Management & Organization
Session 18-19
J0704-Business Plan
Day-to-day Methods and
Procedures
To succeed a business must
occupy a field of public
usefulness by producing a
good article at the lowest price
consistent with fair treatment
of all those concerned with its
production, distribution and
consumption – Walter
C.Teagle
J0704-Business Plan
The Elements of Operations
•Operations Summary
•Operations Description
•Human Resources
•Facility
•Production
•Supply and Distribution
•Fulfillment
•Customer service policy
J0704-Business Plan
The Elements of Operations
•Inventory control
•Efficiency Control
•Cash Flow control
J0704-Business Plan
Operations Description
•
•
•
•
Describe the business operation
If the business has division, list them in
their order of operations
If the business is manufacturing,
assembly or wholesale company, it is
more important to convey the complete
operational procedures
Explain the competitive edge
J0704-Business Plan
Human Resources
•
•
•
If the company is very small or is a homebased
business, skip this segment
If the company have or intend to have several
employees, develop some basic human
resources policies
Develop procedure for
–
–
–
–
recruiting,
new employee orientation,
training,
reviewing,
J0704-Business Plan
Human Resources
– salaries and benefits,
– standardized holidays,
– incentives and rewards
• As the final element of this segment, describe
any new positions to be created and eventually
filled that are in addition to those listed in
Management & Organization section
J0704-Business Plan
Facility
•
•
•
•
Describe your facility and location in term of
operational effectiveness
For home-based business, be candid and state
that the operation run from the home because
no need for the expense of an office.
State the advantages of your facility for your
specific business
Describe the main office and branches (if any)
J0704-Business Plan
Facility
•
•
•
•
Office layout
Cover the essential site
advantages
Briefly explain the facility’s
advantages over the
competition within market,
any cost savings
If you have a lease, explain in
term, advantages and
restrictions
J0704-Business Plan
Production
•
•
•
Examine all the company operations
involved to create, produce, buy or
handle the products or services to the
specifications and quality standards.
Explain average productivity the output
of total unit per day, week or month
The work force :
– Shop method
– Production-line method
J0704-Business Plan
Production
•
•
•
•
Supplementing the
work force
Equipment
Improving
production with
technology
Quality control
J0704-Business Plan
Supply & Distribution
•
Supply represents :
– Incoming material raw for a manufacturer
– Incoming parts for an assembly
– Incoming wholesale products for wholesale
and retail company
•
Distribution is the operation for the
outgoing finished products or services
J0704-Business Plan
Supply & Distribution
•
Describe the supply
operations:
– The sources
– Average cost per unit
– Credit term
•
Describe the
distribution operations:
J0704-Business Plan
Fulfillment
•
•
•
Describe your fulfillment operations, from sales
through delivery to your customer
If a start-up company will have an internal
order fulfillment operation, it’s necessary to
closely evaluate the process of preparing
products for shipping and delivery to customer
Cover the methods for rush order, breakage
control, safeguard for freshness, ensuring
accuracy, tracking, packaging and shipping
J0704-Business Plan
Customer service policy
•
•
Describe overall customer service policy
include the method used to train the
employees to monitor consistency, and to
survey customer opinion and attitudes
Describe the after-sale policies on
warranty, repair, returns and refunds
J0704-Business Plan
Inventory control
•
There are several inventory
management systems for the
purchasing cycle :
–
–
•
Economic order quantities (EOQ)
Activity-based costing (ABC)
Method for accurate record
keeping and assigning values:
–
–
–
–
–
Actual cost
Standard cost
Weighted average
FIFO
LIFO
J0704-Business Plan
Efficiency Control
•
To avoid the pitfalls of crisis management
and to develop operational procedures
for handling processes not part of the
daily routine, this is must be done
regularly:
– Annual business planning
– Pay attention to the larger issues
– The often unassigned operations
J0704-Business Plan
Cash flow control
•
•
Describe the cash
flow control policy
and
Explain the
procedure for
handling money
J0704-Business Plan