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Small Goods Pty Ltd is a manufacturer of various types of processed meats, including ham, salami and sausages - VCE - SSCE Business Management - Question 4 - 2017 - Paper 1
Question 4
Small Goods Pty Ltd is a manufacturer of various types of processed meats, including ham, salami and sausages. The Operations Manager, Heidi, is concerned about the ... show full transcript
Worked Solution & Example Answer:Small Goods Pty Ltd is a manufacturer of various types of processed meats, including ham, salami and sausages - VCE - SSCE Business Management - Question 4 - 2017 - Paper 1
Step 1
a. Describe the principles of lean management.
Answer
The principles of lean management focus on optimizing processes by eliminating waste and improving quality. Key principles include:
- Value: Defining value from the customer’s perspective to ensure alignment of production goals with customer needs.
- Value Stream: Mapping the value stream to identify all steps involved in providing a product to the customer, allowing for the identification of wasteful activities.
- Flow: Ensuring a continuous flow of production to minimize delays and bottlenecks.
- Pull: Implementing production based on customer demand rather than producing based on forecasts, to reduce overproduction.
- Perfection: Striving for continuous improvement through the elimination of waste in all forms, including time, materials, and energy.
Step 2
b. Explain how lean management principles might assist in the reduction of the level of wastage at Small Goods Pty Ltd.
Answer
Lean management principles can assist Small Goods Pty Ltd in reducing wastage by applying various strategies:
- Implementing Pull Systems: By utilizing a pull system where production is based on actual customer demand, the company can minimize excess inventory and overproduction, leading to wasted resources.
- Utilizing Takt Time: Calculating the appropriate takt time based on customer demand allows for a consistent production rate that prevents the accumulation of excess products that may expire.
- Zero Defects Philosophy: Adopting the Zero Defects principle involves rigorous quality checks during the production process. By preventing defects, the company can significantly reduce waste associated with rework and scrapped products.
- Value Stream Mapping: Analyzing the value stream can highlight areas where processes are inefficient or unnecessary, leading to targeted improvements and waste elimination.
Step 3
c. Analyze the impact that the reduction of the level of wastage may have on Small Goods Pty Ltd’s suppliers and one other stakeholder.
Answer
The reduction of wastage at Small Goods Pty Ltd can have several impacts:
- Impact on Suppliers: The suppliers may benefit from a more efficient procurement process; however, if Small Goods reduces its order quantities due to lower wastage, suppliers may experience reduced revenue. Conversely, they may benefit from long-term contracts that arise from the business’s improved reliability and efficiency.
- Impact on Shareholders: Shareholders are likely to see positive effects as waste reduction typically leads to lower production costs and higher profit margins. As the efficiency of operations improves, the business may reinvest the savings into expanding the production line, which could result in increased dividends.
Step 4
d. Justify one corporate social responsibility consideration that a business, such as Small Goods Pty Ltd, needs to address when implementing change.
Answer
One important corporate social responsibility (CSR) consideration for Small Goods Pty Ltd is sustainability. As the business implements changes to reduce wastage and improve operational efficiency, it must ensure that its practices are environmentally sustainable. This includes sourcing raw materials responsibly, minimizing the ecological footprint of production processes, and reducing waste by recycling materials whenever possible. By addressing sustainability, Small Goods Pty Ltd can strengthen its brand reputation, align with consumer expectations, and contribute positively to the community.
Step 5
6. Apply Lewin’s Three Step Change Model to assist Shandra’s Dairy Ltd with this future goal.
Answer
To assist Shandra’s Dairy Ltd in diversifying into the snack food market, Lewin’s Three Step Change Model can be applied:
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Unfreeze: This initial stage involves preparing the organization for change. Shandra’s Dairy Ltd would need to communicate the necessity of diversifying, highlighting potential market opportunities and threats in the current product line. Engaging staff and stakeholders in discussions around innovation can also build a collective agreement for the change.
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Change: During this stage, the company would implement the change by developing new products aligned with snack market trends. This might involve training staff in new production techniques, establishing partnerships with suppliers for new ingredients, and marketing strategies targeting potential customers.
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Refreeze: Finally, once the changes have been implemented, it is crucial to reinforce the new practices and ensure they become embedded in the company culture. Monitoring sales performance of the new snack line, gathering customer feedback, and adjusting strategies as necessary will help establish the new direction for the business.