Continuous Improvement at ACME Plate Mill

This assignment examines the successful application of continuous improvement principles at ACME Plate Mill. It delves into how the company leverages teamwork, KPIs, and process mapping to enhance production efficiency, meet customer demands, and foster a motivated workforce. The analysis highlights the positive outcomes achieved through continuous improvement initiatives, emphasizing its role in driving business success.

ASSESSMENT 3
Student
name Student ID
Unit code
and name BSBMGT403 - Implement continuous improvement
Assessment Outcome
Satisfactory Not Satisfactory  Resubmission Date:
Trainer’s Feedback:
Trainer’s Name:
Trainer’s Signature: Date:
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Student Feedback:
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Alternatively you can complete the anonymous monthly student feedback survey.
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Feedback communication
Performance objective
You must be able to demonstrate knowledge of the principles and techniques of
continuous improvement by incorporating them into a continuous improvement
(CI) procedure developed and implemented by a team.
Assessment description
You will present a written feedback report on implementing Australian
Hardware’s continuous improvement processes, following on from your
collaboration workshop in Assessment Task 1 and your coaching demonstration
in Assessment Task 2.
You will create a small database using Excel or Access by inputting data provided
by your assessor, and will explore outputs such as spreadsheets to monitor and
review performance.
You will addresses four (4) knowledge questions (in a written report) on
implementing a continuous improvement procedure, with recommendations to
explain how collaboration and coaching demonstrate continuous improvement
principles using CI techniques, and evaluate your own performance in the CI
process.
Finally, in a case study of ACME Steel, you will apply the same CI principles and
answer four questions by way of evaluation and feedback.
Procedure
1. Review your collaborative workshop planning (from Assessment Task 1) and
your coaching/mentoring session, together with your recommendations
(from Assessment Task 2) on Australian Hardware’s continuous
improvement process.
2. Write answers to the four knowledge questions (in Appendix 1 below), as
preparation for your continuous improvement (CI) report.
3. Prepare a written report on the outcomes of the continuous improvement
process at Australian Hardware, including:
a. discussion of feedback from workshop and coaching participants
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b. a list of typical areas of need for coaching and mentoring to support
continuous improvement
c. your recommendations (from Assessment Task 2) for further service
and productivity improvements, including the procedure for
recordkeeping
d. database report or spreadsheet
e. an explanation of how change management techniques can support
continuous improvement and initiative.
4. Read the ACME Steel case study (Appendix 3 below), and write your
answers to the four questions on continuous improvement at ACME Steel
(Appendix 2 below).
5. Submit all documentation to your assessor in accordance with the
specifications below.
Specifications
You must submit:
● a written report on continuous improvement processes at Australian
Hardware, including, or with attached:
○ feedback from coaching participants
○ a list of typical areas of need for coaching and mentoring in continuous
improvement
○ recommendations for service and productivity improvements
○ reference to recordkeeping procedure
○ data evidence in a spreadsheet/summary report
○ explanation of how change management techniques can support
improvement and initiative
● written responses to continuous improvement knowledge questions
● written responses to questions on continuous improvement at ACME Steel.
Your assessor will be looking for:
● answers which demonstrate an understanding of continuous improvement
principles, systems, techniques and tools
● evidence of effective collaboration with others, including taking an active
role in facilitating communication in a group and taking a lead role on
occasion
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● evaluation of the effectiveness of decisions in terms of how well they meet
stated goals
● use of a range of digitally based technology and applications to access and
filter data, extract, organise, integrate and share relevant information (e.g.
Excel or Access, to produce mock-up of data)
● use of technology to monitor and review performance
● recognition of potential of new approaches to enhance work practices and
outcomes.
Adjustment for distance-based learners:
● No changes to the assessment procedure or specification are required.
● Documentation may be submitted electronically.
● A follow-up interview may be required (at the discretion of the assessor).
