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BSBMGT608
Manage innovation and continuous improvement
Student Assessor
What is the purpose of this document?
The Student Pack is the document you, the student, needs to complete to demonstrate competency. This document includes the context and conditions of your assessment, the tasks to be completed by you and an outline of the evidence to be gathered.
The information includes the following:
· Information related to the unit of competency
· Guidelines and instructions to complete each task and activity
· A student evaluation form
Student Evaluation Form
These documents are designed after conducting thorough industry consultation. Students are encouraged to evaluate this document and provide constructive feedback to their training organisation if they feel that this document can be improved.
Link to other unit documents
· The Student Pack is a document for students to complete to demonstrate their competency. This document includes context and conditions of assessment, tasks to be administered to the student, and an outline of the evidence to be gathered from the student.
· The Unit Mapping is a document that contains information and comprehensive mapping with the training package requirements.
· The Unit Requirements is a document that contains information related to the unit of competency for the Training Organisation staff and students.
Document Usage
CAQA Resources
https://caqaresources.com.au/
Student Pack © 2019 CAQA Resources, CAQA and RTO Training Resources
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1. Student and trainer details
    Student details
    Full name:
    
    Student ID:
    
    Contact number:
    
    Email address:
    
    Trainer details
    Full name:
    
2. Qualification and unit of competency
    Qualification/Course/Program Details
    Code:
    
    Name:
    
    Unit of competency
    Code:
    BSBMGT608
    Name:
    Manage innovation and continuous improvement
    Releases:
    1.0
    Release date:
    25/March/2015
3. Assessment Submission Method
    ☐ By hand to trainer/assessor ☐ By email to trainer/assessor
☐ Online submission via Learning Management System (LMS)
☐ Any other method _________________________________________________
(Please describe here)
4. Student declaration
    · I have read and understood the information in the Unit Requirements prior to commencing this Student Pack
· I certify that the work submitted for this assessment pack is my own. I have clearly referenced any sources used in my submission. I understand that a false declaration is a form of malpractice;
· I have kept a copy of this Student Pack and all relevant notes, attachments, and reference material that I used in the production of this Student Pack;
· For the purposes of assessment, I give the trainer/assessor permission to:
· Reproduce this assessment and provide a copy to another member of staff; and
· Take steps to authenticate the assessment, including communicating a copy of this assessment to a plagiarism checking service (which may retain a copy of the assessment on its database for future plagiarism checking).
Student signature: ________________________________

Date: ____/_____/______________
5. Assessment Plan

    The student must be assessed as satisfactory in each of the following assessment methods in order to demonstrate competence in a variety of ways.
    Evidence number/ Task number
    Assessment method/ Type of evidence/ Task name
    Sufficient evidence recorded/Outcome
    Assessment task 1
    Knowledge Test (KT)
    S / NS (First Attempt)
S / NS (Second Attempt)
    Assessment task 2
    Project (PT)
    S / NS (First Attempt)
S / NS (Second Attempt)
    Assessment task 3
    Project (PT)
    S / NS (First Attempt)
S / NS (Second Attempt)
    Assessment task 4
    Skills Test (ST)
    S / NS (First Attempt)
S / NS (Second Attempt)
    Outcome
    C ☐ NYC ☐

