Tim Bortolli, Kate Johnson, and Renee Nguyen were approaching exhaustion as
they completed their second straight day of 12-hour meetings. Tim and Kate were
joint owners of TK Ceramics, a small business they started together after leaving
university. TK Ceramics had grown to become Victoria’s largest importer of
European ceramic tiles, now operating from a 4500-sq-m warehouse in Port
Melbourne, with 70 staff. Renee holds the newly created title of General Manager of
HR; the title reflecting the impending growth of the company. The long days of
meetings were due to the immense amount of planning required to put in place due
to the next phase of the company’s growth. TK Ceramics had enjoyed a lot of
success in importing tiles from Italy; the European styles, designs and colours
translating well to the culturally diverse Melbourne market. Rather than sell to the
public, TK Ceramics sold wholesale to bathroom stores all over Victoria, and
collaborated with a few exclusive architects who worked with high-end renovations.
Twenty-two field sales representatives continuously worked their large retail
customer base, and a further 28 staff worked in the warehouse – unpacking,
checking, and shelving incoming stock, as well as preparing shipments for the
company’s delivery fleet four times a day. Another 20 staff worked in the office, in
roles such as customer service, finance, accounts and administration.
However, a year ago, Kate had been on a sabbatical in Jakarta Raya, Indonesia,
taking a motorcycle tour with her partner. While taking a ‘back-roads’ tour one day,
she had come across a small tile factory that produced plain ‘standard’ tiles, and not
being able to fully disengage from work, asked to meet the owner.
Kate spoke with the owner, Alatas, all afternoon, toured his facilities and made a
promise to be in touch as soon as she returned home. She was very excited about
the opportunity to develop a new supplier. While sales of European tiles were still
strong, they were expensive, and they had to carry a lot of stock to cater to the wide
variety of tastes in Melbourne.
Alatas’ factory represented a chance to supply tiles to the mass market – new home
building companies, commercial installers, hospitals, shopping centres and so on,
where design was less important than price and functionality.
Tim and Kate decided to go for it, and met with their bank and business advisers to
plan the expansion, and hired Renee to develop and execute the HRM strategies.
They decided to launch the new business stream through a new, wholly owned retail
network, a radical departure from their existing business model. In addition, they
were going to create a new brand for their shops. They had decided to maintain their
current business and its relationships under the identity of TK Ceramics. They had,
however, adopted the strategy of ‘multiple presences’ and were determined that their
new business stream wouldn’t dilute their existing one.
Renee was now immersed in the HRP (Human Resource Planning) process to
execute the new strategy. She needed to design a structure which clearly separated
both supplier and customer-facing staff into the separate streams, but could also
make use of the existing warehouse infrastructure for both.
Further, she had a mission-critical task to complete before anything else.
All ceramic tiles sold in Australia must meet strict Australian Standards – ISO 13006:
1998 for Definitions, Classification, Characteristics and Marking (the product
standard), and ISO 10545 Test Methods.
Preliminary investigations of the product produced by Alatas’ factory showed that
while the tiles were generally good, there was too much variation in size, surface
finish and strength to consistently meet the standards. Testing each batch in
Australia and rejecting non-compliant tiles was too expensive and wasteful. The
quality control had to take place in Jakarta Raya. Alatas was very happy to do this,
as the new deal with Tim and Kate would result in a near-doubling of his output.
However, Tim, Kate and Renee had concerns that the expert human capital required
to design, implement and monitor the quality procedures in Alatas’ factory weren’t
available in Indonesia. They had just decided to recruit and send an expert from
Australia to Indonesia to embed into the factory for a year, to ensure that there were
no problems with standards compliance and wastage at the Australian end.
Tim hadn’t needed to do this before. Most of the Italian tiles they imported were
already tested and compliant with the strict EU standards, and Tim’s Italian heritage
and language skills made communicating their needs to suppliers in Italy, with phone
calls and an occasional visit, very effective.
Renee’s list of jobs was growing rapidly. Not only did she have to prepare to staff the
seven launch stores, but she also had to redesign the workflow of existing staff to
support the ‘multiple presence’ strategy. She also needed to find just the right person
to send to Jakarta Raya.
[Note: This case study is retrieved from Nankervis et al. (2020). Human resource
management: Strategy and practice. Cengage Learning. It is Prepared by Stephen
Turner, Murdoch University, Perth. 2002EHR assessment use only.]
