MANAGE INNOVATION AND CONTINUOUS IMPROVEMENT

BSBMGT608 – Manage innovation and continuous improvement

Manage innovation and continuous improvement

Appendix 1 – XYZ Company Operational Plan

Overview

XYZ Company specialises in a range of exclusive services including running telecentres that range from order taking services to market surveys. The business provides its customers with high quality and innovative products and services. Wherever possible we provide our customers with a ‘green’ solution and service. We employ sustainable business practices.

Mission

XYZ Company is committed to:

· providing high quality and innovative products and services to customers

· meeting the changing needs of customers

· offering innovative product solutions

· delivering speedy and personalised service

· employing professional and enthusiastic staff

· providing clean and ‘green’ products and services

· adopting sustainable work practices

· undertaking continuous improvement processes.

Business plan objectives

In 2018–2023 XYZ will consolidate its position in the market as a lead telecentre for green and sustainable solutions for high quality exclusive products/services.

To do this, XYZ will focus on the following business goals:

● Financial stability:

· Increase revenue by 15% (compared to the previous 12 months) by the end of the financial year

· Maintain annual profit levels of 15% of revenue for all products and services, calculated at the end of each financial year

· Reinvest 75% of profit back into the business at the end of each financial year ● Market position:

· Maintain the number one rating in the annual national industry customer service awards

· Launch new high quality exclusive consumer services to meet customer demand, ahead of competitors, within budget and by the agreed deadlines ● Right people:

· Provide induction training at the commencement of employment to train new employees to be knowledgeable, helpful and enthusiastic

Manage innovation and continuous improvement

Provide the financial, physical, human and time resources to support an annual professional development program for all XYZ employees

Consultation Strategy

Stakeholder	Role in the issue	Objective	Consultation method
Senior management team	Made the decision to increase sales by 15% annually	Keep informed	Feedback session Email communications Newsletters Web-conferencing
Outlet Manager	Develop an operational plan and implement the plan to increase sales in their outlet	Implement plan Consult	Staff meetings Outlet manager meetings via web-conferencing interviews
Sales staff	Implementers of the plan to achieve the intended results	Consult Keep motivated and engaged	Meetings Feedback sessions
Major customers	Regular customers who make major purchases of XYZ products/services	Consult	Phone calls Personal visits Email communication Newsletters
Customers	People who make small purchases of XYZ products/services	Obtain feedback	Email communication Newsletters
Market analysts	Consultants who provide market insights about XYZ products/services	Consult	Focus group meetings
Recruitment agencies	Involved in recruiting staff	Consult	Meetings

Operational Action Plan (July – September)

tivity

What is to be ne?)

evisit sales dgets and velop outlet-bytlet sales ategies that add to the national les strategy

quire additional

sources – webnferencing uipment

quire additional

sources – livery van

eorganise fixtures

d fittings – retail tlet

ain sales staff to ovide after sales oduct/services pport

aintain full staffing pacity through pid recruitment to vacancies Objective (Why will we do it?)

To increase the sales of the services component of the business by 15% by 30 June

To facilitate communicatio n between all outlets and reduce travel time and costs

To provide a delivery service and provide brand recognition

To create additional space for installation of demonstration products

To multi-skill product/servic e staff and to improve the level of after sales product/servic e support

To maintain and increase sales capacity by recruiting new staff as Resources (Where will it be done?)

It will be done across all outlets.

Install a multichannel dedicated web-conferencing facility at each outlet

Purchase a new van for each outlet and detail it with the marketing logo.

It will be done across all retail outlets.

It will be done across all outlets

13 new full- time sales staff will replace staff vacancies in three outlet stores Procedures (How will it be done?)

Update each outlet’s sales budgets to reflect the increased targets.

Each outlet is to develop a sales strategy to support the new targets.

Conduct XYZ IT service and support to arrange for supply and installation

Allocate costs back to each outlet

Contact suppliers, obtain quotes and purchase the required delivery van

Contact signwriters to have marketing decals attached to the vans

Have plans drawn up for each retail outlet

Hire local shop fitters and installers for each sales region

Deliver training programs

XYZ recruitment procedures Responsible When? person (Who

Outlet managers	30 June
Outlet managers	31 August
Head office marketing manager	31 July
Head office sales manager Retail outlet managers	30 September
Outlet managers	31 August
Outlet managers	Maintain full staffing capacity through rapid

will do it?)

