ASSESSMENT TASK 3 (AT3) CASE STUDY

PROCEDURE

1. Review the case study ‘B&A Toy Warehouse’ provided (kindly download the file).
2. Critically analyze the information and write a brief report, responding to 4 questions in the case
study.

Question 1:

After completing a comparison of current performance against desired performance levels, identify the
corrective actions required to achieve the business plan goal of improving warehouse productivity by 10%.
What type of corrective actions do you recommend for each performance improvement (e.g. interim, adaptive,
corrective, preventative or contingency)?

Area Required corrective action

Time
Average order processing
time

Cost
Average cost to process an
order

Quality
Error rate

Production
Average number of orders
processed per day

Question 2:

 Critically analyze the performance against planned objectives.

 Identify areas of non-performance.
  Report on systems failures which contributed to these results.
 Consider failures in communication, planning, reporting and training.
 Review performance indicators and refine if necessary.
 Comment on the suitability of performance indicators and what changes might be required to achieve
organizational goals.

Question 3:

 Recommend performance improvement strategies.

 Identify and redefine performance measures, if necessary.
 Document a training and development strategy to address the performance of underperforming
individuals or teams.
 Identify development needs of individuals and groups.
 Identify training/coaching needs.
 Present in a development plan.

Question 4:

 Develop a strategy for reviewing systems processes and work methods at B&A Toy Warehouse.
 Describe how the implementation of your strategy would lead to continuous improvement.

SPECIFICATIONS

You must submit:

a written report that addresses all questions in the case study.

Mark this attachment as AT3

Assessment Task 3: Respond to performance data

 Report – B&A Performance Data Analysis
Executive Summary
The purpose of this report is to analyze actual performance against planned objectives within
B&A Toy Warehouse, report systems failures, review performance indicators and what changes might be
required to achieve organizational goals, recommend performance improvement strategies, identify and
redefine performance measures training and session coaching application where necessary, strategy for
reviewing systems processes and work methods, and describe continuous improvement for the
organization.

Introduction
This report will analysis current performance data of B&A Toy Warehouse against its planned
objectives. I will also identify non-performance areas, suggest changes and implement strategies to
improve staff performance, change performance indicators and review performance measures.
Further information will be provided regarding training and development plan and
implementation of strategies related to organization system reviews.
Question 1:

After completing a comparison of current performance against desired performance levels, identify the
corrective actions required to achieve the business plan goal of improving warehouse productivity by 10%.
What type of corrective actions do you recommend for each performance improvement (e.g. interim,
adaptive, corrective, preventative or contingency)?

Area Required corrective action

Time Corrective

Average order processing Trimming redundant tasks and piling them into singular
time ones, and eliminating redundant positions can help save
your company valuable time

Cost Adaptive

Average cost to process an Purchase the Right Quantities

order
Your ongoing inventory count can help guide the decision on
how much of a product to buy. Whenever possible, avoid
succumbing to large-volume discounts that only add to
existing inventory. Instead, seek out the best deal with the
smallest quantity your business must keep on hand.

Quality Preventive action

Error rate  Thorough part number identification

 Grouping orders

Smart sorting of orders can be another useful method of

reducing pick errors.

 Careful staging of product

It goes without saying that the less travel time by an order

picker. So you should store orders as close as possible to the
pick/pack area to minimize travel time as the order picker
fills orders.

Production Adaptive

Average number of orders Order processing speeds can be improved on a physical level
processed per day as well by:
  Implementing company policies requiring the
processing of orders to be completed within a
specified time.

 Training staff to double check each order before

processing.

 Pre-packaging quantities most commonly ordered

and encouraging customers to buy in these
quantities.

 Keeping a record of customer details, based on their

previous ordering patterns.

Analyze systems and processes

After implementing his strategy to monitor and evaluate performance, Tony has identified the areas that
require corrective action. Tony knows that in order to do this, he must first complete a more detailed
analysis of the warehouse systems and processes, and identify the specific steps required to improve
productivity.

Systems

Two years ago, the warehouse implemented a custom-built electronic warehouse management system
(WMS) which has had an enormous impact on productivity. When completing his review, Tony asks the
following questions to ensure that the system effectively supports warehouse operations:

● Has the warehouse achieved the productivity goals that were to be delivered by this system?

● What is the occurrence rate of the system being out of order and impacting on the packing of orders?

● How long does it take to train new staff members to use the system?

● How do the employees who use the system rate its ability in assisting them to process customer orders
efficiently?

Tony also uses the system to generate a series of reports that allow him to analyze warehouse systems
and processes. The reports details:

● Number of orders packed per hour, per day

● Time required to pack each order

● Number of packers per order

● Number of boxes per order.

