BSBMGT608: Performance and Sustainability Review Strategy Report

This report provides a comprehensive analysis of a performance and sustainability review strategy, using the case study of A.C. Gilbert. It explores key elements like supply chain management, operational systems, and product and service delivery. The report applies continuous improvement and quality management theories to identify effectiveness in these areas. Key performance indicators (KPIs) such as revenue growth, market share, and customer satisfaction are examined to evaluate A.C. Gilbert's performance. The analysis includes a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis and proposes strategic goals and risk analysis for continuous improvement, including diversification, customer experience models, and risk management. The report concludes by highlighting the factors that contributed to A.C. Gilbert's success and eventual downfall, offering insights into how businesses can adapt and innovate to achieve sustainable performance.

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Manage Innovation And Continuous Improvement
by(Student Name)
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PERFORMANCE AND SUSTAINABILITY REVIEW STRATEGY
A supply chain is a connection between a products supplier and producer to get
the product to the consumer, it shows all the steps in getting a product to its final form
and use (Kenton, 2019). Companies manage the supply chain with utmost care to
maximize returns and minimize input. Operational systems refers to a system used to
process day-to-day transactions of an organization. Operational systems include ("IBM
Knowledge Center", 2019). Product and service delivery involves the customers being
served. The supply chain involves sales department, the sales department getting
orders, goods being delivered by the distribution department to purchasers and retailers
selling to their consumers. The systems in operation were purchasing,manufacturing,
design, planning and distribution.
The design stage was composed of a small group of designers, they were the
think tank team that came up with ideas to be implemented. They came up with the
concepts of the products and toys to be designed by the company. The planning team
implemented the design’s team work, in this stage what quantities of a product needed
are also decided. They come up with prototypes and the budget for the products. They
worked on every aspect of the product from the way to minimize costs, the sales
projections, marketing strategies, the logistics decisions and the timeframes.
Purchasing stage, raw materials to be used are purchased in this stage, data from
planning is used in this stage. Manufacturing phase there is production of toys, toys are
manufactured and packaged.Distribution phase, the packaged toys are stored in the
warehouses.
In this research, I will apply continuous improvement and quality management
theories to identify how effective the following are: supply chain, operation systems,
products and service delivery. It is mandatory or key in order to achieve the targeted
goals to have a key result area("Key Result Area(KRA)", 2012). In KRA areas of
outputs or outcomes which department role is responsible are identified. In this study,
the key result areas are customers and customers perception towards the product, we
evaluate how customers of the toys and sets react towards the products. Managing
costs is key for optimum performance, costs need to be carefully evaluated, A. C Gilbert
kept their costs down by using traditional advertising and not investing in research and
development which was eventually their downfall. Record keeping is vital for a business,
A. C Gilbert was a traditional family business, keeping and managing their records
properly. Product management was handled by the planning and design teams,
Different departments handled products at their different stages. A.C started as an
erector set business but moved to toys, they didn’t, however, evolve the toys to the
preferences of their customers. Customers wanted trendy toys, consumers of toys
wanted those they could see on television and modern advertisement types, the new
toys were also comparatively cheaper and more appealing to the children. A. C didn’t
handle their products in the best way, it is what contributed to their downfall.
The key performance indicators for A.C Gilbert were high-quality toys, gross
profit margins, revenue growth, the market share, inventory turnover, demand
forecasting, product durability and customer satisfaction. A C focused on the creation of
high-quality toys, they used long-lasting materials, they were well designed to tolerate

