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Developing framework

CASE STUDY Assessment 3

REQUIREMENTS: Please read the scenario below, the attached fact sheets and articles. Assessment Tasks Your task as a group is to take on Stephen’s role in developing a framework that would address all aspects of the task at hand. ? ? ? outline broadly the risk exposure to Big Wet as a company, and develop a plan to meet the increasing demand for spring water. develop an action plan how to turn the negative attitude of politicians, neighbours and farmers around. design and provide a schedule to implement a strategic plan to deal with these issues, now and in the future.

BACKGROUND: After graduation from Curtin University, Stephen joined a multi-national beverage company. After gaining experience in sales and marketing roles in the local market Stephen accepted an international post which exposed him to a huge variety of challenges and experiences not only in the sales and marketing area but in all facets of the business. Stephen decides to return to WA and assumes the General Manager role at Big Wet, a spring water company which is owned by the multi-national beverage company. Big Wet had been acquired a couple of years ago. Big Wet has been underperforming in WA and employee engagement has been fairly low. After an initial period of understanding and learning the business Stephen starts formulating an aggressive business plan to lead the WA business on a growth path. Stephen makes organisational changes, focuses on regional WA to participate in the mining boom, deploys aspects of CSR and starts the journey to improve employee engagement. One of the CSR projects Stephen embarked on was to become a sponsor of Neighbourhood Watch. This sponsorship was not of a monetary involvement but in kind. Stephen managed to convince Neighbourhood Watch that their ‘eyes and ears’ of the sales and distribution team made a helpful contribution to keep the local neighbourhoods safe. It was calculated that the provided value to Neighbourhood Watch was in access of $500,000. In addition this sponsorship improved the employees’ perception of their own organisation and it provides Stephen with an opportunity to test employee’s potential by giving them the opportunity to run projects with Neighbourhood Watch. The new approach to the business results in a turnaround and the performance is improving significantly in all areas. Sales are on the rise and in the current year it is expected to sell more than 25 ML with a sales projection of increases between 6 and 7 % for the following years. Last summer sales were already exceeding the capacity of the current water source and for the first time Big Wet had to top up their supply from the back-up water source which is owned by the mother company. Taking water from the back-up source however a complicated process is and requires tremendous planning and organising. The usual flexibility is sacrificed and more importantly
© Copyright – S.Thomas – 2014 Resonanz Consulting, Stirling, WA 6021 [email protected]. All rights reserved. No reproduction without permission of the author.

every time water from the back-source was used the complaints about water taste issues increased. Due to the significant growth in sales coupled with the decreased rainfall in WA there is a danger of over utilizing the water source as well as breaching the constraints issued by the local government. The already increased truck traffic has prompted a number of neighbours to file complaints. In addition the local government received complaints from neighbouring orchards that their water supply has been diminished. I. Stephen has applied for an increase of the water licence of the current water source but the council rejected the application. Please find below an excerpt of the council’s reply: In the circumstances the council has decided to uphold the appeal in part and approve the removal of an average of ten (10) 28,000 litre tanker loads of water per week with a ceiling of fifteen (15) 28,000 litre tanker loads of water per week. This approval is also subject to such other conditions as the City of Barmadale might reasonable impose on a development of this type. II. Extensive analysis conducted showed that blending of the water from Big Wet’s water source and the back-up water source results in a chemical reaction and leads to taste issues Taking water from the back-up source leads to higher costs due to the further distance of the source and the higher per L costs Some neighbouring residents have been lobbying their local politicians and wardens to not only revoke the decision provided above but stop taking water from the source altogether

III.

IV.

NOTES: The scenario outlined above, while not specific to one organisation, reflect directly my experiences that the presentation of the case or other managers have faced. The issues raised are not limited to, or even indicative of, Western Australia, but to greater or lesser extents can face organisations from any sector operating anywhere, even Australia.

Additional Information:
2010 WA No of bottles million litres 1,400,000 21 2011

2014 – 2017 Projected Water Sales 2012 2013 2014
1,600,000 24 1,750,000 27 1,855,000 28

2015
1,965,000 30

2016
2,050,000 31

2017
2,150,000 33

1,470,000 22

Source Data
Total annual requirement Available Capacity – Extraction Licence Address of source of water Peak demand extraction per day Number of Bores and Licence No.’s Flow rate of bores Contract period of water source Water Cost Freight Cost (Freighting Water in) B-Double or/and semi Water Transport – Leased/Owned or Contractor Volume of Tanker Tanker Trip time incl load/unload Source Storage Capacity – Ltrs Type of process at source Back up water source

Western Australia Big Wet
30 million litres 25 million litres Lot 10 200,000 litres 1 x Bore ( council restrictions) 3 litres/sec 2022 0.65 cent/litres 1.5 cent/litres single