    Date assessed:
    Trainer signature:
6. Completion of the Assessment Plan
    Your trainer is required to fill out the Assessment Plan Outcome records above, when:
· You have completed and submitted all the requirements for the assessment tasks for this cluster or unit of competency.
· Your work has been reviewed and assessed by your trainer/assessor.
· You have been assessed as either satisfactory or unsatisfactory for each assessment task within the unit of competency.
· You have been provided with relevant and detailed feedback.
Every assessment has a “Feedback to Student” section used to record the following information. Your trainer/assessor must also ensure that all sections are filled in appropriately, such as:
· Result of Assessment (satisfactory or unsatisfactory)
· Student name, signature and date
· Assessor name, signature and date
· Relevant and detailed feedback
7. Unit Requirements
    You, the student, must read and understand all of the information in the Unit Requirements before completing the Student Pack. If you have any questions regarding the information, see your trainer/assessor for further information and clarification.
Pre-Assessment Checklist: Task 1 - Knowledge Test
    The purpose of this checklist
    The pre-assessment checklist helps students determine if they are ready for assessment. The trainer/assessor must review the checklist with the student before the student attempts the assessment task. If any items of the checklist are incomplete or not clear to the student, the trainer/assessor must provide relevant information to the student to ensure they understand the requirements of the assessment task. The student must ensure they are ready for the assessment task before undertaking it.
    Section 1: Information for Students
    ☐ Make sure you have completed the necessary prior learning before attempting this assessment.
☐ Make sure your trainer/assessor clearly explained the assessment process and tasks to be completed.
☐ Make sure you understand what evidence is required to be collected and how.
☐ Make sure you know your rights and the Complaints and Appeal process.
☐ Make sure you discuss any special needs or reasonable adjustments to be considered during the assessment (refer to the Reasonable Adjustments Strategy Matrix - Appendix A and negotiate these with your trainer/assessor).
☐ Make sure that you have access to a computer and the internet (if you prefer to type the answers).
☐ Make sure that you have all the required resources needed to complete this assessment task.
☐ The due date of this assessment task is in accordance with your timetable.
☐ In exceptional (compelling and compassionate) circumstances, an extension to submit an assessment can be granted by the trainer/assessor. Evidence of the compelling and compassionate circumstances must be provided together with your request for an extension to submit your assessment work.
☐ The request for an extension to submit your assessment work must be made before the due date.
    Section 2: Reasonable adjustments
    I confirm that I have reviewed the Reasonable Adjustments guidelines and criteria as provided in Appendix A and attached relevant evidence as required and select the correct checkbox.
☐ I do require reasonable adjustment
☐ I do not require reasonable adjustment
    Declaration (Student to complete)
☐ I confirm that the purpose and procedure of this assessment task has been clearly explained to me.
☐ I confirm that I have been consulted about any special needs I might have in relation to the assessment process.
☐ I confirm that the criteria used for this assessment has been discussed with me, as have the consequences and possible outcomes of this assessment.
☐ I confirm I have accessed and understand the assessment information as provided in the Training Organisation’s Student Handbook.
☐ I confirm I have been given fair notice of the date, time, venue and/or other arrangements for this assessment.
☐ I confirm that I am ready for assessment.
Student Name: ______________________________________
Student Signature: ___________________________________ 
Assessment method-based instructions and guidelines: Knowledge Test
    Assessment type
    