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relatively extreme conditions. The toys were expensive to acquire but the kids stayed
with them for long without damage, they identified themselves as a toy manufacturer for
durable toys. A-C measured their performance using revenues, in the 1950s their
revenues regularly topped $17 million. A C sold 52% of its stake for $4 million when it’s
revenues lowered to a record low. The new owner Jack Wrather looked at increasing
revenues by aggressive marketing, diversifying their toy lines and changing their target
markets and product packaging. A C Gilberts company was keen on growing its market
share when the market share reduced they sold it to a new owner and rebranded to try
and grow its market share again. Customer satisfaction was key for the initial success of
the erector engineering set. Customers only buy products they love, customer
satisfaction reduced because they focused on educational instead of entertainment
toys, their packaging was boring and they didn’t create enough for girls. To try and
revive their earlier fortunes they focused on girls, improved packaging, made toys for
the different age groups, made trendy toys and improved advertisement in order to
improve customer satisfaction and cement their brand.
Performance review processes are a series of steps taken to gauge and rate the
performance of a business. Erector engineering set had a planning process that
reviewed the business processes and worked on timeframes for production runs.
The quality management theory sees that a company has consistency in its
services and products. Continuous improvement theory is based on continuous
changes to a company’s products ("The Continuous Improvement Theory - Cybrary",
2019). After Jack Wrather performed majority shareholder he embarked in reviving the
company, I have studied the three key systems in the process. In 1962, the supply
chain was improved by increasing sales staff. The operational systems were improved
by replacing top executives, using television advertisements and introducing new
product lines, 50 products in 12 months.Despite an improvement in service delivery and
current products being repackaged, a loss of $281 thousands was made. In the year
1963, sales and profits were lower than in 1962. The operational systems worked on
establishing new lines, the rapid expansion caused a drop in sales and profits. The
service and product delivery declined, customers decried the drop in quality of toys, the
new products were deemed expensive and useless by customers. In 1964 to revive
performance Jack Wrather worked on operational systems to turn the fortunes around,
most of the managers he had initially hired were fired, he hired a new Chief Executive
Officer(CEO), the new CEO worked on cost cutting methods and streamlining
operations, the measures included firing the sales department, he worked on building
direct relationships with manufacturer’s representatives instead of having a sales team,
in the new model the representatives made income from commissions. Upon A. C
Gilbert death he was replaced by Jack Wrather, Isaacson consequently moved to the
president role. The supply chain had been completely changed by the use of
independent reps, the cost of the erector set dropped from $75 to $20, using cheaper
materials. In this year the sales grew again. In 1965, the operating systems were still
affected by 1964’s cost-cutting measures, they had fewer staff hence not meeting the
new product goals. They couldn’t introduce lines due to insufficient staff members. In
1966, the supply chain changed, introducing display products supplied to dealers for
free, advertising expenses rose to $3 million. The changes in operational systems lead
to A C borrowing, they, however, made a loss of $12,872,000. My review strategy

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focuses on the fundamentals to make a business successful, to monitor performance
specific parameters should be observed over the period of study. In this research the
profit/loss has been reviewed as a different parameter in 1962 they made a loss of
$281,000 and in 1966 they made a loss of $12,872,000 this meant the loss grew, they
also changed their sales approach from having a sales team to investing on advertising.
The results provided in 1966 were a great disappointment from the expectations,
in 1962 they set a revenues target of $20 million but they only achieved half, getting
$10.7 million. They didn’t meet any of their KRA’s, the quality of toys depreciated from
their high quality to brittle toys, the sales dropped, and the profits hit a record low of $12
million. The supply chain performance changed with the introduction of independent
representatives, business growth was not helped by the acquisition by Jack Wrather.
Jack Wrather, there was a massive staff and management turnover in the name of cost-
cutting and restructuring.
The A.C. Gilbert failed to adapt to changes and they collapsed. Their strengths in
the 1950s included not having a huge competition to compete with. Their reputation for
developing really good strong and durable toys also helped their business. In the 1950s
they were a small company but they lead in sales revenues in the toys industry. They
established a reputation as a traditional manufacturer of durable toys. Their failure to
innovate and the ability to adapt to change was their greatest downfall if they
researched and moved to the new advertisement channels they would have stood a
chance at survival. Their employee performance greatly affected their performance,
hiring employees without clear plans or proper vetting affected the organization.
Production and manufacturing couldn’t happen as expected due to capital and staff
shortfalls.
If A. C didn’t close they would take a few options to try and revive their
operations. Internally they would release most employees, this would help them take
time to restructure without favours or people in place. External changes will be made by
hiring consultants in every department. Starting as a smaller company and building up
will really help the company, instead of striving to be big by heavy debt.
DEVELOP OPTIONS FOR CONTINUOUS IMPROVEMENT
Performance Improvement Strategy
Strategic goals help a business identify the intended strategy.They are needed
when a business is developing or expanding. A. C should develop strategic goals to
save it’s business (Taylor, 2019). The strategic goals could include developing their
product niche, working on a customer experience model, increasing the profit and loss,
diversifying income streams, diversifying on the customer segments. Different toys will
be made to target different customer segments, toys for the rich, young, old and even
those for educational purposes. Toys should also be made to fit the different racial
stereotypes, people of different races will have different preferences. To improve
customer satisfaction, A.C should improve on asking for and working on feedback,
improve on turn around time and customer complains actions, have a clear
communication on how to use the toys and where to dispose of the old ones,
introduction of a warranty will also be good for A. C and improvement of delivery time of
toys to suppliers and retailers.