Back-up
300million litres unlimited Lot 100 750,000 litres 3 x Bore (not individually licensed) 7 litres/sec 2038 1.85 cent/litres 3.4cent/litres

2 Semi-Trailer tankers Leased tanker – contract Leased tanker – contract driver driver, 3rd party operator 29,000 litres 2.75 hrs 60,000 Filtration + UV recirculation mother company up to 50,000 litres 4.5 hrs 0 Filtration + Chlorination Big Wet

Restrictions:
Current source: truck movements max 3 per day, avg 10 / w with a ceiling of 15 / w Back-up source: give 4 weeks’ notice due to different extraction process and treatment on site

1ST STAGE OF ANALYSIS REQUIRED FOR TESTING OF WATER
Name and Contact Number

Date of results

Analyse pH TDS (total dissolved solids) Conductivity (uS/cm) Coliforms E.coli Total Plate Count Iron Manganese Magnesium Aluminium Calcium Lead Nitrate (as NO3) Nitrite (as NO2) Phosphate Chloride Potassium Sodium Colour/appearance (PCU) Turbidity (NTU) Bicarbonate Bromide TOC (total organic carbon)

Result

Water Source Checklist
Approvals: ? ? ? ? Details of extraction licence (volume/licence number) and operational conditions What council is the approver? Current water analysis. (need updated analysis, current is several years old) Any hydro & environmental reports.

Property Location and access. ? ? ? ? ? ? ? ? ? Distance from production plant. Current landuse of property Details of landuse of neighbouring properties Location of bore on the property Use of land surrounding the bore (fruit, market gardens or livestock etc) Number of water bores or potential to add additional bores. Easy access for tanker – both single & b/double tankers Is access road sealed or gravel Any operating restriction for tanker access.

Bore Information and construction. ? ? ? ? ? ? ? ? ? ? ? Pictures Yield of water into bore (sustainability) Current extraction flowrates. (bore to holding tank) Any bore construction details/report. Ie: Type and diameter of internal casing, depth of bore. Details of infrastructure for storage. Pre treatment processes??? Type of storage tanks (construction materials, flat/sloping base) Volume of holding tank or tanks. Material used for piping and valve works. Details of any pumps. Model numbers and construction material. (stainless steel, mild steel?) Type of power available (240v single phase/415v 3 phase) Bore and storage area protection/security. Bore run off contamination protection????

Perth’s low rainfall puts stress on supply
By Natasha Harradine Posted Wed 25 Jul 2012, 5:06pm AEST

Photo: Reduced run-off has seen levels drop at Canning Dam. Map: Perth 6000
It is mid-winter and WA’s dams are less than a third full. With the state set to record its driest July since records began in 1876, there’s little chance much will change in the next few weeks. Although Perth uses water from a number of sources, including desalination and groundwater, dam levels are still closely monitored because that water currently contributes up to 50 per cent of the drinking supply. A system is being trialled to treat wastewater to recharge groundwater supplies but that won’t be operational until next year, if it is given approval by the Government. The Water Minister Bill Marmion says dam levels have dropped markedly. “Historically, you’d get 300 or 400 billion litres a year that would fill our dams,” he said. “Now, we’re down to, on average, about 100 billion but two years ago we only got 13 billion litres.” So far this year, only 5.2 billion litres of water has come into the system and no rain is forecast in coming days. Perth has received 27.8 millimetres of rain this month when the long term average is 169.6 millimetres. The previous low was when records began in 1876 and the city received 61.5 millimetres. CSIRO’s Don McFarlane says rainfall has fallen 10 to 15 per cent from the mid 1970s. “The rule of thumb generally is for every one per cent reduction in rainfall you get about a three per cent reduction in run off, so it’s a three-fold increase in a proportional change,” he said. “It’s probably more than that now as the catchments have dried out and the groundwater levels in the surface water catchments are now much lower, in some cases 10 or 15 metres lower, than they were in the 1970s. “So that for the same amount of rainfall now, we get a lot less run-off in those dams.” While dams were Perth’s major drinking water supply four decades ago, altered rainfall patterns mean they are no longer a reliable source.
© Copyright – S.Thomas – 2014 Resonanz Consulting, Stirling, WA 6021 [email protected]. All rights reserved. No reproduction without permission of the author.

