Australian Hardware Limited: Six Sigma Continuous Improvement Plan

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Added on  2022/09/01

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This report presents a continuous improvement plan for Australian Hardware Limited, focusing on enhancing its sustainability and operational efficiency through the implementation of a Six Sigma strategy. The analysis identifies key areas for improvement, including weak revenue per customer interaction strategies, faulty marketing segmentation, limited customer satisfaction measurement, and poor lead time management. The proposed plan involves a five-step process that emphasizes communication with customers, lead generation, inventory management, and repeat business. The plan also highlights the importance of coordinating all business aspects using a Six Sigma approach and stresses the need for management support, employee participation, and a strong work culture to ensure continuous improvement. The report references various stakeholders, the importance of knowledge management, and alignment with sustainability policies and performance management strategies. The plan also recommends the use of various communication strategies to monitor and improve operational progress, including metrics, process mapping, and different types of diagrams. Finally, the report emphasizes the need to record and report team performance and incorporate information into future planning to cover all the elements of planning and ensure input from all levels of the organization.
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Australian Hardware Limited-Continuous
Improvement Plan using Six Sigma
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Sustainability across the
organisation
Purpose-is to establish Australian Hardware as a socially responsible
company in Australia.
Scope-Management, employees and suppliers
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Sustainability across the
organisation contd…
Responsibilities of management: The responsibility of formation,
implementation and monitoring of the sustainability policies is shared
by the management and the employees of Australian Hardware.
Responsibilities of employees:
The employees are responsible for complying with the
sustainability policies and norms laid down by the management of
Australian Hardware.
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Sustainability across the
organisation contd…
Sustainability principles:
Taking prompt actions to minimise environment risks
Ensuring fairness of the operations
Using natural resources sustainably
Contributing towards persevering of biodiversity of Australia
Ensuring of economic and social wellbeing
Strengthening the local community
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Sustainability across the
organisation contd…
Waste management:
Implements the strategies of avoidance and minimising, reuse,
recycle, recovery and disposal depending on the types to be recycled.
Ensures the wastes which are generated as the outcome of the
operations are reused to a feasible extent and they have minimum
impact on the environment.
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Revenue per customer interaction
Australian Hardware lacks a strong revenue per customer interaction
strategy.
The company has no well laid down strategy to ensure that the
interactions between the customers and the marketing department
are aligned to the business needs of the company.
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Operational costs
Australian Hardware aims to increase its profit generation and reduce
its operational costs.
The performances of the employees are aligned to the performance
of the company.
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Customer service satisfaction across product
areas such as timber, plumbing and electrical,
garden products, hardware, tools and homewares
The ‘Risk Management Action Plan’ of Australian Hardware Limited
clearly mentions that company has a ‘Customer complaint
monitoring’ system to monitor customer complaints and customer
satisfaction.
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Delivery lead times for customers
Australian Hardware Limited has to mechanism to ensure that the
delivery lead time for customers.
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Overall continuous improvement
plan
Finding 1. The sustainability policies of Australian Hardware is extremely strong. However, it is not
connected to the other aspects of operations like marketing of goods.
Finding 2. The revenue per customer interaction strategy is extremely weak. This is because the
marketing segmentation strategies of the company is faulty. The market segmentation strategy of the
company does not consider individual customers which means that the company has no direct access
to the domestic customers’ base. The case study also shows that the marketing department of the
company does not consider repeat business as an important method of generating revenue. Thus, the
revenue which the company generates per customer is extremely low.
Finding 3. The method which Australian uses to measure customer satisfaction is limited to using
questionnaires and customer complaint monitoring. The customer service strategy of the company
does not consider visiting the existing customers by the marketing staff members to gain information
about new requirements, cater to them and generate revenue.
Finding 4. The lead time management strategy of the company is extremely weak. This is because the
company does not consider proactive communication with customers to know about their expectations
and needs important.
Finding 5. The operations of Australian Hardware Limited lack coordination. This calls for
implementation of six sigma to make the operations more efficient and coordinated to bring about
continuous improvement in the process.
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Implementation of the continuous
improvement plan by using Six
Sigma Step 1. The marketing staff of Australian Hardware would communicate with the
customers (including individual customers) to gain information about their needs. They
would also generate leads for sale of goods.
Step 2. The marketing department would communicate the leads generated to the
procurement department.
Step 3. The procurement department checks if goods ordered are available in the
inventory.
Step 4. The marketing staff post sales of goods maintain communication with
customers to know about their new requirements. They should repeat step 3 to
generate repeat business and generate more revenue per customer interaction.
Step 5. The inventory department should report goods which remain unsold owing to
cancellation of orders for more than 30 days from the date of procurement. The
perishable goods like plants and timbers should be recycled to the feasible extent as
per the sustainability policies of the company. In other words, all the four aspects of
business of Australian Hardware should be coordinated using six sigma strategy.
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Other requirements for the
continuous improvement plan
The management of Australian Hardware should adopt strategies to
include participation of appropriate employees in the implementation
of the six sigma strategies to facilitate the continuous improvement
plan.
The management of the company should take steps to build
ownership and a strong work culture to enable continuous
improvement, reduce wastes and enhance performance.
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