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Appendix 1: Continuous improvement (CI)
knowledge questions
Question 1
a. Define continuous improvement as implemented by your team at
Australian Hardware Ltd.
b. Name four or more elements of continuous improvement implemented by
your team at Australian Hardware Ltd.
c. Who was involved in the process (which stakeholders)?
d. What did you do as part of the Australian Hardware team to enable the
continuous improvement implementation to succeed?
A For Australian Hardware Ltd., continuous improvement is a tool to accomplish
the business objectives along with implementing them. The continuous
improvement strategies have been designed in a way so that the company meet the
strategic objectives which are a part of the business plan of the company. This
business plan leads to business goals of Australian Hardware (Hopper, 2017).
B The four elements of continuous improvement implemented by the team at
Australian Hardware Ltd. Are;
1. Knowledge sharing with the evaluation of data and analysis reports.
2. Quality Management so that quality at each and every process is pursued by the
company.
3. Enhancing customer satisfaction by the use of strategies so that the quality of
products is improved and setting up KPIs.
4. As the CI coaches conduct training session the environment of learning and self-
improvement is established.
C Australian Hardware involved many stakeholders from all levels of operation in
the process of continuous improvement. The COO, CFO, marketing managers,
operation managers, human resource manager and the store managers are a part of
continuous improvement system (Stillwagon, 2015).
D To successfully implement the continuous improvement we as a part of the
Australian Hardware team developed many strategies according to the business plan
of the company. Firstly, the current operational processes were reviewed to analyse
the problems. To gather this information, different tools like questionnaire,
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documented data and the reports were used. In accordance to this data, observations,
goals, KPIs ad action plans were developed to implement the continuous
improvement system. All the stakeholders were included in the process and a total
quality management methodology was implemented.
Document Name: BSBMGT403 Assessment-task-3 RTO : 51973 CRICOS Code : 03047E
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Question 2
Describe how the vision and goals of Australian Hardware helped develop the
culture of continuous improvement (what drives a continuous improvement
culture?)
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The vision and business goals which were developed by the Australian Hardware
helped in many ways in developing and enhancing the culture of continuous
improvement.
The top level management in the stores and the team levels adopted continuous
improvement. To demonstrate the vision and understand the competition many
training sessions were organised. Each and every employee at every level was made
to learn about the importance of the continuous improvement system.
In Australian Hardware, everyone can put their ideas forward about the processes to
make it better. The vision of the company is a five-year vision improvement plan
which helps in the process of developing continuous improvement culture for the
business. The five-year vision plan comprises of continuous improvement part of
daily life, learning environment, team working, customer focused, and high
performance (Hutchins, 2016).
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Question 3
How will achieving its KPIs help Australian Hardware improve customer
satisfaction (what do customers of Australian Hardware want)?
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A Key Performance Indicator (KPI) is defined as a measurable value which
calculates how effectively a company is attaining its key business objectives and
goals (Rey, 2017).
Before the implementation of KPIs, measure at ACME was based on the tonnes of
the steel rolled. The major disadvantage of this measure was that it never showed
whether it met the customers’ needs or not. Australian Hardware has set KPIs
which mainly focus on meeting the customers deadlines in the following ways:
1. Customers will always get their deliveries on time i.e. a zero backlog of
customer orders.
2. In allocated week, meeting the targets for rolling the steel plate.
With the help of KPIs, Australian Hardware continuously examines and calculates
how its operations are in the steel industry as compared to the other producers and
competitors. ACME continuously reviews its activities so that it can achieve
maximum profits. After analysing the data of the KPIs, it sends the data within and
across the organisation so that the employees can makes improvements in it. The
technical knowledge and information is also escalated across the steel industry with
the help of international groups (Rey, 2017).
A brief analysis of the KPIs shows that the the plate mill is achieving its targets for
rolling steel in planned weeks and is delivering almost 100% of customers’ orders
complete and on time. ACME plate team reduces the lead time by aiming to have
all the orders complete on time by March 2009.
