OPERATION PLAN

7. Operation plan

7.1 Introduction
In business, operational objectives are short-term goals whose achievement bring in organization closer
to its long-term goals. It is slightly different from strategic objectives, which are a longer term of a business,
but they are closely related, as a business will be able to achieve strategic objectives when operational
objectives have been met. Operational objectives usually plan by middle manager for the next six to twelve
month based on an organization aim. They should be attainable and specific so that they can provide a clear
guidance for daily functioning of certain operation. This business term is typically used in the context of
strategic management and operation planning.

Firstly, operational objective should be specific, focused, well defined and clear enough rather than vague so
the employee know what to achieve via the work. A specific objective should be mention the expected action
and outcome. This would help the employee to focus on the same goals and prevent them to working with
the different goals. Secondly, the operational objective should be measureable and quantifiable so people
will it has been met or not. As example, an objectives might be increasing sale revenue by fifteen percent.
This would prevent the confusion and conflicts on whether it has been met between different stakeholders.
Thirdly, an objectives should be achievable and feasible. It should be agree by stakeholders, especially by
the employees. If they think it unachievable it might be demotivated them. Fourthly, an objective should be
realistic as well as challenging. It should be reasonable given their limited resources. Lastly, it should have a
specific deadline to target the achievement. It will help from the work to be drag off and will help the increases
of the productivity. It also good to determine priorities. As example, operational objectives would have a great
influence to the customer satisfaction should be complete in shorter time than those have less influence.

It might be difficult to set operational objectives that are understood and accepted by all employees, as they
might see different priorities and values. Therefore, it is important to let employees to participate in
determining of the objectives and state them as clearly as possible. After setting appropriate operational
objectives on each department, business can then be made to achieve them.
7.2 Component of Operation Systems

7.2.1 Business Input

Business input refers to all resources that we use to produce the products which includes raw materials
such as flour, eggs, full cream milk, water, sugar, salt, hotdog, mozzarella cheese, minced chicken, herbs
and optional materials such as dices potato, instant noodles and bread crumbs, manpower, machines and
equipment, technology, information and capital.

7.2.2 Transformation process

The transformation process or system is the activities that are involves in transforming our product from
input into output such as the process flow, material requirement planning and cycle time and it also include
the machine which involve in producing the product.

7.2.3 Output

Output refer to our finishing product, specifications, quantities, cost and delivery target time. Output
also provide the final answer or mainly call as final decision making the product to be displayed.

7.2.4 Feedback

Feedback by the customer is needed by giving their reaction, comment and complaint. This is because
to help our company to improve our production of the product and also help to detect if there any lack in our
product.
7.2.5 External Environment

This refer to converting the raw materials into our company product in order to gain a profit. Plus, it
involve in condition, entities, events and factor surrounding our organization that influence its activities a
choices. Besides, that also determines the opportunities and risk for our business.
7.3 Process planning for manufacturing

7.3.1 Process flow chart

(Dough batter)

Prepare all the raw materials on the working table

Mix all the dry raw materials together in a mixer and make sure all the ingredient mix well

Then put the wet materials such as eggs, milk and water. Put little by little for wet ingredient and mix
them well until it become hard to mix and become a nice batter.

(Corn dog)

Top with mozzarella cheese and hotdog on the skewers.

Coat the corn dog skewers with the batter you made earlier.

Coat it with optional ingredient such as potato dices, instant noodle or bread crumbs on the outer of the
corn dog.

Fry corn dog in hot oil until golden brown, then lift and toss it well.

Garnish with sauce, mayonnaise, mustard or cheese sauces.

 (Cheese ball)

Boil the potatoes with salt until tender

Slice the boiled potatoes and mix with a little sugar salt and minced chicken.

Make it a round shape and place in it a little mozzarella cheese and re-round it. Then coat with a little bit
of flour.

Coat with bread crumbs and fry

Fry it until it turn to golden brown color. Lift it and toss.

7.4 Operation Layout

7.4.1 Layout of kiosk

WORKING
WATER SINK

MIXER DEEP FRY GAS

AREA

TABLE
WORKING
REFRIGERATOR

CHILLER

KIOSK
7.5 Production planning

7.5.1 Sales forecast per month

Output per month

Average sales forecast per month = RM10 000

The sales prices = RM 5

Number of output per month = Average sales forecast/Sales price per unit

= RM 10 000 / RM5

= RM 2 000

7.5.2 Number of output per day

= No of output per month / no. working days per month

= 1000 units / 26 days

= 38 units

Number of output per hour

= no of output per day / daily working hours

= 38 units / 16 hours

= 2.375 / 2 unit per hour

7.6 Material Planning

7.6.1 Material requirement planning

7.6.1.1 Raw materials require per month

No Material Quantity Safety Total Price/Unit Total price

stock(5%of material (RM) (RM)
quantity) requirement
1. Mozarella
Cheese 16 kg 0.3 kg 16.3 kg RM78 RM624
Hot Dog 250 pieces 13 pieces 263 pieces RM3.50 RM87.50
Flour 40 kg 2 kg 42 kg RM2.20 RM88
Full Milk 26 litre 1.3 litre 27.3 litre RM5.00 RM130
Chili Sauces 8 litre 0.4 litre 8.4 litre RM4.50 RM36
Mayonnaise 8 litre 0.4 litre 8.4 litre RM6.50 RM52
Black pepper
sauces 6 litre 0.3 litre 6.3 litre RM4.50 RM27
Eggs 600 nos 30nos 630 nos RM11.30 RM22.60
Baking
Powder 1 kg 0.1 kg 1.1 kg RM14.95 RM119.60
Sugar 10 kg 0.5 kg 10.5 kg RM2.95 RM29.50
TOTAL RM133.40 RM1216.50
7.6.2 Identify supplier