Tony also documents the process (from order receipt to dispatch) to assist with his analysis, and to help
him to understand the exact process followed in packing an order (see the following page).
 Order
received by
email from
customer

Order entered into Order printed and

WMS by provided to Packing
Administration team Supervisor

YES Order sent to Order processed

Is order for Priority Customer within 1 hour of
a Priority Packing team receipt
Customer?

NO

Order placed in Order processed

order packing queue and packed

Order processed
and packed

Order sent to
distribution team

Distribution team
wrap and label
order and send to
transport dock

Transport dock
team load order on Customer
truck to deliver to receives
customer order
Tony also completes the following SWOT analysis to assist with his review.

Warehouse order processing systems and process

Strengths: Weaknesses:

● Warehouse Management System ● Absenteeism.

automates administrative
● Warehouse layout – stock difficult to
components of the process.
access.
● Simple process for packing and
● Warehouse supervisors are all junior
distributing customer orders.
and new to management roles; they
● Good orientation and induction require intensive coaching and support
programs for new staff, to ensure from Warehouse Manager.
they get up to speed quickly.

Opportunities: Threats:

● Warehouse extension to facilitate ● Forklift licence requirements mean that

better layout. not all staff can drive a forklift.

● Preferred supplier arrangement to ● The above requirements also require

be established with temporary staff to have time away from packing
workforce supplier, to ensure floor to attend training.
provision of temporary labour.
● Industrial action from Union members
due to lack of licensed forklift drivers.

Performance measures and assessment tools and techniques

At the commencement of the performance year, Tony tasked his management team to complete balanced
scorecards for all warehouse team members, and record the key result areas (KRAs) and key performance
indicators(KPIs) for each role. This was done to ensure that all warehouse employees understood the
performance measures for their role.

The scorecards were last accessed two months ago to complete annual performance reviews.

Tony contacted the Human Resource Manager to obtain a report detailing the KRA’s, KPI’s and
performance ratings for all warehouse employees. He wants to evaluate the performance review process
and the effectiveness of these measures in assisting the warehouse to achieve its operational plan goals.

Upon reviewing the report provided by Human Resources, Tony discovered:

 Only 80% of employees have documented KRA’s and KPI’s – 20% of employees do not know what
performance level is expected of them.
 KPI’s are not aligned with warehouse goals – employees are not clear on what the warehouse is
trying to achieve.
  Majority of KPI’s are not written using SMART format –they are not providing employees with
clear expectations on what needs to be achieved and by when.
 Performance ratings indicate that 50% of employees exceeded performance expectations for the
last performance year, which is inconsistent with warehouse end-of-year results (the warehouse
did not achieve its operational plan goals last performance year).

Performance reports

As Warehouse Manager, Tony is tasked with the following human resource KRA’s:

Warehouse

Human Resources Scorecard

Key Result Area Metric

Absenteeism 3%

Turnover 8%

Long service leave liability $2.0 million

Annual leave liability $1.5 million

Employee engagement 85%

Employee attended training sessions 45

Warehouse Human Resources Monthly Performance Report

Report name Human Resources Monthly Report

Department Warehouse

Period 201X Year to Date

Key Result Area Target Actual

Absenteeism 3% 3.9%

Turnover 8% 9.2%

Long service leave liability $2.0 million $1.8 million

Annual leave liability $1.5 million $1.2 million

Employee engagement 85% 83%

Employee attended training 45 32

sessions
Identifying trends

To assist Tony in understanding the warehouse operations, and to identify where he can make
improvements to achieve performance objectives and measures, Tony graphs the number of orders
processed and absenteeism for each month over the last year.
Question 2:

Critically analyze the performance against planned objectives.

Identify areas of non-performance

 Only 80% of employees have documented KRA’s and KPI’s – 20% of employees do not know what
performance level is expected of them.
 KPI’s are not aligned with warehouse goals – employees are not clear on what the warehouse is
trying to achieve.
 Majority of KPI’s are not written using SMART format – they are not providing employees with
clear expectations on what needs to be achieved and by when.
 Performance ratings indicate that 50% of employees exceeded performance expectations for the
last performance year, which is inconsistent with warehouse end-of-year results (the warehouse
did not achieve its operational plan goals last performance year).

Report on systems failures which contributed to these results

Consider failures in communication, planning, reporting and training

Lack of communications

Communications are the most important that allows effective decisions to be made across the team.
Communications breakdown, the effective of the decisions being made can rapidly turn bad.

Failure to engage stakeholders

Stakeholders are the people who need to provide key input to the critical decisions made in the project.
Failure to engage stakeholders effectively is the fast-path to disaster.