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Question 4
What tools did you use to undertake the analysis you carried out at Australian
Hardware? Why were these tools appropriate?
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The tool which was used in this case study of Australian Hardware is process
mapping. The continuous improvement system is always made with a precise
understanding of the process which is determined for improvement. Process
mapping is basically a flow charting method which describes each and every step of
a process. Australian Hardware used many visual management techniques like flow
charts and wall charts. With the help of these charts, the company got a brief
description of the necessary resources and the stakeholders of each step. According
to me, this tool is appropriate as it helps the organization to implement continuous
improvement system. It describes the starting point process from which a
comparison of the improvement can be made along with the scope of each process
and its interfaces with the other related processes (Conger, 2011).
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Appendix 2: ACME Steel continuous
improvement knowledge questions
Question 1
a. Define continuous improvement as implemented by ACME.
b. Name four or more elements of continuous improvement ACME
implemented.
c. Who was involved in the process (which stakeholders)?
d. What did ACME do to enable the continuous improvement implementation
to succeed?
A For Australian Hardware Ltd., continuous improvement is a tool to
accomplish the business objectives along with implementing them. The
continuous improvement strategies have been designed in a way so that the
company meet the strategic objectives which are a part of the business plan of
the company. This business plan leads to business goals of Australian Hardware
(Hopper, 2017).
B The four elements of continuous improvement implemented by the team at
Australian Hardware Ltd. Are;
1. Knowledge sharing with the evaluation of data and analysis reports.
2. Quality Management so that quality at each and every process is pursued by
the company.
3. Enhancing customer satisfaction by the use of strategies so that the quality of
products is improved and setting up KPIs.
4. As the CI coaches conduct training session the environment of learning and
self-improvement is established.
C Australian Hardware involved many stakeholders from all levels of operation in
the process of continuous improvement. The COO, CFO, marketing managers,
operation managers, human resource manager and the store managers are a part of
continuous improvement system.
D To successfully implement the continuous improvement we as a part of the
Australian Hardware team developed many strategies according to the business plan
of the company. Firstly, the current operational processes were reviewed to analyse
the problems. To gather this information, different tools like questionnaire,
documented data and the reports were used. In accordance to this data, observations,
goals, KPIs ad action plans were developed to implement the continuous
Document Name: BSBMGT403 Assessment-task-3 RTO : 51973 CRICOS Code : 03047E
Location: NovaCore CMS\DMS\Academic Drive\Faculty\Business / Management \
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improvement\Assessment\
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2018 Page 14 of 28

improvement system. All the stakeholders were included in the process and a total
quality management methodology was implemented (Hutchins, 2016).
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Question 2
Describe how the vision and goals of ACME helped develop the culture of
continuous improvement (what drives a continuous improvement culture?)
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The vision and business goals which were developed by the Australian Hardware
helped in many ways in developing and enhancing the culture of continuous
improvement.
The top level management in the stores and the team levels adopted continuous
improvement. To demonstrate the vision and understand the competition many
training sessions were organised. Each and every employee at every level was made
to learn about the importance of the continuous improvement system (Soto, 2017).
In Australian Hardware, everyone can put their ideas forward about the processes to
make it better. The vision of the company is a five-year vision improvement plan
which helps in the process of developing continuous improvement culture for the
business. The five-year vision plan comprises of continuous improvement part of
daily life, learning environment, team working, customer focused, and high
performance.
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Location: NovaCore CMS\DMS\Academic Drive\Faculty\Business / Management \
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improvement\Assessment\
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Question 3
How will achieving its KPIs help ACME improve customer satisfaction (what do
ACME’s customers want)?
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A Key Performance Indicator (KPI) is defined as a measurable value which
calculates how effectively a company is attaining its key business objectives and
goals (Rey, 2017).
Before the implementation of KPIs, measure at ACME was based on the tonnes of
the steel rolled. The major disadvantage of this measure was that it never showed
whether it met the customers’ needs or not. Australian Hardware has set KPIs
which mainly focus on meeting the customers deadlines in the following ways:
1. Customers will always get their deliveries on time i.e. a zero backlog of customer
orders.
