VII. Operation Plan
The operation plan is a major section of the business plan that outlines the various activities, from acquisition of raw materials to the delivery of the products to the target consumers.
The operation plan commonly covers the following areas:
1. Evaluation of suppliers
2. Materials requisition and receiving procedures
3. Storage and inventory control system
4. Shipment system and control
5. Functions of support services
Evaluation of Suppliers
The new basic entrepreneurial concept of quality management is that control starts from the suppliers of raw materials. The suppliers of raw materials must practice total quality management to minimize or avoid defects or damages in the supplies.
Materials Requisition and Receiving Procdures
This section covers the following areas:
1. Basis of receiving the raw materials
2. Comparison of the order and receipt
3. Quality of materials received
Storage and Inventory Control System
This section deals with the following:
1. Owning or renting a warehouse
2. Management of the warehouse
3. Procedures in the transfer of goods
4. Control of inventory in the warehouse
Under the just-in-time manufacturing system, also known as JIT production system, storage and warehousing are eliminated because only actual orders are produced at the exact required time.
Shipment System and Control
This section covers the following:
1. Approval of shipping and sales documents
2. Terms of shipment
3. Manner of shipping the product
4. Other terms and conditions like sales contract
Functions of Support Services
Most businesses consist of three or four functional areas as follows:
1. Finance
2. Marketing
3. Operation
4. Human resources
The operation plan commonly covers the following areas:
1. Evaluation of suppliers
2. Materials requisition and receiving procedures
3. Storage and inventory control system
4. Shipment system and control
5. Functions of support services
Evaluation of Suppliers
The new basic entrepreneurial concept of quality management is that control starts from the suppliers of raw materials. The suppliers of raw materials must practice total quality management to minimize or avoid defects or damages in the supplies.
Materials Requisition and Receiving Procdures
This section covers the following areas:
1. Basis of receiving the raw materials
2. Comparison of the order and receipt
3. Quality of materials received
Storage and Inventory Control System
This section deals with the following:
1. Owning or renting a warehouse
2. Management of the warehouse
3. Procedures in the transfer of goods
4. Control of inventory in the warehouse
Under the just-in-time manufacturing system, also known as JIT production system, storage and warehousing are eliminated because only actual orders are produced at the exact required time.
Shipment System and Control
This section covers the following:
1. Approval of shipping and sales documents
2. Terms of shipment
3. Manner of shipping the product
4. Other terms and conditions like sales contract
Functions of Support Services
Most businesses consist of three or four functional areas as follows:
1. Finance
2. Marketing
3. Operation
4. Human resources