shown that employees are happiest
when they are recognised by their managers for doing a good job. While this may not be
surprising, what is of significance is that managers are often so busy they forget to fulfil this
need for recognition.

Recognition and incentives will depend on the size and nature of the organisation. It can range
from articles in a newsletter, announcements at staff meetings, gifts such as wine and food, leave
and movie tickets, to incentive programs offering holidays. Use your innovation skills to think of
new ways to reward your team members. You might even ask staff to suggest ideas. In making
employee recognition programs more effective, managers need to make sure:
 Appropriate rewards offered
 Reward employees in a timely manner
 Reward ties in with the person’s results.

 
Brandon Benedick A Philip BSBMGT516 FACILITATE CONTINUOS IMPROVEMENT
493100

3. ANALYZE THE IMPACT OF THE PROPOSED INTRODUCTION ON THE

ORGANIZATION

a) Communications to various stakeholders

In its simplest form, a stakeholder communications plan outlines who you need to communicate
with, about what, how you’re going to do it, and how often. There are also a few important
considerations such as timing and budget.

An effective stakeholder communications plan will:

 Support your organization in achieving its stated goals and objectives
 Support or improve your operational effectiveness
 Support or improve your relationships with those who are important to ensuring your
success (often called key stakeholders or your target audience)
 Deliver measurable results to your organization.
 It is primarily a public relations plan (including media relations) though it may
include some wider communication tools such as advertising and direct marketing
where these supports your stakeholder communication objectives.

b) Knowledge management and information flow, including information technology

relevant to document storage and sharing

The plan-do-check-act cycle of continuous improvement involves the regular updating of

strategic plans to accommodate any identified improved process. Once an improvement has been
identified, it needs to be incorporated into appropriate planning documents such as the
organization’s business plan, the team’s strategic objectives and an individual’s work plan.

The business or strategic plan will document the improvement from an organizational
perspective, describing how the improvement will help the organization meet its strategic
objectives by improving productivity, quality, reduced costs etc., providing strategies to achieve
the goals and allocating sufficient funds in the budget to ensure its effective implementation.

An identified improvement must then be incorporated into the team’s operational plan which
outlines the rationale of the new process or improvement, allocates human, physical and time
resources and provides strategies for monitoring and review. Finally, the tasks and activities that
will help to implement the improvement are documented into each team member’s performance
or work plan, outlining responsibilities, available resources, a timeline and performance
measures.
Brandon Benedick A Philip BSBMGT516 FACILITATE CONTINUOS IMPROVEMENT
493100

c) Sustainability and sustainability objectives

A first step for many organizations to reduce the impact of their operations on the environment is
to develop sustainability policies and procedures that help them to comply with national and
international environmental legislation; reduce waste; encourage efficiency of water, electricity
and paper usage; purchase green products that are less damaging to the environment; motivate
staff; and encourage commitment from the whole organization.

Sustainability must now be considered a crucial part of any continuous improvement process.
When considering any changes, organizations should refer to their sustainability policy to ensure
that all improvement processes meet sustainability requirements.

Sustainability initiatives will depend on the size and type of the organization, the industry and
the change being implemented. The following is a comprehensive list of requirements that
should be addressed where applicable. Many of these should be considered holistically as they
all interrelate to reduce the organization’s ecological footprint; for example, a green office
program should incorporate all aspects of sustainability such as green purchasing, strategies to
reduce gas emissions, waste management processes and the use of non- renewable resources to
improve organizational resource and energy efficiency.

Sustainability requirements include:

 Regulations and social responsibility
 Environmental and resource sustainability initiatives
 Waste management
 Waste treatment
 Ecological footprint
 Environmental management systems.

d) Performance management, including setting goals and KPIs, monitoring, training and
coaching, and rewards and recognition

KRA: Operational costs

KPI: Reduce operational costs by 10%

Measurement: Reduce cost over 6 months period

Monitoring: Operational expense report

Training: Deliver training using flexible delivery methods such as online self-paced learning and
an internet classroom link. Training may be provided in the workplace or at an appropriate
alternative environment.
Brandon Benedick A Philip BSBMGT516 FACILITATE CONTINUOS IMPROVEMENT
493100

Rewards:
Effective appraisal involves taking a number of steps:
 deciding what it is that you are appraising;
 choosing the best information source for appraisal - who should appraise;
 deciding on a structure for the appraisal;
 being aware of the problems; and,
 carrying out the appraisal.
Brandon Benedick A Philip BSBMGT516 FACILITATE CONTINUOS IMPROVEMENT
493100

4. PORTFOLIO OF WORK - COMMUNICATION STRATEGY

Communication objective: Inform management and employees of responsibilities with respect to
the new continuous improvement methodology; promote employee buy-in for change initiative.
Audience Message Tactics: media, Resource/Budget Person response
approach
Wollongong Training Email, face to face HR
management opportunities presentation to
team and relevant enable managers to
procedures raise
implementation
issues and reporting
concerns.

All employees Goals of the Promotional video $20,000 Continuous

of Australian organization featuring senior improvement
Hardware and the details management team council
of CI system to build buy-in and
underscore
management
commitment to
Lean, methods and
facility tool.

Customer Training Team meetings with Team leaders

service and opportunities supervisors to and supervisors
sales staff and relevant integrate continuous
procedures; improvement with
normal team and
performance
management
practices.
Brandon Benedick A Philip BSBMGT516 FACILITATE CONTINUOS IMPROVEMENT
493100

5. AUSTRALIAN HARDWARE MONITORING STRATEGY

Objective/ Metric Timeline Target Data collection
Outcome/ methods
Activity/ Task
Improve Water usage in To be 7% reduction; Monthly resource usage
resource usage litters; confirmed 9% reduction report
efficiency Electricity from last
usage in KW/h year’s records

Improve Carbon 3 tonnes / 7% reduction Accounting data

sustainability Dioxide $100,000 sales
emissions in revenue
tonnes;
$100,000 sales

Delivery time In minutes / To be 7% reduction Delivery records

10km confirmed
from last
year’s records

Improve Customer 70% 80% Customer survey

customer satisfaction
service rating