SAMPLE. Not for training purposes. Student Workbook. BSBMGT608 Manage innovation and continuous improvement. 1 st Edition 2017

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1 Student Workbook BSBMGT608 Manage innovation and continuous improvement 1 st Edition 2017 Part of a suite of support materials for the BSB Business Services Training Package

2 Acknowledgement Innovation and Business Industry Skills Council (IBSA) would like to acknowledge Impact Training and Development for their assistance with the development of the resource for BSBMGT608C. BSBMGT608A writer: Joanna Hull BSBMGT608A industry reviewer: Neale Pearce Revised for BSBMGT608 by IBSA (version 1, 2015; version 2, 2017) Copyright and Trade Mark Statement 2017 Innovation and Business Industry Skills Council Ltd All rights reserved. Apart from any use permitted under the Copyright Act 1968, no part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, or otherwise, without written permission from the publisher, Innovation and Business Industry Skills Council Ltd ( IBSA ). Use of this work for purposes other than those indicated above, requires the prior written permission of IBSA. Requests should be addressed to the Product Development Manager, IBSA, Level 11, 176 Wellington Pde, East Melbourne VIC 3002, or products@ibsa.org.au. Innovation and Business Skills Australia, IBSA and the IBSA logo are trademarks of IBSA. Disclaimer Care has been taken in the preparation of the material in this document, but, to the extent permitted by law, IBSA and the original developer do not warrant that any licensing or registration requirements specified in this document are either complete or up-to-date for your State or Territory or that the information contained in this document is error-free or fit for any particular purpose. To the extent permitted by law, IBSA and the original developer do not accept any liability for any damage or loss (including loss of profits, loss of revenue, indirect and consequential loss) incurred by any person as a result of relying on the information contained in this document. The information is provided on the basis that all persons accessing the information contained in this document undertake responsibility for assessing the relevance and accuracy of its content. If this information appears online, no responsibility is taken for any information or services which may appear on any linked websites, or other linked information sources, that are not controlled by IBSA. Use of versions of this document made available online or in other electronic formats is subject to the applicable terms of use. To the extent permitted by law, all implied terms are excluded from the arrangement under which this document is purchased from IBSA, and, if any term or condition that cannot lawfully be excluded is implied by law into, or deemed to apply to, that arrangement, then the liability of IBSA, and the purchaser s sole remedy, for a breach of the term or condition is limited, at IBSA s option, to any one of the following, as applicable: (a) if the breach relates to goods: (i) repairing; (ii) replacing; or (iii) paying the cost of repairing or replacing, the goods; or (b) if the breach relates to services: (i) re-supplying; or (ii) paying the cost of re-supplying, the services. Published by: Innovation and Business Industry Skills Council Ltd Level Wellington Pde East Melbourne VIC 3002 Phone: Fax: products@ibsa.org.au First published: 2015 ISBN: Stock code: BSBMGT6081W 1 st edition version: 2 Release date: 2017

3 Table of contents Introduction...1 Features of the training program...1 Structure of the training program...1 Recommended reading...1 Section 1 Review Programs, Systems and Processes...3 What skills will you need?...3 Monitor and evaluate performance...4 Monitor and evaluate sustainability Analyse systems and processes Performance measures and assessment tools Performance reports Identify trends Seek advice from specialists Section summary Further reading Section checklist Section 2 Continuous Improvement What skills will you need? Continuous improvement Performance improvement strategies Communicate performance improvement strategies Create a culture of innovation and continuous improvement Manage new ideas Accept failure and celebrate success Assess ideas Gain approval for innovations Write reports Section summary Further reading Section checklist Section 3 Implement Innovative Processes What skills will you need? Promote continuous improvement Manage change Plan transition Plan contingencies BSBMGT608 Manage innovation and continuous improvement 1 st edition version: 2 Innovation and Business Industry Skills Council Ltd

4 Student Workbook Introduction Introduction Features of the training program The key features of this program are: Student Workbook Self-paced learning activities to help you to understand key concepts and terms. The Student Workbook is broken down into several sections. Facilitator-led sessions Challenging and interesting learning activities that can be completed in the classroom or by distance learning that will help you consolidate and apply what you have learned in the Student Workbook. Assessment Tasks Summative assessments where you can apply your new skills and knowledge to solve authentic workplace tasks and problems. Innovation & Business Skills Australia has licensed the use of over 200 video vignettes from the Channel 9 television program, Your Business Success. The videos have been carefully selected and embedded into relevant learning and assessment resources in order to assist education providers and students in the learning process. Each video is accompanied by a learning activity. Videos can be found on IBSA s YouTube channel at < Structure of the training program This training program introduces you to the concepts of how to manage innovation and continuous improvement. Specifically, you will develop skills and knowledge in the following topic areas: 1. Review programs, systems and processes 2. Continuous improvement 3. Implement innovative processes. Your facilitator may choose to combine or split sessions. For example, in some cases, this training program may be delivered in two or three sessions, or in others, as many as eight sessions. Recommended reading Some recommended reading for this unit includes: Bridges, W., 2009, Managing transitions, 3 rd edn, Da Capo Press, Philadelphia. Business.gov, Environmental management systems, Business.gov, < BSBMGT608 Manage innovation and continuous improvement 1 st edition version: 2 Innovation and Business Industry Skills Council Ltd Page 1 of 120