· Written Questions
    Instructions provided to the student:
    Assessment task description:
    · This is the first (1) assessment task you must successfully complete to be deemed competent in this unit of competency.
· The Knowledge Test is comprised of fourteen (14) written questions
· You must respond to all questions and submit them to your Trainer/Assessor.
· You must answer all questions to the required level, e.g. provide an answer within the required word limit, to be deemed satisfactory in this task
· You will receive your feedback within two (2) weeks, and you will be notified by your Trainer/Assessor when your results are available.
    Applicable conditions:
    · All knowledge tests are untimed and are conducted as open book assessment (this means you can refer to your textbook during the test).
· You must read and respond to all questions.
· You may handwrite/use a computer to answer the questions.
· You must complete the task independently.
· No marks or grades are allocated for this assessment task. The outcome of the task will be Satisfactory or Not Satisfactory.
· As you complete this assessment task, you are predominately demonstrating your written skills and knowledge to your trainer/assessor.
    Resubmissions and reattempts:
    · Where a student’s answers are deemed not satisfactory after the first attempt, a resubmission attempt will be allowed.
· The student may speak to their trainer/assessor if they have any difficulty in completing this task and require reasonable adjustments.
· For more information, please refer to the Training Organisation’s Student Handbook.
    Location:
    · This assessment task may be completed in:
☐ a classroom
☐ learning management system (i.e. Moodle),
☐ workplace,
☐ or an independent learning environment.
· Your trainer/assessor will provide you with further information regarding the location for completing this assessment task.
    Instructions for answering the written questions:
    · Complete a written assessment consisting of a series of questions.
· You will be required to answer all the questions correctly.
· Do not start answering questions without understanding what is required. Read the questions carefully and critically analyse them for a few seconds; this will help you to identify what information is needed in the answer.
· Your answers must demonstrate an understanding and application of the relevant concepts and critical thinking.
· Be concise, to the point and write answers within the word-limit given to each question. Do not provide irrelevant information. Remember, quantity is not quality.
· You must write your responses in your own words.
· Use non-discriminatory language. The language used should not devalue, demean, or exclude individuals or groups based on attributes such as gender, disability, culture, race, religion, sexual preference or age. Gender-inclusive language should be used.
· When you quote, paraphrase, summarise or copy information from other sources to write your answers or research your work, always acknowledge the source.
     Purpose of the assessment
    This assessment task is designed to evaluate student’s knowledge essential to manage innovation and continuous improvement in a range of contexts and industry settings & Knowledge regarding the following:
· Knowledge to establish, monitor and evaluate strategies on key systems and processes for performance and sustainability and detailed analysis on supply chains and operations, product and service delivery systems.
· Knowledge to identify, analyse and evaluate the effectiveness of performance measures, performance reports and variances from organisational plans for key result areas, assessment tools and techniques, changing trends and opportunities.
· Knowledge to identify opportunities related to technology and electronic commerce while consulting the specialists appropriately.
· Knowledge of developing continuous improvement strategies and innovation to promote competition and supporting organisational learnings by promoting interactions within and between workgroups to nurture the creative climate.
· Written knowledge on encouraging, recognizing and testing new ideas, accepting failure ideas during trials, recognise, celebrate and implementation of the successful ones into the systems.
· Knowledge to test approved option or ideas’ cost-benefit analysis and risk management and innovations approval based on organisational processes.
· Knowledge on ensuring implementation management for plans on communication, objectives, timeframes, measures and transition plans addressing the impact of change and its consequences on people to promote continuous improvement and sustainability.
· Knowledge on implementing contingency plan in case of non-performance followed by prompt failure investigation and cause analysis, managing challenges and opportunities effectively and making sure the lessons learnt from the activities are documented for future work.
    Task instructions
    · This is an individual assessment.
· To ensure your responses are satisfactory, consult a range of learning resources and other information such as handouts, textbooks, learner resources etc.
· To be assessed as Satisfactory in this assessment task, all questions must be answered correctly.
Assessment Task 1: Knowledge Test
Provide your response to each question in the box below.
    Q1:
    Answer the following:
a) What are “organisational systems”? Write your answer in 30 -50 words.
b) What are “organisational processes”? Write your answer in 30-50 words.
c) List four (4) steps involved in the monitoring process of operational plans.
d) List five (5) elements that are essential for any effective monitoring system.
e) Why is it necessary to monitor and evaluate plans and strategies? Write your answer in 50-100 words
    Satisfactory response
    