Material Supplier
Mozarella cheese/Hot Dog/Flour/Full Milk/Sauces Smiling Orchid Ingredients Trading
Jalan Ismail Petra, Taman Maju Setapak, 17500,
Tanah Merah, Kelantan
Eggs Perniagaan Jaya Pemborong Telur
4366-C, Jalan Kebun Sultan, Bandar Kota
Bharu,15350 Kota Bharu, Kelantan

7.7 Machine and equipment planning

7.7.1 Amount of machine and equipment required

Planned rate of production a day X standard production time

Machine productivity time per day

 Bakery mixer

46 X 30
960 8

= 0.18 @ bakery mixer

*standard production time = one process cycle in a minute / quantity product per cycle
7.7.2 List of machine and equipment

Machines No. of machines

Dough Mixer 1
Refrigerator 1
Chiller 1
Deep fryer 1
Pan Rack 1

7.7.3 List of machine supplier

Machine Supplier
Dough Mixer / Deep Fryer / Pan rack Puncak Stainless Steel & Machinery Sdn Bhd
No.1-G-H Kompleks Perniagaan Humaira Jalan
Humaira 2, 17500 Tanah Merah, Kelantan
Chiller / Refrigerator Lian Huat Electrical & Hardware Trading
Lot 10076, Taman Sinaran (Belakang Pantai Timur
Jalan, 17500 Tanah Merah, Kelantan

7.7.4 Machine and equipment

Item Quantity Price/Unit (RM) Total Cost (RM)

Dough mixer 1 RM 400 RM 400
Chiller 1 RM 500 RM 500
Refrigerator 1 RM 500 RM 500
Deep Fryer 1 RM550 RM550
Pan rack 1 RM30 RM30
Shelves 1 RM100 RM100
Tools equipment 1 RM 50 RM50
TOTAL 7 RM2130 RM2130
7.8 Man power planning

7.8.1 Organization chart for Operation Department

OPERATION
MANAGER

7.8.2 Amount of direct labor required

Planned Rate of production per day X Standard production time

Machine productive per day

 Mixer Operator

46 X 40
960 8

= 0.24 @ 1 Operator
7.8.3 List of operation personnel

Position No of personnel
Operation manager 1

7.8.4 Schedule of task and responsibilities

Position Task and responsibilities

Operation Manager An operations manager is keypart of a management
team and oversees high-level HR duties, such as
attracting talent and setting training standards and
hiring procedures. They also analyze and improve
organizational processes, and work to improve
quality, productivity and efficiency.

7.8.5 Schedule of remuneration

Position No. Monthly EPF SOCSO Amount

Salary (RM) Contribution (1.75%) RM
(11%) RM
RM
Operation
Manager 1 RM1500 RM165 RM26.25 RM1691.25
TOTAL RM1691.50
7.9 Overhead Requirement

7.9.1 Operation overhead (indirect labour/materials/insurances/maintenance and utilities)

No. Type of overhead Monthly cost (RM)

1. Electricity RM150
2. Machine maintenance RM100
3. Water RM100
4. Telephone RM30
5. Internet RM30
6. Fuel RM200
7. Driver RM300
TOTAL RM910

7.10 Business and operation hours

Business hour = 12 hours (10 AM – 10 PM)
Operating hours = First shift (7.00 AM – 3.00 PM)
Second shift (3.00 PM – 10.00 PM)

Working days = 6 days a week (Monday to Sunday except for Friday)

7.11 License, premises and regulation required
7.11.1 Business Premises license and Signboard licenses

Company doing business in Malaysia are required to apply for business premises licenses and a
signboard license from the Respective State Authorities. The requirement for the application of the business
premises license and a signboard license may vary according to each local authority. Generally, an
application for a business license and signboard license must be accompanied by :

1) Photocopy of the applicant identity card

2) Passport size photograph of the applicant
3) Copy of the company M&A and Forms 9.24 and 49
4) Copy of either the rental agreement or the sale and purchase agreement of the company business
premise.
5) Copy of the certificate of Fitness of the company business premise.
6) Copy of the Fire Department support letter.
7) Copy of the location plan of the company business premise.
8) Picture of business premises.
9) Picture showing the location of the company’s signboard
10) Sample of the signboard indicating the its design and color.
7.11.2 Halal Certificate from JAKIM

Applicant that eligible to apply for Halal Certificate are categorized as below :

 Producer or manufacturer
 Distributor or trade
 Sub-contract manufacture
 Repacking
 Food premise

We are producing a food which is suitable to apply for the Halal Certificate from JAKIM. We must fill in the
relevant form ;

 Product or consumer good

 Food premise

7.11.3 Certificate for Safety and Health

An Act to provide for the control of factories with respect to matters relating to the safety, health and
welfare of person therein, the registration and inspection of machinery and for matters connected there with.
In addition, technical knowledge of occupational safety and health, a successful safety and health manager
and employee must possess working knowledge of a broad range of business and financial principles and
understanding of related issue such as workers compensation, product safety, environmental laws, quality
and labor relations. The certified Safety and Health Manager program is designed to provided recognition of
those who can apply a broad range of safety and health management tools.
7.12 Operation Budget

Item Fixed Asset Monthly expenses Other Expenses

(RM) (RM)
Fixed Asset
Machine & Equipment RM2130 -- --
Working Capital
Raw materials RM1216.50
Salary, EPF & SOCSO -- RM3442 --
Operation overhead RM 910
Rent RM100
Other Expenses
Workers uniform -- -- RM 640
Pre-Operations
Deposit Rent RM500
Insurance & Vehicle -- -- RM500
Roadtax
Halal Certificate
RM 400
TOTAL 2130 5668.50 2040