5 Introduction Student Workbook Harvard Business School Press, 2009, Innovators toolkit: Ten practical strategies to help you develop and implement innovation, Harvard Business School Press, Boston. Kotter, J., 1996, Leading change, Harvard Business School Press, Boston. Liker, J., 2004, The Toyota way: Fourteen management principles from the world s greatest manufacturer, McGraw Hill, New York. Rath & Strong, 2006, Six sigma pocket guide, 2 nd edn, Rath & Strong Inc., Massachusetts. Ruffa, S., 2008, Going lean, Amacom, New York. Slater, P., 2007, A new strategy for continuous improvement, Industrial Press Inc., New York. Toyota Australia, Toyota production system, < Please note that any URLs contained in the recommended reading, learning content and learning activities of this publication were checked for currency during the production process. Note, however, IBSA cannot vouch for the ongoing currency of URLs. Every endeavour has been made to provide a full reference for all web links. Where URLs are not current we recommend using the reference information provided to search for the source in your chosen search engine. 1 st edition version: 2 BSBMGT608 Manage innovation and continuous improvement Page 2 of 120 Innovation and Business Industry Skills Council Ltd

6 Student Workbook Section 1 Review Programs, Systems and Processes Section 1 Review Programs, Systems and Processes This section covers the skills and knowledge required to review an organisation s programs, systems and processes in order to identify opportunities for improving performance. Scenario: Mamma s Pies Paul and Tony are brothers who believed they could create a successful business by opening a pie shop. Tony opened his shop in the main street of the local town where he lived. He was pleased with the performance of his shop. After six months, he had already achieved the sales he had estimated for the first year of operation. Tony s success continued and, after five years, Tony was the proud owner of a very successful retail pie outlet selling an average of 100,000 pies a year. This was well beyond his expectations. Paul moved two hours away to a coastal town to open his shop. He too was very pleased with the success of his shop in the first six months and, by the end of his first year of trade, was exceeding his sales targets. Five years later Paul is still enjoying the success of his business, selling on average 100,000 pies per year. Tony s motto was if it ain't broke don t fix it, while Paul believed in looking at ways to improve his business. Paul developed a series of performance indicators to track and evaluate the performance of his store. He found that if he could reduce the production time of his pies, he could produce more in a day and therefore sell more pies. He investigated different options and decided to purchase a pie filling mixing machine that could mix a larger quantity than his current machine and in a much shorter timeframe. After installing the machine, Paul is now producing 100 more pies per day. He is so pleased with his investment as he has now grown his business from selling 100,000 pies per year to in excess of 140,000. Paul is now looking for where to implement his next business improvement to make the business even more successful. Meanwhile, Tony is still selling 100,000 pies a year. What skills will you need? In order to work effectively as a manager, you must be able to: establish strategies to monitor and evaluate performance and sustainability of key systems and processes undertake detailed analyses of supply chains, operational and product and service delivery systems BSBMGT608 Manage innovation and continuous improvement 1 st edition version: 2 Innovation and Business Industry Skills Council Ltd Page 3 of 120

7 Section 1 Review Programs, Systems and Processes Student Workbook identify performance measures, assessment tools and techniques and evaluate their effectiveness analyse performance reports and variance from plans for all key result areas of the organisation identify and analyse changing trends and opportunities relevant to the organisation seek advice from specialists, where appropriate, to identify new technology and electronic commerce opportunities. Monitor and evaluate performance When you monitor performance you are comparing an organisation s actual results against planned performance. Common performance measures are: time cost quality production sales Each of these measures monitors and evaluates different components of an organisation's performance. They can be used to monitor and compare actual performance against planned performance to determine how the organisation is tracking, and where improvements need to be made to bring performance back on track. Below are some examples of how these measures are applied in the workplace. Time Cost Quality How long does it take to produce a unit? How long does it take to process an order? How long does it take to serve a customer? How much does it cost to produce a unit? How much does it cost process an order? How much does it cost to serve each customer? How many orders were processed correctly? How many units passed quality inspections? How many customers were satisfied with the service provided? 1 st edition version: 2 BSBMGT608 Manage innovation and continuous improvement Page 4 of 120 Innovation and Business Industry Skills Council Ltd

8 Student Workbook Section 1 Review Programs, Systems and Processes How many units are being produced per hour? Production How many orders have been processed today? How many customers have been served today? Sales What is the sales result for that product for the month? What is the sales result for the department for the month? Learning activity: Monitor performance What measures does your organisation, or an organisation you are familiar with, use to monitor performance? How effective were these measures in monitoring the performance of the organisation? Why monitor performance? Monitoring performance ensures that you are aware of how your organisation is tracking. It helps you to identify any corrective action you may need to take to bring the performance back on track. Some examples of corrective action include: change your plan implement contingency plans increase or decrease resource levels BSBMGT608 Manage innovation and continuous improvement 1 st edition version: 2 Innovation and Business Industry Skills Council Ltd Page 5 of 120

9 Section 1 Review Programs, Systems and Processes Student Workbook bring in resources with different skills change timelines increase budget. A good monitoring system provides you with the information you need to understand how well your organisation is performing against targets and what changes are needed to keep performance on track. It allows you to manage your business proactively rather than spending your time reacting to and resolving a crisis. This can be a much more productive and enjoyable way to work! Monitoring performance Step 1: Decide what you will monitor. Step 2: Determine how you will measure performance. Step 1: Decide what you will monitor The first step in monitoring performance is deciding what it is that should be monitored. To determine this, you should think about what is most important to your organisation. For example: expenses quality sales productivity customer satisfaction employee engagement. You also need to consider high risk areas that could cause substantial damage to the organisation if something went wrong these should be included in your monitoring program. Step 2: Determine how you will measure performance Step 3: Analyse results. Once you have identified what is most important to your organisation, you need to measure it. You should ensure each area has targets that you can measure against, and that the data required to measure performance is easily accessible. For example, in a call centre operation customer care might be important for organisational success, which can be measured by the following. 1 st edition version: 2 BSBMGT608 Manage innovation and continuous improvement Page 6 of 120 Innovation and Business Industry Skills Council Ltd