Failure to address performance requirements

Performance requirements are one of the non-functional requirements a system needs to satisfy. Many
projects fail to define their non-functional requirements (especially performance) and that failure leads
to systems that are operationally unusable

Poorly planned / managed transitions

The work needed to successfully transition a project from the project team to the operational
environment or market place once the project is complete is an area that often gets overlooked. Failure
to properly think through that transition can quickly turn what might have been a project success into
chaos.

Review performance indicators and refine if necessary

Comment on the suitability of performance indicators and what changes might be required to achieve
organizational goals

The following are six important KPIs that will help warehouse operate more efficiently and effectively.

 Inventory turnover
  Inventory turnover is important to business because it measures the frequency at which we sell
out our inventory.
 Cost of carrying inventory
 The carrying cost of inventory metric is the cost of storing inventory over a certain timeframe.
When we have inventory taking up warehouse space, it comes with an array of costs, such as
labor, risk/insurance, storage and freight. With a firm grasp on this KPI, we can figure out how
much profit your current inventory will really bring and limit write-offs and write-downs.
 Receiving efficiency
 Another KPI that can make or break our warehouse is the efficiency of our receiving area; don’t
ignore it for other seemingly more important areas of the warehouse.

Put-away

The put-away KPI is not always the easiest to measure, but it’s not impossible. Factors to consider are:

 Accuracy rate
 Cost per item put away
 Time it takes from receiving to pick location
 Man hours

Inventory accuracy

The best way to measure inventory accuracy is to compare how many items are in stock to what’s actually
recorded in our database. Doing this on a regular basis ensures that bookkeeping practices are in order.

Order picking/packing

In our operations, we may find that order picking is the most expensive and difficult process. It is often
the most labor intensive and tends to be more complex than other processes. However, the
picking/packing KPIs are significant since customer satisfaction depends on it.

Five important KPIs for order picking include the following:

 Cost per line item picked

 How may orders picked per hour
 Costs of picking labor
 Use of packaging and other consumables
 Order cycle times

Since shipping’s main focus is customer service, measure for accuracy and speed. Another excellent metric
is percentage of perfect pick lines
Question 3:

Recommend performance improvement strategies

To help you improve employee performance in your business, we have put together 7 strategies that,
when implemented, could have a great effect on how your employees do their job.

 Communicate. The most basic of communication errors can lead to employee dissatisfaction and
subsequently low performance
 Listening to your employees will also help you know which areas to improve so as to make your
employees happy and more productive.
 Provide training. Provide training and refresher courses to keep your employees sharp. Training
will help motivate employees by showing them that they are valued assets of the company, and
reduce inefficiencies and errors; all of which will help improve performance.
 Praise and reward good work. Don’t assume your workers know their input is valued. When an
employee excels at something, make a fuss. Announce the achievement publicly and give praise
to the outstanding employee.
 Provide the proper equipment. It’s very frustrating trying to get a job done without the proper
tools and equipment. Make sure your workforce has all the necessary tools to get the job done
safely and efficiently. Also make sure that your employees are trained how to use all new
equipment. Otherwise, the investment won’t have a great effect on performance.
 Empower your employees. Allow your employees to set their own goals and come up with
strategies to achieve them. Give them the power to make decisions instead of having them come
to you for the tiniest of matters.
 Promote from within. Give your employees the opportunity to advance their careers by
promoting from within the organization.
 Keep tabs on employee performance. To improve performance you need to consistently measure
it and keep records. This will help you detect changes early so that corrective action measures can
be implemented in time and to check whether the changes you are making are producing the
desired effect.

Identify and redefine performance measures, if necessary

Financial Metrics

 Profit - This goes without saying, but it is still important to note, as this is one of the most
important performance indicators out there. Margin to better understand how successful your
organization is at generating a high return. Don’t forget to analyze both gross and net profit
 Cost - Measure cost effectiveness and find the best ways to reduce and manage your costs.

Customer Metrics

 Customer Lifetime Value (CLV) - Minimizing cost isn’t the only (or the best) way to optimize your
customer acquisition. CLV helps you look at the value your organization is getting from a long-
term customer relationship. Use this performance indicator to narrow down which channel helps
you gain the best customers for the best price.
  Customer Satisfaction & Retention - On the surface, this is simple: Make the customer happy and
they will continue to be your customer. Many firms argue, however, that this is more for
shareholder value than it is for the customers themselves. You can use multiple performance
indicators to measure CSR, including customer satisfaction scores and percentage of customers
repeating a purchase.