Dr McFarlane says as a result, the management of the water supply has had to change. “If you go back to the 70s, most of Perth’s drinking supply came from dams and there was only a small proportion coming from groundwater,” he said. “That’s swapped over completely now, we’ve got most of the water coming from groundwater and a very small amount from dams.” Unsustainable The state has moved to rely more heavily on groundwater for the integrated supply. Mr Marmion says the majority comes from the Gnangara groundwater system which is made up of four aquifers. “The last couple of years we’ve drawn very close to the maximum allowable by the Department of Water with 165 billion litres from the Gnangara mound,” he said. “That’s not sustainable, the advice I’ve got is closer to 120 billion litres is probably the more sustainable yield from Gnangara mound and unfortunately that’s had an impact on some of the environmental areas, the wetlands of those areas.” However, Water Corporation is not the only user of the Gnangara source. In fact, 80 per cent of the state’s total supply water, from a number of surface and underground sources, is used for irrigated agriculture, mining, services, industry and parks. Dr McFarlane, who is the CSIRO’s Perth-based coordinator of Water for a Healthy Country project, says WA’s heavy reliance on the superficial aquifers that are part of the Gnangara source have left an environmental legacy. “It’s been quite a profound change, a lot of lakes have dried up,” he said. “A lot of people my age or more will probably remember there were a lot more lakes around Perth. That’s probably had quite a profound effect on things like waterbirds and tortoises and things like that that lived in those lakes. “A lot of that has gone not as well recorded and reported as I would’ve liked as it’s happened over a period of decades rather than a sudden change.” Recharging A three year trial, which will finish later this year, is looking at using treated wastewater to replenish the stressed Gnangara mound. Mr Marmion says other countries use treated wastewater for drinking supply, however, WA currently discharges its treated water to sea. “Next year, if the trial gets approval, we’ll actually be able to draw water out of the Gnangara mound, from the Leederville aquifer which is a deep aquifer, for water that we’ve actually put into the aquifer via the recharging,” he said. “Any extraction from the Gnangara mound will actually be from deep aquifers so there’ll be no drawing on the superficial aquifer which actually does impact on the wetlands in the Gnangara area.” The State Government and Water Corporation have been working towards longer term plans to ‘drought-proof’ Perth and reduce its heavy reliance on groundwater. This has come via the construction of two seawater desalination plants, the first of which came on-line in 2006. Water Corp spokeswoman Clare Lugar says WA would have been in a very ‘concerning’ situation if it had not built the plants. “It’s meant we haven’t experienced some of the really draconian water restrictions that people in the eastern states had a couple of years ago over there with total outside watering bans,” she said.
© Copyright – S.Thomas – 2014 Resonanz Consulting, Stirling, WA 6021 [email protected]. All rights reserved. No reproduction without permission of the author.

“We’ve been fortunate here that we’ve stayed ahead of the game and that we were the first Australian state to build desalination and the rest have followed what we’ve done.”

Higher costs The Minister says the desalination plants will soon supply half of the state’s drinking water supply. But, desalinated water and treated wastewater come at a higher financial cost. Water supply charges rose 6.8 per cent in the latest budget and Mr Marmion says they are becoming more reflective of the real cost of supply, although are still below the “cost reflective price” suggested by the Economic Regulation Authority. Mr Marmion says while work is being done to find new sources of water, West Australians must still reduce their water use. “We are probably the biggest user of all states,” he said. “We are fortuitous to have groundwater and we have probably bigger gardens than other states. “We’re used to expending a lot of water on our gardens; in fact, it can be between 40-50 per cent of drinking water that Water Corp produce is wasted on irrigation of people’s backyards and flowers. “So, there is an education process we have to go through. “Apart from bringing the cost of the consumers’ bill down, it means we don’t have to find as many water supply sources, bring them on as the population grows, it reduces our need to supply more water.” http://www.abc.net.au/news/2012-07-25/low-rainfall-in-perth-puts-stress-on-supply/4154438

Understanding groundwater
Groundwater is a critically important resource in Western Australia. The allocation and conservation functions of the Department of Water are closely related to groundwater as it supplies much of the water we need for irrigation, drinking and other uses. In the Perth region, part of the Swan Coastal Plain, the superficial aquifer averages about 50 metres in thickness. The Gnangara mound occurs to the north of the city (between the ocean, the Swan River, Ellenbrook and Moore River, and is centred about 15 kilometres north-east of Wanneroo). The smaller Jandakot mound occurs to the south (between the ocean and the Swan, Canning and Serpentine rivers). Below the superficial aquifer there are a number of confined aquifers, the largest and most extensive of which are the Leederville, which is typically several hundred metres thick, and the Yarragadee, which is often greater than 1000 metres thick. Water is lost naturally from the superficial aquifer by evaporation from the ground surface and lakes (which generally occur in a depression where the water table rises above the ground level), by transpiration from plants, especially trees, and by the slow movement of groundwater to springs, rivers and the ocean. The water within the shallow aquifer is extracted not only by the Water Corporation for scheme water, but also by householders for their gardens, by industry, by local authorities, institutions and golf courses to water lawns and gardens, and by market gardeners and horticulturists.
© Copyright – S.Thomas – 2014 Resonanz Consulting, Stirling, WA 6021 [email protected]. All rights reserved. No reproduction without permission of the author.