    
    Yes ☐
    No ☐
    
Organisational System is the structure of how the organisation functions and the basis of this functioning. This defines how the departments and the hierarchy work from employee interaction, to interaction with the supervisors and how the communication flows throughout the organisation.
Organisational processes are defined in terms of a set of outcomes. The processes describe the various activities one must engage in, to accomplish these outcomes. The processes encapsulate and inform the organization of must occur in order for that goal to be achieved and targets to be met.
The four steps involved in monitoring process of operational plans are
· The first step is to compare the performance of the organisation to the performance that was planned
· Then document what was the difference between the planned process and the processes that actually occurred.
· Then the reasons are found out for the difference between what should have happened and what happened.
· The last step is to brainstorm actions or strategies that improve the performance and change the operational plan in place according to the updates needed.
The five elements that are essential in order for the monitoring system to be effective are
· A well-defined monitoring framework
· Design an event management foundation in order to deal with any process that might occur.
· A service design approach to monitoring process
· Planning and executing a continuous progress program
· Establish a structure to monitor the process
The necessity to monitor and evaluate plans and strategies is to be proactive. The management needs to stay proactive in order to ensure smooth functioning in the company. The company by evaluating and monitoring the processing are able to identify errors or problems in the process. This proactive approach saves the company time and resources. The idea of catching mistakes in the first few stages allows the organisation to go back and change them before the error that can cost them significantly. This is why it is important for management to stay ahead of the curve and ensure there is no error.
    Q2:
    Answer the following:
a) What are the supply chains? Write your answer in 30-50 words.
b) What is the purpose of undertaking analysis of supply chains, and operational, product and service delivery systems? Write your answer in 50-100 words.
    Satisfactory response
    
    
    Yes ☐
    No ☐
    
Supply Chains are the entire process of the product from it’s manufacture till it reaches the consumers. This includes the supplying of raw material, storage of raw material, the process raw material undergoes to become the product, the finished product being sent to the warehouse and then to the consumer.
The purpose of undertaking the analysis of supply chains, operational processes, the product and the service delivery systems can be due to two things. One thing can help the organisation improve these processes and if any extra steps can be removed to make it efficient. Some of these processes can be automated and the efficiency can be increased. The second perspective is to understand the processes that go into making the product and the cost versus the cost that is made by the product and whether it is beneficial for the company to continue with the process.
    Q3:
    Answer the following:
a.    List five (5) key components of an effective performance measurements system.
b.    Explain the following assessment tools and techniques used to review and evaluate innovation processes:
1.    Cause and effect diagram (50-100 words)
2.    Control chart (30-50 words)
    Satisfactory response
    
    
    Yes ☐
    No ☐
    
The five components of an effective performance measurements system are
· Goal Planning
· Feedback Opportunities
· Timeline and schedule
· Assigned Tasks
· Monitoring processes
A Cause-Effect Diagram can be described as a tool that organises visually the possible causes and the effect. The causes of the problem and what effect they have are displayed in a visual format with attention to detail. The most common type of cause and effect diagram is the fishbone or Ishikawa diagram.
The control chart is a type of graph used to understand how a process changes over time. The data is plotted over a time order. This chart always has a line in the middle for the average, upper line for the upper control limit and a lower line for lower control limit. This chart is based on historical data.
    Q4:
    Explain in 30-50 words each, the purpose of analysing the following performance reports for key result areas of the organisation:
i. Budget/cost variance reports
ii. Financial reports
iii. Quality reports
    Satisfactory response
    
    
    Yes ☐
    No ☐
    i. Budget/Cost Variance Reports
A variance report is a document that compares the financial outcome that was planned with the actual financial outcome of the company. This report helps to understand what happened and why the disparity occurred if any.
ii. Financial Reports
Financial Reports helps to provide a glimpse into the organisation’s financial position. It sheds light on the organisation’s performance, operations and cash flow. The statements give government organisations and other stakeholders a glimpse into their revenue, expenses, profitability and debt.
iii. Quality Reports
Quality Reports is a report that records the quality process or the outcome. It contains inspection test plans, quality communications and non-conformance reports. These reports help to understand the quality of the products and the quality of the processes. This is a performance measure system.
    Q5:
    Answer the following questions:
a. What is trend analysis, and how can it help to improve the business? Write your answer in 100-150 words
b. Identify five (5) trends a business can analyse.
c. How is a trend analysis developed and explain the three (3) stages of trend analysis? Write your answer in 100-150 words.
    Satisfactory response
    