Process Metrics

 Percentage of Product Defects - Take the number of defective units and divide it by the total
number of units produced in the time frame you’re examining. This will give you the percentage
of defective products. Clearly, the lower you can get this number, the better.
 Employee Satisfaction - Happy employees are going to work harder—it’s as simple as that.
Measuring your employee satisfaction through surveys and other metrics is vital to your
departmental and organizational health.

People Metrics

 Retirement Rate - This metric is particularly important for any organization developing a strategic
workforce plan. It can be calculated by looking at the number of employees who retired as a
percentage of the total headcount. If you do not have an aging workforce, turnover is a good
measure as well.
 Knowledge Achieved With Training - Helps the company see the effectiveness of employee
training. It can be determined by creating an exam and monitoring exam pass rate percent,
average score percent.

Document a training and development strategy to address the performance of underperforming

individuals or teams

● Identify development needs of individuals and groups.

When considering the appropriate activities for planning and implementing performance improvement,
you need to consider a number of issues. Every team leader needs to be mindful of individual and
organizational needs.

The first step is to carry out a skills audit, to determine the level of skills individual staff members possess.
That is, you need to identify what individual staff members can and can't do.

The second step is to measure your findings against the organization’s skill requirements, or what the
organization needs the staff member to be able to do.

 Identify training/coaching needs

Finally a training needs analysis is undertaken, to determine what training the staff member needs to
acquire those skills that they don't already have. This is often referred to as the training 'gap'
 Training and Development Plan
Training and
development For Whom Benefits When Cost Review data
required
All
Improvement of
Forklift license interested Within $1500
knowledge and
training and warehouse next 2 per 17/10/2017
skills.
registration staff months person
Certificate
members
Improvement of
Staff
knowledge and Within
engagement Warehouse $500 per
skills. next 1 17/09/2017
coaching managers session
Meet standards months
session
for role.
Improvement of
Implementing
knowledge and
and Within
All relevant skills. $700 per
communication next 1 17/09/2017
managers Meet session
effective goals months
organization’s
and KPI’s course
goals
Improve staff
communication
Non- Within
All relevant and $800 per
performance next 1 01/09/2017
managers understanding session
review course months
Improve staff
performance
Question 4:

Develop a strategy for reviewing systems processes and work methods at B&A Toy Warehouse

Once you have reviewed your enterprise, developed your goals and objectives and settled on the best
strategies to pursue, you need to turn your attention to actually implementing and monitoring your
activities as you move through the changes you need to make to achieve your goals. Guidelines to
implementing and monitoring a change.

Ensure that all family and staff members know what is to be implemented and by when. In a successful
farming business, it is important to:

 Ensure each member of the business knows their roles and job responsibilities.
 Develop a set of clear ground rules to reduce the risk of personal conflict.
 Discuss and agree on expectations pertaining to key areas of the business.
 Create a written agreement that has regular review dates set in advance.
 Hold regular business meetings to ensure all people in the business spend part of their time and
energy working on the business, and not just in the business.

The implementation of any enterprise transition plan should be part of the annual operating plan for your
farm. Aim to achieve the change from current practice to new enterprise strategies in as short a time as
possible. Develop a process that tests, prioritizes and sequences the best-bet options to maximize return
on investment of time and capital and annual business profit. A successful transition plan should control
then improve enterprise cash flow.

Monitor and evaluate

Monitoring and evaluation of progress are the basis for continuous improvement in a beef enterprise.
Monitoring provides an extremely important check on the accuracy of the inputs and predictions from the
analyses used to set the enterprise strategic direction.

Monitor the productivity and profitability of your business regularly

There is generally a strong association between ongoing monitoring and feedback and the successful
implementation of a plan. Continual monitoring of physical resources, livestock performance and financial
outcomes provides you with confidence that the strategies are either on-track or need revision. The
system must alert you to weaknesses in the enterprise operation and allow you to take the necessary
corrective changes based on accurate information. This helps to reduce the risk and uncertainty about
whether changes made to your beef enterprise are actually working.

Describe how the implementation of your strategy would lead to continuous improvement

Continuous improvement is a cycle of continuous review and evaluation of processes and procedures in
your organization. Having a policy of continual improvement helps you refine how you do everything to
make it as efficient and effective as possible. Having an improved process means all volunteers (and staff)
can contribute to improving the way you work.
Conclusion

There are significant number changes that need to be completed based on the above performance
analysis conducted. It shows that organization is moving in the right direction but will require changes to
established process, KPI’s, staff training plans and communication process to its stated objectives.

Organization management needs to spend significant time and effort in ensuring on the job KPI’s meet
business objectives and they effectively communicated and implemented for all staff members. This
process will ensure success within short time period.