A smaller volume is drawn from the confined aquifers, mostly by the Water Corporation, since the required bores are much more expensive than those tapping the superficial aquifer. Where the water table is close to the surface in agricultural or housing areas, drains are often installed to control the maximum height of the water table, with the excess water being directed via pipes or open channels to lakes, rivers or the ocean. Drainage in the region around Perth removes more water than all the bores in the superficial aquifer in the same area. In areas close to the coast and the Swan River estuary, the fresh superficial groundwater overlies a wedge of salty water extending up to a kilometre inland. Excessive pumping from bores in these areas can increase the size of the salt water wedge at the expense of the fresh water, so that the bores start to pump salty water. Once this occurs it can take decades with no extraction before the system can recover. Similar potential problems occur at Carnarvon and other country areas.

What’s the difference between spring, mineral, bottled, tap, purified water?
Mineral and spring water are similar. Mineral water has a higher mineral content. They both come from underground sources; mineral water is generally carbonised / over 500 parts per million dissolved minerals. Bottled water can be any type of water and requires to be labelled that is bottled under the Food Act. Tap water is supplied by local municipal authority and is generally surface water (rivers, lakes, dams). Filtered water is tap water with a filtration system
http://www.water.wa.gov.au/Understanding+water/Groundwater/default.aspx

http://www.nhw.wa.gov.au/

Some literature that might guide you while conducting your research for this assessment.

Harvard Business Review blog
Martin (2010) states: People make strategy much harder than it needs to be. For some, the problem is that they focus too much on the tools: environmental scans, SWOT analyses, customer analyses, competitor analyses, financial modelling, and so on. Other people get into trouble because they think it is all about the broad, conceptual, future-oriented, big picture issues — not to be confused with tactics. Still other times, people think that strategy is what happens when we think about changing directions. The reality is that strategy is at some level about all those things, and you cannot do a satisfactory job with your analysis alone, or your big picture alone, or your changes alone. You have to do a bit of work on all of them. That’s actually a lot easier than it sounds. Martin’s (2010) preferred approach is to treat strategymaking as developing a set of answers to five interlinked questions. The questions — which cascade logically from the first to the last — are as follows: 1. What are our broad aspirations for our organization & the concrete goals against which we can measure our progress? 2. Across the potential field available to us, where will we choose to play and not play? 3. In our chosen place to play, how will we choose to win against the competitors there? 4. What capabilities are necessary to build and maintain to win in our chosen manner? 5. What management systems are necessary to operate to build and maintain the key capabilities? http://blogs.hbr.org/2010/05/the-five-questions-of-strategy/

Stefan R Thomas Stefan has in excess of 25 years of experience within the Fast Moving Consumer Goods industry (FMCG) – working in senior General Management, State Management and Major Account Management roles nationally and internationally – predominantly within the Coca-Cola organisation, with additional experience gained within Ford Motor Company, Huhtamaki, Cargill and McDonald’s. Stefan is a founding partner of Resonanz Consulting a dynamic business consultancy committed to innovative, principled business strategies that utilise clients’ core strengths and goals – facilitating sustainable, long term growth and profit. Stefan is helping business owners strategically increase their profits through thorough planning, research, and competitor and customer analysis. Stefan also shares his knowledge and experience through his lecturing at Curtin University and various public speaking engagements. Stefan also enjoys providing his support to students at AIESEC at the University of Western Australia and Curtin University – having been an educational and key-note speaker to numerous events over the last years, as well as serving on a number of boards of no-for-profit organisations. Some of Stefan’s major achievements and highlights within his career include winning State of the Year for four consecutive years as General Manager of Neverfail (a division of Coca-Cola Amatil). Stefan achieved ‘Best new product launch McDonald’s Europe 2002’ for The Coca-Cola Company, and ‘Silver Award for best retail promotion campaign 1995’ for Coca-Cola Germany. Stefan was also instrumental in establishing the Coca-Cola business in former East Germany, after the fall of the Berlin Wall.

Case Study

Assessment Tasks
• outline broadly the risk exposure to Big Wet as a company, and develop a plan to meet the increasing demand for spring water • develop an action plan how to turn the negative attitude of politicians, neighbours and farmers around • design and provide a schedule to implement a strategic plan to deal with these issues, now and in the future
o Any funds for planned activities have to be covered by Big Wet, no additional funds will be made available by the mother company o Assume the issues with the water source happened last summer and your plan has be to activated and operational by the beginning of the coming summer
SRT – Guest Speaker – Case Study