BSB60520 Advanced Diploma of Marketing and Communication

BSBSTR601 Manage innovation and continuous improvement

Assessment 1
Student name:
Student ID:

- Write a report (in report format) on the following things (2,000 – 3,000 words):
Key systems and processes used by AC Gilbert

o Supply chain
o Operational systems
o Product/service delivery
- Analyse the three key systems and conduct a gap analysis (table
provided below)
o Key Results Areas (KRA)
 Customers
 Financials
 People
 Processes
o Key Performance Indicators (KPIs)
o Performance review process
- Monitoring and measuring processes
o Supply chain
o Operational systems
o Product/service delivery
- Analysis of performance and variance to plan and targets
o Quality – design/manufacturing
o Sales
o Profit
o Supply chain performance (delivery)
o Business growth – staff and management performance and/or turnover
- Trends
- Strengths and weaknesses prior to 1960
- Stakeholder consultations
o Internal stakeholders
o External stakeholders
(Start report here)
 Table of Contents
The key system and processes used by AC Gilbert...........................................................2
Supply chain:..........................................................................................................................2
Operational system:...............................................................................................................2
Product/service delivery:.......................................................................................................3
Analyse the three key systems and conduct a gap analysis (table provided below)............3
Monitoring and measuring processes...................................................................................3
Performance review...........................................................................................................3
Service level agreement:........................................................................................................4
Analysis of performance and variance to plan and targets...................................................4
Business growth-Staff and management performance or turnover:....................................4
Trends.....................................................................................................................................5
Strengths and weaknesses ....................................................................................................5
Stakeholder consultations.....................................................................................................5

AC Gilbert- Assessment 1
The key system and processes used by AC Gilbert

Supply chain:

The supply chain used by AC Gilbert represents the design, planning, purchasing, manufacturing and
distribution activities of an organisation then toys are stored in the warehouse. But in this supply chain all the
stages depends upon each other, if one component of the chain fails ,the whole chain is broken and they did
not get their goals.

Operational system:

In this system toys are designed by a small group of designers

then the planning department translation the concept into design and determine resource requirements
including raw material. It also projects sales and develops production plans for each product, timeframes and
scheduling of production ` runs. After this purchasing team takes the information from planning to purchase
raw materials for products and packaging from suppliers. Manufactures produces and packages toys for
distribution. On the last packed toys delivered to the warehouse for storage.

Product/service delivery:

For product service delivery he had a sales team who took order from customers, on the next stage they make
arrangements for deliveries of goods and at the last they sell the toys directly to the end customers.

Analyse the three key systems and conduct a gap analysis (table provided below)
KRAs:

1. Customers: Changed the focus from traditional boy toys to preschool children’s, dolls and other toys.
(1962)
2. Financial:
 Achieve sales of $20 million for 1963(in 1962)
 Increased advertising spending to $3 million in 1966 Reduce the price of core lines such as erector
set from $75 to $20.
3. People:
 Replaced existing executives with his own people.(1962)
 Hires new CEO-Isaacson (1964)
 Instructed sales staff to adapt an aggressive sales approach.
4. Processes:
 Change the packaging for all lines to brighter, more colourful boxes(1962)
 Implemented extensive television advertising
KPIs:
1. Increased sales staff by 50%(1962)
2. To achieve sales of $20 million in 1963
3. Spend $1 million on changing the packaging
Monitoring and measuring processes
Performance review
From the year 1961 to 1967 there was a huge cultural change across the world. It was a time of rapid change
both technologically and culturally so it made a huge impact on toy market. As a small, traditional company
AC gilbert could not react these changes so sale dropped and the share price also fell down. As a result
television produce Jack Wrather purchased 52% of AC Gilbert for $4 million and set his own KPIs and KPIs in
the year 1962. In this year company recorded a loss of $281,000.00. In the year 1963 again sales and profit
down on previous year and Jack Wrather hire a new CEO named Isaacson. He made huge changes in the
company but due to the lack of staff they were unable to implement changes. They borrowed a $6.25 million
but in the year 1966 company made a loss of $12,872,000.00.At the end in February 1967 AC Gilbert closed
its door after 58 year.

Service level agreement:

When AC Gilbert start his company then he have a good reputation and service of their company so the
customers were happy but as the time passes then they could not meet the customers expectation that were
changed due to culture and tradition and in the year 1965they could not deliver the stock to stores until after
Christmas. As a result at the end they had to close their company.