    
    Yes ☐
    No ☐
    a.
Trend Analysis is a technique used in order to predict future stock price movements based on recently observed trend data. This is based on the concept that the past trends can give stakeholders an idea of what will happen in the future. The analysis of trends helps the organization to understand the areas that the organisation has to focus on. This will give it insight into what areas the organisation excels in and what areas they need to improve on. It provides valuable evidence to make sure future decisions can be made depending on the evidence and the long-term strategy can be well planned and have backups to ensure the progress of the business.
b.
The five trends that a business can analyse:
· Sales
· Cash flow
· Speed of Stock Turnover
· Staff Numbers
· Performance of Staff
c.
Trend Analysis is a system that is developed based on the business’s performance over a span of time. The outcomes of the organisation and the processes over the years when compared and it can lead to trends emerging from this comparison. This data helps to build strategies and business decisions.
1. The preparation of analysis: This helps to determine what data of the organisation will be analysed. The trends that will emerge will be based on this data that was chosen
2. The application of a threshold: The level at which the variation occurs that is important enough to take note. The threshold will determine whether there is a trend, which should be highlighted.
3. The conducting cause analysis: This is when the organisation dives into the factors, which caused this trend. This cause is seen as something that needs to analyse in order to base future planning and decision-making.
    Q6:
    Based on the different digital specialists listed below, what advice can they provide you to identify technology and electronic commerce opportunities? Write your answer in 40-60 words for each
    Satisfactory response
    
    
    Yes ☐
    No ☐
    
    Digital specialists
    Advice (40-60 words for each)
    Information technology consultants
    IT consultants can help to locate cost effective strategies to rely on IT systems for business operations. They will be able to support and guide the employees into how the systems can be used. This will save costs for the organisation.
    SSEO experts
    An SEO expert can tell the organisation the way they can make sure their website is found. They can promote keywords that help to highlight the organisation and increase brand awareness.
    Digital Market Specialists marketing specialists
    The specialists plan the campaigns that can help to market the organisation. They can tell the organisation what content and channels should be used to increase the sales of the organisation. They use online platforms to promote their organisation.
    eCommerce Consultant
    The ecommerce consultant is responsible to analyse the business. According to this analysis, they can plan, market the organisation to online consumers and track the progress for the organisation and the way, to adjust the plan as the organisation changes or the market changes.
    Q7:
    Develop options for continuous improvement
Read the case study and answer the following questions:
Monica is a sales manager at a large pharmaceutical company. The fiscal year will end in one week. She is overwhelmed with end-of-the-year tasks including reviewing the budget she is likely to get for next year, responding to phone calls of customers, and supervising a group of 10 salespeople. It’s a very hectic time, probably the most hectic time of the year.
She receives a phone call from the HR Department: ‘Monica, we have not received your performance reviews for your 10 employees; they are due by the end of the fiscal year.’ Monica thinks ‘Oh, those performance reviews… What a waste of my time!’ From Monica’s point of view, there is no value in filling out those meaningless forms. She does not see her subordinates in action because they are in the field, visiting customers most of the time.
All she knows about their performance is based on sales figures, which depend more on the products offered and geographic territory covered than the effort and motivation of each salesperson. And nothing happens in terms of rewards regardless of her ratings. These are lean times in her organisation, and salary adjustments are based on seniority rather than merit.
HR Department has suggested completing the work through the new, enhanced online system “real-track” where she can provide comments, feedback and “real” performance appraisals. This system can be very useful to the HR Department for tracking and monitoring performances and continuous improvement. Monica denied the request as she found the system to be “too difficult”. She though agreed to fill the forms, manually.
She has less than 3 days to turn in her forms. What is she going to do? She decides to go down the path of least resistance: to please her employees; she gives everyone the maximum possible rating. In this way, she believes they will be happy with their ratings, and Monica will not have to deal with complaints or follow-up meetings. Monica fills out the forms in less than 20 minutes and gets back to her ‘real job’.
A number of her staff and management feel “Monica” did not follow the required protocols or use the “Real-track” system, and she should be given an official warning letter. The HR Department though disagreed and is happy that she has completed the forms and handed them in for processing. Finally, this matter has reached you. As the CEO, you must make some decisions as you found this to be against organisation’s protocols, values and policies. You have done some research and found the same issue with a number of Monica’s colleagues as well.
You sat with all staff and relevant groups and discussed the matter. You provided the reasons why this should stop from this point, and all appreciated your honest yet approachable behaviour. You have also advised everyone to try the “Real-track” system and provide constructive feedback to the technical and management team in next two days.
    Satisfactory response
    
