Professional Documents
Culture Documents
Contents
Creating and Delivering Operational Plans
I. Introduction
II. Key operational processes
III.Method to create an operational plan
1. Competitive strategy
2. Supply chain management
IV. Measure the performance of the business
V. Recommendation for the delivery of the operational plan
VI. Conclusions
Name: Truong Quoc Khang Student code: s4223287
Class: BM01 Tutor: Ms. Hoang Anh
I. Introduction
Jasminder Ali (known as Jas) and his partner David Tucker both live in rural
East Devon and share enthusiasm about locally sourced, organic, and sustainable
food. While living in the area, they recognize the difficulty that the local community
needs to face, they can’t get all the stuff they need in a single shop. To get what they
want for daily use, the locals need to travel to remote locations down a narrow
country lane which also sells a limited range of products. Family and friend share
their view so they want to open the shop to address the need for local-made, fresh
and organic food that they know existed in the area. This shop will be known as
“East Devon Fine Foods”, serving both locals and holidaymakers. It will sell items
such as fish, shellfish, meat, poultry, fruit and vegetables, eggs, milk, cheese, butter
and yogurt, bread, cakes, and alcohol and non-alcohol drinks.
David as a startup, and by analyzing the Polar diagram, we will get a broad picture
from which to make decisions later.
Planning to fulfill the expected demand over an extended period is what capacity
management is all about. There will be two primary periods for Jas and Ali's shop.
Normal operating hours are from December to February, which is a fairly calm
period with few visitors and mostly local clients. Their primary objective should be
to prepare daily products like honey, yogurt, cheese, meat, fish, and alcoholic and
non-alcoholic beverages. The following time frame is the peak season (travel
season), which is predicted to increase the population by up to 25% during June,
July, August, and September. The owner can greatly reduce inventory costs by
applying Just-in-Time inventory management. “JIT is a form of inventory
management that requires working closely with suppliers so that raw materials arrive
as production is scheduled to begin, but no sooner” (Abby J, 2022)
Stock, often known as inventory, can exist in a variety of ways. And in this instance,
the inventory consists primarily of raw food components including meat, fish,
vegetables, and other staple foods. The majority of these goods share the same
issues, which is that they can become unwell quickly. This created a dilemma
because the owner would need a cold storage system to maintain the products'
quality if they were to be stocked. Additionally, during peak season, a sufficient
Name: Truong Quoc Khang Student code: s4223287
Class: BM01 Tutor: Ms. Hoang Anh
There are two main types of waste that they should concentrate on because lean is
primarily focused on removing the waste at various phases. Transportation and
inventory are involved Since most of their product are fresh, they cannot be kept for
very long. Therefore, a pricey cold storage system will be needed if they want to
stock it. Even if we were successful, the quality wouldn't be as high-quality as it
formerly was. Transport has an impact on the products' quality as well. The cost and
risk of illness increase with the distance from the supplier to the store. Additionally,
quicker shipping can help us meet urgent demand, particularly during peak season
Name: Truong Quoc Khang Student code: s4223287
Class: BM01 Tutor: Ms. Hoang Anh
1. For the scope, since there are no direct competitors in the region, only some in
remote locations down narrow country lanes, a total market will be more suitable for
the owner to aim at. This decreases the chance there will be new competitors
jumping into the market.
2. When it comes to competitive advantage, the results of the customer survey they
conducted earlier indicate that consumers anticipated them to offer a greater
selection of high-quality products. Additionally, it implies that as long as their needs
are addressed, people are willing to pay a greater price. For this reason, low-cost
strategies are not very important for East Devon, but instead, differentiation is the
right pathway to focus on. If they try to follow the cheap price method. “Losses in
profits, bad publicity, and damage to the company image are some of the negative
consequences that can result from not fulfilling clients’ expectations.” (Raoul D,
2020)
For the supply chain, the supply needs to be sustainable and reliable. It also should
meet high standards. When it comes to transportation, ideal suppliers are the ones
that have shorter traveling distances, the shop should make a deal supply from
businesses that are not too far away from East Devon, around 30 miles away.