Budget

$3,000,000 total and needs to be supported by a business case from each store

$5,000 per outlet

$50,000 per outlet

$10,000 per outlet

In house

Additional resource available but a business case is required

To maintain and increase sales capacity by recruiting new staff as soon as

KPI

Retail sales o business increased by 15% by the en of the financia year

All webconferencing equipment installed by 31 August

Delivery van purchased an decals attache by 31 July

All stores to b operational wi current XYZ range of products/serv es by 30 September

All existing product/servic staff training in multi-skilling completed by 31 August

13 new full- time sales sta will replace st vacancies in

soon as existing positions are vacated

recruitment to fill vacancies.

existing positions are vacated

three outlet stores.

Risk

The timely recruitment and training of new staff is a key success factor in meeting the strategic objectives of the business plan. In order to meet the objectives it is necessary to have recruited the new staff and upskilled our current staff in after sales product support by 31 August. In the event that we do not meet these objectives, we have budgeted an additional 5% of training costs to employ a training consultant to provide additional training resources.

It is critical that our outlet managers monitor the progress of their operational plans against the target KPIs established. To that end, it is essential to review the operational plan monthly.

Approvals

Name	Position	Date approved	Signature
Mike Smith	Chief Executive Officer	15 June
Mary Johns	Managing Director Business operations	15 June

Appendix 2 – XYZ Company Risk Management Policy

Scope

This policy describes our commitment to meeting strategic and operational goals related to risk management. It forms part of our commitment to continuous improvement.

Risk management will be reviewed through regular training, monitoring, auditing and reporting processes.

Framework

This risk management policy is based on the Standard AS/NZS ISO 31000:2009 Risk Management – Principles and Guidelines.

All business activities must be assessed for risk prior to commencing and managed throughout.

Risk identification, analysis, evaluation and treatment must be reported and updated in the risk register.

Definitions

· A risk is any event that impacts XYZ Company’s ability to meet its goals and objectives.

· Risk identification is the process of determining what might happen, as well as how, when and why it might happen in relation to the identified risk.

· Risk analysis is a process that helps people in the organisation understand the effect of the risk on organisational goals and objectives.

· Risk evaluation involves comparing risks and determining the order in which they should be dealt with.

· Risk treatment is the process of applying measures to minimise, modify or eliminate the risk.

Responsibilities

The risk management policy committee oversees risk management and implementation on behalf of the board and the chief executive officer.

This committee is responsible for:

· ensuring XYZ Company is complying with any legal requirements

· ensuring risks are managed effectively ● maintaining business operations

· identifying significant operational risks

· monitoring the management of strategic and operational risks

· directing risk management processes

· receiving and analysing risk management reports and informing the Board ● making recommendations to the Board regarding risk management.

The managing directors are responsible for:

· making recommendations to the committee on risk management policies and procedures

· reviewing risk management incidents as they occur

· providing support and advice to the committee on risk management issues affecting their areas in relation to identifying, analysing, evaluating and treating risks ● establishing and administering a risk register ● implementing risk management training.

Management is responsible for ensuring risk management principles are applied.

All employees are responsible for applying risk management principles and practices in their work areas. Employees must also report risks and participate in risk management training.

Appendix 3 – XYZ Company Risk Management Procedures

Purpose and scope

In accordance with the XYZ Company Enterprises risk management policy, these procedures describe the organisation’s standard process for risk management, including:

· risk identification

· risk rating

· risk controls

· risk monitoring and reporting.

A standard approach to risk management allows risks to be correctly prioritised across all XYZ Company’s operations.

Responsibilities

The risk management policy committee oversees risk management and implementation on behalf of the board and the chief executive officer.

All XYZ Company employees are responsible for applying risk management principles and practices in their work areas. Management is responsible for ensuring risk management principles are applied.

Employees must report risks and participate in risk management training.

Risk management process

A risk to XYZ Company is any event or action that could have a negative impact on the organisation. This includes events that could lead to:

· death or injury

· financial loss to XYZ Company

· damage to XYZ Company’s reputation, including adverse media coverage ● damage to the physical environment, including land, water and air quality ● failure to meet regulatory or legislative requirements.

The risk management policy specifies that:

· all business activities must undergo risk assessment prior to commencing, and undergo risk management throughout their operation

· risk identification, analysis, evaluation and treatment must be reported and recorded in the risk register.

Risk identification

Risk identification is a structured approach to identifying possible events that could have a negative impact on the organisation.

Risk rating

Risk rating is the process used to analyse and understand each of the risks, including understanding what causes the risk to occur and what controls are already in place to manage the risk. Risk assessment also determines:

· how severe a potential impact could be

· the likelihood of the organisation being negatively impacted in this way.

Once the potential impact and likelihood have been assessed, the risk assessment process considers whether the risk is acceptable, or whether further treatments are required to reduce the level of risk.

