COB 300 – Benchmark 2

The Operations Plan

Operations Section

“What operational processes will you establish to deliver goods/services?”

Once your business strategy is defined, look closely at your competitive priority/priorities:

cost, quality, delivery reliability, flexibility, speed.

These will be the basis for defining your operations strategy.

Points to Consider

• Will you produce a tangible product or will you be a service provider?

• Are you business to business or are you business to consumer?

• For how much are you responsible (i.e., do you subcontract out part or all of the fabrication/assembly process or service)?

• How do you ensure quality?

Points to Consider

• At what stage is the industry you’re entering (introduction, growth, maturity, decline)?

• Will you enter as a low volume, custom producer or will you need to have substantial capital investment for immediate volume capability?

• When do you expect to break even (volume of output and date) given your process design?

• How quickly will you move toward higher volume operations? What challenges or opportunities does this present?

Points to Consider

• Do you provide a customized (one of a kind) product or service or do you have a standard catalog listing of goods/services?

• How will you forecast demand for your product/service? How will that forecast help you operationally? How much error is there likely to be in that forecast?

• What is your finished goods inventory policy?• How will your operations capabilities lead to

competitive advantage (e.g., cost, quality, superior service, etc.)?

Points to Consider

• For Service Provider: Detail the flow of your operation (See Figure 7.9, page 259, Operations Management)Customer enters system Customer leaves system

• For Goods Producer: Detail layout of facility (Product layout or process layout). Why?

Points to Consider

• “Location, Location, Location!”

Points to Consider

• What are your competitors doing operationally? How can you use this information to help position your own operations?

• Finally – How does what you do in operations add value for the consumer/business you are serving?