Analysis of performance and variance to plan and targets

Quality: When AC Gilbert started his company then the quality of toys was very good and the customers were
like it. But in the year 1963 quality declined. They made some changes like they start using Cardboard boxes
instead of metal boxes and brittle parts instead of sturdy long lasting parts in 1964.So he failed to fulfil the
customers need and expectation.
Sale: Even he could not achieve his goal in sales .According to figure in the year 1950 they have an annual
sale of $17 million per year but as the time passed it is totally changed. In 1961 they had a target to get a sale
of $12.6 million but they could get only $11.5 million and same thing happened in the year 1963 then the
target was $20 million but they can achieve only $10.7 million.
Profit: When we talk about profit then we can see that in the year 1961 they had a profit of $20,011.00 that
increased up $5.7 million in the year 1963 but then it start decreasing and in the year 1966 profit decreased
up to $12,872,000.00.
Supply chain performance (delivery): in 1965 they could not delivered the stock to stores until after
Christmas.
Business growth-Staff and management performance or turnover:
when AC Gilbert could not handle the situation then Jack Wrather bought the company’s share up to 52% and
start making changes .He recruit new staff members but still in the year 1965 he did not have an enough staff
so he could not implement changes or introduce new lines quickly. He changed the method of advertisement
but didn’t get success.

Trends

According to figure in the starting the company have huge profit but from the year 1963 their Profit start
declined. It can be the same if

 He changed according to the culture and tradition and fulfil the children’s expectation. They made
some changes but expect the new things from existing engineer without giving any training.
 They should organise a training session for their employee to meet the new requirement. Moreover
they should use the proper method of advertisement.
 Action man and Barbie became popular
 Girls switched from baby dolls to modern, grown up and trendy dolls.
 Girls demanded boyfriends and cars for their dolls in addition to a desire of dressing themup in
latest fashion styles.
 Famous television shows and movies inspired boys and they switched from traditional train sets to
slot racing car sets.
 A new advertisement channel “Television” was introduced and increasingly used for marketing.
 AC Gilbert was not aware of above mentioned industrial changes

Strengths and weaknesses

Strengths: In the year 1950 this company had a good reputation and was getting profit $17 million per year
and making toys according to children’s needs and wants. So all the customers were happy. Employees were
trained in their work and getting training time to time. Advertising their product and attracting more customers.
PUTATION AC Gilbert earned higher market reputation for manufacturing high quality toys.
SALES Revenue of small company exceeded $17 million.
INNOVATION Invented Erected Engineering sets
PROFIT AC Gilbert was a profitable producer of educational toys
MARKET SHARE AC Gilbert was a leading toymaker in the United States
PRODUCTION, MANUFACTURING AND STABILITY AC Gilbert was producing high quality, solidly
manufactured and resilient microscopes, chemistry sets and Meccano like erector that were very famous with
kids for more than fifty years giving company sustainability and stability advantage.
CUSTOMER SERVICE STANDARDS Parts & packaging were durable and lasting for many years. Erector
sets were packaged in long lasting metal boxes that earned customer loyalty.
Weakness: The company could not change according to cultural and tradition. They didn’t fulfil their
customers’ expectations so they lose their reputation and decrease the sale because they don’t have an
experienced staff and even they didn’t organise training session for their engineer so they have to sell their
share and Company closed.

Stakeholder consultations

Internal

- Production, manufacturing staff: Tell them about customers’ needs and give them training to make toys
according new technology.
-Sales personnel: Consult with the salesman about recent sale and how they can
increase the sale.
- Human resources personnel: Consult with Human Resource manager to recruit a new staff or give training to
existing staff regarding new technology and trend.

External-Market consultants

-Advertising experts: Consult what method is useful for advertisement among

News-paper, television, magazine and etc.
- Engineers or designers: get an advice on latest design and trend, get a newd esign of toys according to
change in the cultural and customers likes.
- IT consultants: Get information regarding latest technology.

Key Result Areas Key Performance Indicators Performance review process

Customers Customer satisfaction rate Increase customer service 25%
rate
Increase customer service
satisfaction rate 50%

Financials Reduced productivity Savings of $300,000 per annum

Reduce staff turnover costs.
People to reduce staff turnover from an
average of 32% per annum to
in staff turnover costs.
Savings of $1 million per annum
in lost productivity and errors.
Savings of $200,000 per annum
in service and repairs costs to
equipment.
Training required
will include technical training,
 20% per annum, motivational training and quality
thus improving the skill levels and control procedures along with
efficiencies of the plant and goal and
reducing costs in recruiting and objective setting workshops.
training
new staff.
Processes Team members will only work on
to increase productivity and their specialty line, and rosters
reduce errors on production lines will be altered to ensure
by 20% by allocating specialist adequate staff on each line
team members to individual lines. during the 12-hour
production cycle. This may
involve changes to staff rosters,
in some cases by implementing
12-hour
shifts, but will not impact on
earnings or result in the loss of
any hours of work.