All identified risks are assessed to determine the overall risk ranking. Risks are ranked in the following four categories:

· Extreme

· High

· Medium

· Low

The risk ranking determines:

· the nature of further action that is required

· the urgency with which further action should be taken

· the reporting requirements for the risk, including who the risk is reported to ● how the risk is monitored.

A common approach to risk ranking is necessary to ensure that the greatest risks to XYZ Company can be readily identified, and risk management can be prioritised in a way that has the greatest overall benefit to the organisation.

The following tables show how the consequences and likelihood of risks are assessed.

Likelihood

Likelihood is based on the number of times within a specified period that a consequence may occur as a result of a risk.

Likelihood	Description	Probability
A. Expected	Expected to occur in most circumstances	>80%
B. Probable	Will probably occur in most circumstances	50%–80%
C. Possible	Might occur within 1–2 years	21%–49%
D. Improbable	Could occur during a specified time period	5%–20%
E. Rare	May only occur in exceptional circumstances	<5%

The risk rating is determined by combining the consequence and likelihood, as shown in the following table.

Level of likelihood			Level of impact
	1 (Insignificant)	2 (Minor)	3 (Moderate)	4 (Major)	5 (Catastrophic)
A (Expected)	Medium	Medium	High	Extreme	Extreme
B (Probable)	Medium	Medium	Medium	High	Extreme
C (Possible)	Low	Medium	Medium	High	High
D (Improbable)	Low	Low	Medium	Medium	High
E (Rare)	Low	Low	Low	Medium	Medium

Risk controls

Controls represent a whole range of actions, measures and strategies taken by management and employees to eliminate or reduce risks. The process of determining risk controls includes assessing the consequences and likelihood of the risk, and evaluating risk treatment options. This could include:

· avoiding the risk

· mitigating the risk

· transferring the risk ● accepting the risk.

A process should then be followed to identify efficient and effective ways to mitigate the risk. This can occur by:

· removing the risk

· reducing the likelihood of the risk impacting the business ● reducing the consequences if the risk were to occur.

When determining risk treatment options, consider the hierarchy of control, which ranks the level of control from most to least effective:

1. Elimination

2. Substitution

3. Isolation

4. Engineering controls

5. Administrative controls

6. Personal protective equipment Risk monitoring and reporting

Risk monitoring and reporting involves regular review to ensure that:

· new risks are identified and considered as they arise

· existing risks are monitored to identify any changes that may impact the organisation

· new risk controls are implemented

· existing risk controls are in place and working effectively ● information about risks is adequately communicated.

All risks that are rated as moderate, significant or high in the risk assessment process will be regularly reviewed by the risk management policy committee. This review may be conducted in the following ways:

· The risk manager will report on new risks identified by staff during the course of their work since the last committee meeting.

· Risk owners will provide a report on the status of their assigned risk to the committee.

· The risk manager will report on risk register reviews following a structured risk identification workshop each year, or any review of the risk register.

The reports to the committee should outline that risk controls are to indicate:

· the causes of the risk

· the implication of the risk with amendment to existing controls (if they exist) ● what any existing mitigating controls are

· what actions are being undertaken to put further controls in place, or maintain existing controls, and by when

· who is responsible for ensuring controls are in place.

Appendix 4 – XYZ Company Sales Report

This sales report provides real-time data and information on XYZ Company’s sales performance from July to November.

The following tables show:

· the income statement

· a breakdown of revenue provided by each sales channel

· performance statistics for sales generated through eCommerce – specifically through XYZ Company’s website and online shopping

Income statement (profit and loss YTD)

,

, ,

,

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	July	August	September	October	Month to date
	Actual	Budget	Actual	Budget	Actual	Budget	Actual	Budget	Actual	Budge
Total income (sales)	11,023,000	11,200,000	12,054,800	16,000,000	10,555,700	16,000,000	10,573,800	18,000,000	9,456,700	12,000
Operating expenses
Payments to suppliers	5,923,000	6,160,000	6,125,000	8,800,000	5,547,000	8,800,000	6,895,200	9,900,000	5,230,000	6,600
Rent	3,398,000	3,200,000	3,800,000	4,000,000	3,800,000	4,000,000	3,950,000	4,000,000	2,900,000	3,000
Salaries and on costs	205,800	150,000	321,400	150,000	470,000	150,000	465,000	150,000	314,600	100
Marketing costs	64,000	50,000	64,200	50,000	68,500	50,000	68,000	50,000	42,700	35
Travel and accommodation	25,900	25,000	25,800	25,000	24,300	25,000	21,000	25,000	16,000	17
IT and communication	22,000	24,000	23,100	24,000	23,900	24,000	23,500	24,000	16,000	16
Administration	24,800	19,500	26,100	19,500	15,000	19,500	17,500	19,500	15,000	13
Consumables	18,900	15,000	13,600	15,000	17,200	15,000	23,000	15,000	10,700	10
Staff-related expenses	401,900	403,000	402,000	403,000	402,000	403,000	402,000	403,000	265,000	265
Depreciation	10,048	10,075	10,050	10,075	10,050	10,075	10,050	10,075	6,625	6
Total operating expenses	10,094,348	10,056,575	10,811,250	13,496,575	10,377,950	13,496,575	11,875,250	14,596,575	8,816,625	10,063
Earnings before interest and tax (EBIT)	928,653	1,143,425	1,243,550	2,503,425	177,750	2,503,425	(1,301,450)	3,403,425	640,075	1,936