2. In allocated week, meeting the targets for rolling the steel plate.
With the help of KPIs, Australian Hardware continuously examines and calculates
how its operations are in the steel industry as compared to the other producers and
competitors. ACME continuously reviews its activities so that it can achieve
maximum profits. After analysing the data of the KPIs, it sends the data within and
across the organisation so that the employees can makes improvements in it. The
technical knowledge and information is also escalated across the steel industry with
the help of international groups (Stillwagon, 2015).
A brief analysis of the KPIs shows that the the plate mill is achieving its targets for
rolling steel in planned weeks and is delivering almost 100% of customers’ orders
complete and on time. ACME plate team reduces the lead time by aiming to have
all the orders complete on time by March 2009.
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Location: NovaCore CMS\DMS\Academic Drive\Faculty\Business / Management \
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improvement\Assessment\
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Question 4
What tools were used to undertake the analysis carried out by ACME described in
the case study? Why were these tools appropriate?
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The tool which was used in this case study of Australian Hardware is process
mapping. The continuous improvement system is always made with a precise
understanding of the process which is determined for improvement. Process
mapping is basically a flow charting method which describes each and every step of
a process. Australian Hardware used many visual management techniques like flow
charts and wall charts. With the help of these charts, the company got a brief
description of the necessary resources and the stakeholders of each step. According
to me, this tool is appropriate as it helps the organization to implement continuous
improvement system (Conger, 2011). It describes the starting point process from
which a comparison of the improvement can be made along with the scope of each
process and its interfaces with the other related processes.
Document Name: BSBMGT403 Assessment-task-3 RTO : 51973 CRICOS Code : 03047E
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improvement\Assessment\
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Appendix 3: ACME Steel continuous
improvement policy
Introduction
The steel manufacturing company ACME focuses on meeting the needs of its
customers and providing innovative solutions. ACME manufactures, processes
and distributes steel products worldwide.
Steel is everywhere in our homes and all around us. The key markets for ACME
include construction, energy and renewables, engineering and machinery,
mining and earthmoving equipment, shipbuilding, fastenings and rail.
The principle manufacturing site in Australia is a plate mill site employing 5,500
people. The site consumes 3 million tonnes of iron ore and 1 million tonnes of
coal each year to produce 2.1 million tonnes of steel products.
ACME products go into a range of leading-edge developments:
Rail Main supplier to major rail networks, including train
services.
Steel
sections
Wide-ranging construction projects – e.g. warehousing,
shopping centres, hospitals, tower blocks, bridge
components, stadia, machinery.
Steel rods Everything from paperclips and bolts, to bed springs, wire
(for fencing and agriculture) and tyre cord (for
strengthening vehicle tyres).
Steel
plates
Construction and mining machinery, bridges, major
construction projects, tanks and pressure vessels. Steel
plate is also used in harnessing renewable energy such as
in wind turbine towers.
Modern steel production is a large-scale operation dealing in huge quantities of
materials and products. The process of steel plate production has several stages:
● receipt of pre-cut steel slabs
from the steel plant
● reheating of slabs
● rolling to achieve required
dimension and mechanical
properties
● cutting to order size
● marking with unique identities
● cold levelling to agreed
flatness standard
● final inspection
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● initial inspection for surface or
quality defects
● loading and despatch to
customer.
Producing large volumes helps to drive down the costs of running a huge and
expensive steel plant. Overall, this results in steel being a relatively inexpensive
product, typically around $1.50 per kilogram – about the same price as a
kilogram of potatoes!
In a major building project, such as a shopping complex, the cost of the steel can
be as little as 5% of the overall cost of the project. Because of these issues,
ACME needs to differentiate its business from its competitors in order to continue
to grow.