    
    Yes ☐
    No ☐
    
7.1. Why should you brief groups on performance improvement strategies and innovation as an essential element of competition in the business world? Answer in 100-150 words.
The group should understand that the review of their work would help the employees understand where they can improve. Employees are given a self-reflection about their skills and the areas to improve. This leads to helping the task force constantly improve. This constant self-reflection and evaluation helps the company to be able to compete with other companies. This encourages employees to be efficient and it even helps to give them challenging tasks that will motivate employees and engage in the job. The motivation of employees encourages employees to be more creative with solutions and affect the innovation of the organisation.
7.2. Answer the following:
a. What is your understanding of “creative climate” and “organisational learning” according to the above-mentioned case study? Answer in 40-60 words.
The creative climate is where new solutions can be collaborated on and come up with. The climate should be conducive for the employees to come up with solutions. Organisational Learning; is when the HR system told the employees how to conduct the evaluation. This is the process, by which the employees are able to learn about the processes in the organisation.
b. By promoting interaction within and between workgroups how do we foster a creative climate and organisational learning environments? Answer in 50-100 words.
The organisation should have a creative climate in order to encourage work groups to work together. Organisational Learning happens best through team interaction and collaboration. Organisational Learning occurs better in an environment where it is encouraged for employees to be expressive. This environment allows employees to be vocal about their inputs and outcomes. It fosters a helpful environment where other employees can help employees to improve or if they are lacking, they can provide them support.
7.3. Answer the following:
a. What are ten (10) ways that Monica should encourage and recognise new ideas and entrepreneurial behaviour?
The ten ways to encourage and recognise new ideas and entrepreneurial behaviours
i. Give creative ideas and try to lead by example
ii. Understand the barriers in place that’s not letting employees come up with innovative solutions
iii. Create the right climate that encourages employees to share their ideas and engage in creative solutions
iv. Establish a process in place in order to report ideas
v. Provide employees with the tools to communicate and innovate
vi. Have an allotted time for innovation
vii. Encourage employees to think outside the box
viii. Listen to the employees and their views
ix. Encourage employees to work together and shadow each other to understand various jobs in the organisation
x. Praise employees for their ideas
b. How can these ideas be tested to determine success, rather than ignoring them? Write your answer in 100-150 words

