Innovative Widgets Scenario ‘Innovative widgets’ is the largest producer of widget in Australia. Established in 1952, its widgets areused as components in a broad range of machinery, from domestic appliances to industrial equipment. The company is family owned and run by the children and one grandchild of the founder,who collectively form the board of directors. Until recently, the grandchild had acted as a managing director of Innovative widgets. Innovative widgets operate from one location. There is a store area in the warehouse (for the raw materials used to make the widgets), a machine workshop (where the widgets are produced) and dispatch and deliveries area. The office block houses the following operational departments: •Purchasing•Sales •Accounts •Human resources •A recently established customer service team. In total, Innovative Widgets employs over 50 staff. Last year Innovative Widgets produced a pre-tax profit $2,240,000 on a turnover of 16,000,000. BSBCUS501December 2020VZ
Innovative Widgets has a diverse customer base. Their largest customer is a major mining equipment manufacturer. This customer accounts for approximately 40% of total widget sales. The other 60% of sales are medium and small businesses and to individuals and sole traders. The following is an excerpt from Innovative Widgets’ business plan. Business plan excerptVision statementTo keep every Australian business running smoothly using safe, quality widgets. Mission statement Innovate new ways of manufacturing and testing widgets Deliver consistently high-quality customer service internally and externallyKeep Australian businesses buying Australian widgets through quality products and second-to- none customer service Have the best safety record of any widget company.Specifications agreement with Yore Mine Co.When Innovative Widgets made an agreement with a local company Yore Mine Co. to be their main supplier of widgets, they agreed on some requirements for widget specifications and customer service. The long-standing agreement was made in 1958.Widget product and customer service specificationsWidgets must be safe for use:Able to take a load of force of 24 kilonewtons (kN)Every widget must be tested to half its rated strength (12 kN)1% of every batch must be tested until they break to ensure that they can take a load forcein excess of 24 kNAny widget, or quantity of widgets, that are accidentally dropped must be disposed of.