ACME’s business strategy is to produce quality steel to satisfy customer
requirements, focusing on delivering products at the right time in order to secure
profitable business. A key challenge is to meet the increasing demands for more
steel, at increasing levels of quality, and to comply with more demanding
delivery requirements. It would be straightforward to meet these challenges
using brand-new facilities. However, a new ‘greenfield site’ steel mill could cost
more than $900 million to build. ACME therefore needs to make process
efficiencies and quality and delivery improvements with its existing
manufacturing plant. This presents challenges when older facilities are not well
structured to use modern manufacturing techniques and resources.
This case study focuses on the process of continuous improvement (CI) at the
ACME steel plate manufacturing mill. It will show how ACME is finding new ways
of achieving its objectives from existing resources.
Continuous improvement
Continuous improvement is often referred to by the Japanese word ‘Kaizen’.
Kaizen means ‘change for the better’ and covers all processes in an organisation.
These include engineering, IT, financial, commercial and customer service
processes, as well as manufacturing. CI involves making continual small
improvements to a process rather than big changes at irregular intervals. This
requires close monitoring and control, and changes to the uses of manpower,
machinery, methods, materials and money to improve business efficiency.
Continuous improvement starts with management and under their leadership
works down through the organisation. The underlying theme is that everyone is
responsible and has a part to play in making improvements. All employees must
work together to identify the steps needed to improve working practices.
Planning meetings help teams to focus on satisfying customer needs. Visual
management techniques, such as flow charts and wall charts, make clear what
resources are necessary and who is responsible for each part in the process.
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Everyone has the opportunity to eliminate waste. Waste is any activity or
process that does not add value. A key question used to define waste is ‘would a
customer pay for that process?’
There are seven main areas of waste for any business:
1. transportation – moving materials or products about
2. inventory – keeping too much or the wrong stock
3. motion – people moving or travelling excessively
4. waiting times – allowing products to wait for processing
5. overproduction – making too much
6. over-processing – doing too many processes during manufacture
7. defects – errors or flaws in the product, causing rework or needing to be
scrapped.
Production processes that minimise waste are referred to as ‘lean production’. In
these processes, the aim is to use less of everything; for example, space,
materials or time.
The plate mill plant is looking to reduce waste in its manufacturing process. It
has adopted the concept of ‘flow’. This means that the products are ‘pulled’
through the process according to customer demand. All parts of the production
process, from the supply of raw steel (slab) to the finished steel plate, are
carefully planned. Scheduling for each element of the process ensures that
bottlenecks are kept to a minimum. Each process is paced to control the amount
of product in each stage of the process. This ensures that processes operate
smoothly without overload or delay and keep the desired output and quality.
Tonnage was the traditional key measure of productivity for ACME. For
employees to work to a smooth-paced process, ACME needed a significant
culture change.
Implementing a continuous improvement culture
CI needs team work. In the plate mill plant, a CI manager coordinates the
process. 40 CI coaches chosen from the workforce received training to facilitate
improvements. ACME put together a ‘toolbox’ of techniques which the coaches
use with managers, employees and operators. These help everyone understand
where and how they can improve their work. A CI culture means that everyone
can put forward ideas and have a say in how processes can change for the
better. This is known as engagement.
An organisation needs to know where it is going in order to be able to put in
place the resources it needs to achieve its plans. This is set out in a vision. ACME
plate mill has set out a five-year vision improvement plan which will help in the
process of developing a CI culture for the business. Everyone in the organisation
has to understand and actively support the plan. Workshops for all employees
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have taken place to explain the vision and why the change is necessary if ACME
is to remain competitive.
High
performance
Customer
focused
Team
working
Continuous
improvement
part of daily life
Vision
Learning
environment
Helped by the CI coaches, workers have drawn maps of their processes. These
show the links between the stages of manufacturing as well as what information
flow is needed. The maps show:
● details of tonnages
● number of products
● rework cycles
● inspection points
● stocks
● delays
● costs.