The ideas can be evaluated through group meetings. The ideas can be anonymously written on the board. The ideas are then evaluated by the employees. Then the ideas are ranked from one to ten. They are criticised by various dimensions set out depending on the scenarios that the employees have given ideas based on. The ideas are then ranked and the top 5 can be chosen. Then each idea is discussed in detail, the pros and cons understood, the tasks that need to be invested in it discussed and the resources required highlighted. All this discussion will help employers understand if the idea is worth pursuing, the feasibility and the ways, it will affect the organizational outcomes.
7.4. Monica and her colleagues did not test the system fairly. Comment on this statement in 50-100 words.
The system was not tested properly as Monica and her colleagues rated their employees at the maximum rating. They were not objective and rated everyone at the same level. They did not evaluate the employees according to their skills. This is why the system was not able to analyse the organisation’s employees and try to understand how to improve the organisation’s workforce.
7.5. Why is it important to accept the failure of ideas during the training process and recognise, celebrate and embed successful ideas into the organisation's processes? Write your answer in 50-100 words
The failure of ideas is equally important to the successful ideas as it helps to give the organisation clarity. It helps to put perspective on what works and what does not work. The failed ideas help to improve the successful ideas. It also helps to highlight why the successful idea worked
7.6. For every idea approved for the trail, why should undertake a risk management and cost-benefit analysis? Answer in 50 -100 words
The idea when being implemented can be a success or a failure for the organisation. The organization should be ready for any risks that come along with the idea implementation. The organisation should also weigh the costs and benefits of the idea to see if it is worth the implementation. The risk management helps to understand the risks that come with the implementation and how to deal with it when it arises.
7.7. Why is it important that innovations be approved through organisational processes? Write your answer in 100-150 words.
The organisational processes approving the innovations help to standardise the processes. This also creates a creative climate. This helps employees to become more innovative, productive and execute new processes. The employees are empowered through the innovation and it helps them to improve their work processes. It also helps employees have a sense of autonomy in the creative process and it helps the employee be aware of what must be done in case of a creative idea. It also ensures that the scouting of ideas is fair and allows the merit of idea to be the reason for its implementation. This process negates the concept of ideas being accepted due to the employee rather than the merit of the idea.
    Q8:
    Read the case study “Implement innovative processes” and answer the following questions.
Implement innovative processes
Several years ago, we realised that there was no consistency in how we were handling basic processes. Everybody did something different; we had very few processes that were written down. We made money, but as we grew, the errors were killing us. So [company president and CEO] Suzette [Racine] and I realised we needed to do something.
We identified a handful of processes that were done five different ways by five different people. We had a meeting with each department: office staff, inside sales, outside sales, receiving, and so on. We started each meeting by documenting what we were doing and then had roundtable discussions to decide what we thought was the correct way. We went back and forth, adding steps we’d missed, taking out unnecessary steps, making improvements. We did that for every major process. And here’s the scary part: once we started digging, we found 20–25 problems we didn’t know existed.
We were very fortunate to have other PDTA [Power Transmission Distributors Association] members who had very successful quality programs and were willing to share their experiences with us. We looked at their quality manuals and realised everything we were missing. We didn’t even have a mission statement.
Since then, we have created a quality manual. Everyone has their own copy, and the master copy sits on my desk. If there’s a question on how to do anything, anyone can refer to it. It is very comprehensive; I literally could take a person off the street and put him in front of one of our computer terminals and the procedure would walk him through how to process an order, from booting up all the way to entering the order.
We have three branches and 30 employees, and all of them work off the same manual. It’s not something that sits on a shelf and gathers dust; it truly is a critical part of how we do business.
At first, it was difficult because everyone was so used to doing it their own way. Having to refer to the manual slowed employees down a bit. It used to take them about a minute to enter an order, but when we introduced the new process, it might take two or three minutes since they had to look up the correct way to do it. But within a month or so, it took less than a minute and everyone was doing it the same — they couldn’t even remember how they used to do it.
Many people seem to think of quality systems as a big company thing, but we are small in the scheme of things, and we’ve seen tremendous returns. We have experienced savings on total operating costs of over five per cent and reduced our internal error rate by over 90 per cent.
We have dramatically reduced errors by adding in checks and balances to eliminate problems in receiving, phone orders; you name it. Now, 99 per cent of our returns are due to customer errors, not ours.
Anything that is processed through the computer goes back to the originator and checked. The originator sends it to the warehouse; the warehouse people pull the order. Someone else checks the stockman’s work to make sure he pulled the right stuff. The packer checks it as it goes into the box. In the end, there are four checks before it leaves the building, and each one is documented.
Before, one person would grab the paperwork, pack the order and ship it without even looking at it. They assumed everything was fine, but our return rate was through the roof. When you think that every return costs about twice what it costs to bill it, fewer returns add up to big savings.
The checks and balances for materials we receive from the manufacturer are as stringent as those for the product going out to customers. We have got a much better handle on purchasing and receiving.
We used to have situations where the computer would show we had five of something in inventory, but there were only two on the shelf. Now, we have a process that allows us to track every item from check-in at receiving until it goes back out the door.
Incoming product is put in the correct spot in the warehouse every time. It is double-checked before it goes into inventory. People are human, and errors still occur, but now when something was put away in the wrong spot, we can find the missing piece in minutes and correct the error.
Quality systems have to be part of a commitment to continuous improvement. When we first...