As

July

August

September

October

Month to date

Actual

Budget

Actual

Budget

Actual

Budget

Actual

Budget

Actual

Budget

,

,

Sales channel breakdown

Sales channels
Retail stores	$5,500,220	$7,580,000	$5,109,800	$8,600,000	$5,670,000	$9,000,000	$6,433,700	$9,500,000	$5,576,200	$9,240,000
Wholesale division	$1,350,000	$2,000,000	$1,470,000	$2,000,000	$1,007,650	$2,000,000	$1,265,000	$2,600,000	$984,000	$2,380,000
Website sales	$2,340,000	$700,000	$3,549,000	$700,000	$1,750,000	$760,000	$520,000	$800,000	$230,000	$700,000
eCommerce resellers	$650,000	$700,000	$820,000	$700,000	$790,000	$760,000	$760,000	$800,000	$780,000	$700,000
Outbound sales	$452,380	$700,000	$372,000	$700,000	$328,000	$760,000	$680,000	$800,000	$560,000	$700,000
TV shopping channel (Australia)	$600,000	$700,000	$574,000	$700,000	$780,000	$760,000	$704,560	$800,000	$850,000	$700,000
TV shopping channel (Asia)	$130,400	$700,000	$160,000	$700,000	$230,050	$760,000	$210,540	$800,000	$476,500	$700,000
Total sales	$11,023,000	$11,200,000	$12,054,800	$16,000,000	$10,555,700	$16,000,000	$10,573,800	$18,000,000	$9,456,700	$12,000,000

	J	uly	August	September	October
	Actual	Target	Actual	Target	Actual	Target	Actual
Key performance indicator (KPI)
Total visits to site	939,760	300,000	1,473,289	300,000	1,742,985	300,000	861,048
Page views	4,609,300	1,500,000	6,748,000	1,500,000	8,348,350	1,500,000	4,396,030
New visitors	690,560	200,000	1,130,200	200,000	1,058,230	200,000	264,930
New customers	25,485	6,000	49,285	6,000	17,249	6,000	3,859
Cart abandonment rate	27%	60%	26.5%	60%	89%	70%	86.4
Customer service open cases	14	10	27	10	78	10	135
Average transaction value	$83.50	$75	$72.20	$75	$81.95	$75	$84.57
Facebook 'likes'	37,430	7,500	47,638	7,500	32,850	7,500	5,953

eCommerce performance statistics (July–November)

Customer feedback

XYZ Company has collected the following feedback from customers in relation to their online shopping experience.

Reasons why shoppers abandoned their sale at the checkout

Appendix 5 – Communication plan template

Communication plan

Appendix 6 – PEST analysis template

PEST analysis

Political	Economical
Social	Technological

Appendix 7 – Risk Management Planning template

Risk management plan

Background:

Context:

Level of access and restrictions:

Reporting requirements:

Risk matrix

Level of likelihood			Level of impact
	1 (Insignificant)	2 (Minor)	3 (Moderate)	4 (Major)	5 (Catastrophic)
A (Expected)	Medium	Medium	High	Extreme	Extreme
B (Probable)	Medium	Medium	Medium	High	Extreme
C (Possible)	Low	Medium	Medium	High	High
D (Improbable)	Low	Low	Medium	Medium	High
E (Rare)	Low	Low	Low	Medium	Medium

Risk evaluation

Priority	Risk	Likelihood	Impact	Level of risk

Risk action plan

Record-keeping procedures

Updates	Person responsible	Date
Risk register
Lessons learned register

Appendix 8 – Competitor analysis template

Competitor analysis

Assessment Resources – Appendices - BSBMGT608 Manage innovation and continuous improvement | Page 1 of 26 V 4.0: May 2020, Approved: QAC, Next Review: December 2020 International College of Tasmania Pty Ltd trading as: TasCollege RTO Code: 45352 | CRICOS Code: 03683K