The first part of this process is a ‘current state value stream map’. This shows
what the systems and processes are like now. The next stage considers what the
‘future state map’ would look like. This highlights what ACME needs to do to
achieve this state; for example, investing in new processes, equipment or
additional staffing. ACME plate mill has 16 system maps. These link to each other
to give an overview of the whole process.
For each of the 16 systems, a number of rules about stock levels and stock
rotation have been set up.
● Stock rotation ensures that the plates for one customer do not become
buried beneath others and therefore delayed.
● The required amount of slab steel (‘feedstock’) must be in front of the mill
by the Tuesday of the week in which the material is to be rolled.
● By rolling plates in the planned week, the mill is properly paced and all
‘downstream’ processes (such as cutting, levelling and inspection) can be
scheduled accordingly.
Using the value stream maps has helped ACME to improve process flows and the
working environment. It has also reduced unnecessary motion, transport and
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processing. By taking these small steps and involving everyone in the vision, the
delivery of product has increased from 70% of plates on time to 92% on time.
Target setting
CI working requires everyone to think differently about the way they work. It was
recognised that people might be resistant, and cling to old ways of working. The
key was getting all workers to see change as their responsibility. The CI coaches
support the teams and individuals and promote or ‘champion’ new ways of
working. Over time, the team and individuals are empowered to take
responsibility and make decisions for themselves.
To help workers accept the changes, the five-year plan established a timeline for
the program of introducing change.
Year
2007 2008 2009 2010 2011
Nature of
attitudes
towards
change
within the
organisatio
n
Resistant
(workers
resist
change)
Adaptive
(workers
begin to
adjust to
new ideas)
Accepting
(workers
start to
apply new
methods)
Embracing
(workers
recognise
the
benefits of
change)
Performing
(new ideas
are fully
adopted by
the
workers)
Expertise
and
responsibili
ty for CI
CI coaches Champions
and
change
managers
Manufacturi
ng and
process
managers
Team
leaders
The team
An important part of the continuous improvement program was the creation of
key performance indicators (KPIs).
Previously, measures at ACME were largely based on tonnes of steel rolled. This
did not show whether it met customers’ needs or whether the steel needed
reworking because it didn’t meet customer requirements.
ACME has set new KPIs which focus on meeting customer deadlines, such as:
● a zero backlog of customer orders – this means customers always get their
deliveries on time
● Meeting targets for rolling steel plate in its allotted week.
ACME monitors and measures how its operations compare with other producers
and competitors in the steel industry. This process of benchmarking means that
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ACME is continually reviewing its activities to achieve best practice. ACME shares
relevant information both within and across ACME to drive improvement. It also
spreads appropriate technical knowledge and information across the steel
industry through international groups such as the International Iron and Steel
Institute.
The benefits of continuous improvement
There are significant costs involved in setting up a continuous improvement
program, including:
● allocating employee time to participate in group work
● training coaches
● Setting up a manual of tools and techniques.
However, ACME is already seeing the benefits of CI with:
● reduced waste through lean production
● improved product quality
● reduced rework time
● faster response times, giving more customers their orders on time
● becoming more competitive by driving down costs
● Retaining/gaining customers through innovative products and services.
KPIs show that the plate mill is achieving its targets for rolling steel in planned
weeks and is delivering almost 100% of customers’ orders complete and on time.
ACME plate mill aims to have all orders complete and on time by March 2009,
while at the same time reducing lead time.
The principles of team working help to create a more flexible workforce. This
gives ACME the capacity to increase or change production when necessary. In
addition, ACME employees are more likely to be satisfied and motivated when
they feel that they are making a contribution. They can see that their expertise
helps to create a more effective company. By empowering its workers, ACME
gains a more committed workforce, which helps to drive further improvement.
Document Name: BSBMGT403 Assessment-task-3 RTO : 51973 CRICOS Code : 03047E
Location: NovaCore CMS\DMS\Academic Drive\Faculty\Business / Management \
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improvement\Assessment\
Version: 1.3 Approved on: 13-09-2017 Review Date: 13-09-
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