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The current process involves design, planning, purchasing, manufacturing and
distribution. Current amendments will include adding research as a primary tenet. I will
include research before the entire processes.
The KRA’s will include the quality of products, the design quality of the toys, the
manufacturing quality, the sales made, the profit, the effectiveness and efficiency of the
supply chain, the improvements of staff in quality, staff retention and performance,
performance turnover ("Strategic goals", 2019).
Risk Analysis
It is mandatory that a proper risk analysis is carried out in the planning stage
(Montshiwa, 2017). It helps to identify the hazards hidden or those not planned for.
Business risk analysis is an essential part of the planning process. The business is
faced by strategic risks those associated with being in the toy and sets industry,
financial risks the risk of going broke, operational risks those because of the procedures
and processes in the toy industry, environmental risks are those associated with where
a company operates the macro-factors in the toy industry and regulatory risks that is the
government and regulatory bodies.
The company has to work and accommodate the risks in order to be successful
in the competitive environment. Risks can be caused by failure to observe A. C’s
policies and procedures, by having insufficient or rigid plans or by external factors,
those we don’t have control over. A Strengths Weaknesses Opportunities
Threats(SWOT) approach will be used in the risk analysis (Parsons, 2018). The
strengths for A.C will be operating for a long time, strong capital, strong revenues in the
past, the opportunities include moving to new countries, producing new products and
diversifying the portfolio, the weaknesses include being rigid, not having enough money
to invest in research, struggle to have the right leadership the threats include other
companies and their finances. A strength is an advantage we already have a weakness
is a disadvantage we have, a threat is a potential disadvantage macro-factors we can
not control and opportunities are macro-factors that can potentially improve our
performance (Lim & Kim, 2014).
Cost-Benefit Analysis
It involves a business evaluating the benefits and the costs associated before
making a decision (Kenton, 2019). Benefits in carrying a cost-benefit analysis(CBA)
include increased sales and revenues, competitive advantage over peers and improved
benefits for employees (Frost, 1977).
A CBA is needed before research on new toys and products, purchase of raw
materials to be used, before deciding on the modes and means to transport and
distribute the toys and before working on the designs. Decisions such as deciding
whether to build a very durable toy or one with medium life is subject to a CBA, in this
case a business will look at whether the cost to make durable is too big on the company
or whether even if they’re very durable customers won’t need to buy new ones and how
long customers stay with toys on average.
IMPLEMENT INNOVATIVE PROCESSES
Action Plans

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To improve efficiency improvements need to be made in manufacturing, staff
management and education, research departments, improvements in planning
processes and marketing processes. An action plan outlines actions needed to reach a
goal ("Action Plans: Small-Scale Planning", 2019). Our action plan will involve
identifying, analyzing and delegating the tasks. In this study, I have developed an action
plan for communication and transition.
The communication action plan will require us to identify the purpose, audience,
message and anticipated obstacles in developing the action plan (Candlin & Sarangi,
n.d.).
Action Plan: Staff influence in implementation
Action Objective
Staff working in clearly defined shifts,
those not working won’t be in the factory
grounds
Increase Productivity, reduce time
wastage
Staff Meetings to work on processes to
decrease errors
Reduce wastage
Staff specialization as production or
process workers
Improve product sustainability and to
make full proof production
Subdivision of staff into teams Reduce staff turnover and improving skill
level
Staff Training: technical,motivational and
inspirational training.
Staff motivation and quality from staff.
Safety training is necessary to protect
staff in production and distribution
especially.
Involvement of all staff in setting targets
and objectives
Improves accountability and motivation.
Table 1.1 Action Plan: Staff influence in implementation table.
Action Plan: Managing costs
Action Objective
Lower expenditures Keep the costs low and improve
profitability

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Efficient timing in marketing Reduce frequency of advertisements has
a cost benefit, but timing the
advertisements in the best ways improves
the performance
Improving employee skills and staff
retention
Reduces need to outsource services
cutting down on costs, having experts
reduces the time wasted and number of
people needed for a role.
Cost benefit analysis To decrease losses
Table 1.2 Action Plan: Managing costs.
Contingency Plans
A contingency plan is a “plan B”, it is only used if the primary plan doesn’t take
off(Hughes, 2018). Creating a contingency plan for A.C will involve identifying the risks,
drafting and revisiting the plan.
Evaluation and continuous improvement schedule.
It is vital to be flexible and adaptive to change inorder to be a successful
business (Brownlow, 2000). It’s important to evaluate the current contingency and
action plans in order to ensure maximum productivity, minimize costs and to minimize
risks. Continuous improvement is a continuous process, it is part of routine (Dunn,
2019). It involves establishing the plan, executing activities, comparing to see if goals
have been met and developing new goals. Evaluation is basically observation, it is
important to reduce risks, improve accountability and to influence the policies (Sandor,
2018).
References
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