Among the 11 businesses around East Devon, there are only 3 are not meeting the
distance requirement. That is “The Otter Vale Dairy Farm” near Upottery that
supplies cows’ milk, cheese, and yogurt, “Clyst Fruits” in Broadclyst supplies
apples, pears, juice, and ciders, and “Taste of the Hedgerow” based in Stockland
that supply soft drinks and seasonal cordials made from seasonally foraged
ingredients. Furthermore, all the supplies above can be substituted. So after
establishing the foundation, East Devon farm shop can sustain the supply while
minimizing the delivery and travel cost
As we already know when will it be peak and normal period, then we can prepare for
it. Chase demand should be applied when it comes to capacity management strategy.
As a start-up business, remaining royalty and gaining market is important for East
Devon, it reduces the chance that there would be new competitors jumping in. In
peak season (during June, July, August, and September), East Devon's population is
expected to raise by 25% due to holidaymakers. This requires the owners to order
higher quantities to meet demand. According to the research, visitors are highly
interested in freshly made sandwiches. The shop must have other necessary
ingredients to make sandwiches which included vegetables, bread, and meat before
the season, even though it may tie up capital and inventory costs could increase.
However, by ordering in large quantities, we would ask for an offer, such as slow
payment, this will reduce the pressure. Regarding human resources, if necessary, Jas
and David could consider employing more, not stopping only at 5 workers, as this
could reduce customer service. During peak periods, if the contrast between the
number of employees and the number of customers is too large, customer service
could decrease and this is different from what the owner wants.
Except for the peak season, in the normal period, the owner should increase the
frequency of ordering instead of raising the quantity in each order. As this will
contribute to minimizing the storage cost and not tying up the capital. This is very
important for the owner as they can use the resources for other necessary purposes.
Even more during winter, they can decide to order a bit more quantity, climate will
help them to reduce cold storage costs. About the inventory area, they do not need to
Name: Truong Quoc Khang Student code: s4223287
Class: BM01 Tutor: Ms. Hoang Anh
wonder too much as their already a storage place right behind their shop, this reduces
the cost of hiring a place.
Jas and David should consider using the Lean operations model. It is a strategy
driven by the principles of doing more with less. It is a method aimed primarily at
reducing time within the production system as well as response times from suppliers
to customers. Lean may also identify process bottlenecks or gaps and eliminate them
to decrease waste, providing the shop with better control and management of
operations like sourcing and packing. The reduction of constraints aids in the
optimization of the product manufacturing process, resulting in higher-quality goods
and more time savings (Womack, James P., Jones, Daniel T, 2003)
Combining these 3 KPIs, the owner can set up a plan related to market share,
customer demand, and inventory. These 3 targets are the most important for a firm, as
they decided the survival of a business
Name: Truong Quoc Khang Student code: s4223287
Class: BM01 Tutor: Ms. Hoang Anh
In the past, Jas and David didn’t have any experience working in a farm shop. Jas has
experience in retail but in the clothes and bakery field. While David has a catering
background and can package “Fruit and veg boxes”. So a good team is what they
need to operate a business smoothly. They should identify the possible positions that
they would need while running the business, it could be security, cashier, selling
worker, storage manager, or food specialist. Moreover, consider the capital fund so
the business wouldn’t spend too much on hiring and ignore other important fields.
During peak season, Jas and David could consider their firms’ capacity to decide
about hiring more workers. If the predictions are not clear and detailed, they can get
overloaded and customer service also be affected. A good food specialist will ensure
the quality of the business’s products as Jas and David didn’t have any experience
dealing with fresh ingredients.
The second is about supply. As some of the products are seasonal, the owner should
be flexible about deciding on substitute products after the season passed. Other
factors that can affect the firms like a traffic jam, natural disaster, or animal flu
should be taken into account to minimize possible outcomes. 3 suppliers are quite far
away, so finding other suitable suppliers soon will be their priority. Moreover, as
there is no competitor or shop in the area, the customer will expect East Devon to
have a wide variety of products, from daily to seasonal. Regarding contracts with the
suppliers, East Devon should set a partnership relationship. This will secure the
source of the ingredient, especially during peak season, which was expected to make
the population raise by 25%. The shop also needs to evaluate its performance to see
whether the shop is falling behind the main target of the month and see if it can
Name: Truong Quoc Khang Student code: s4223287
Class: BM01 Tutor: Ms. Hoang Anh
Lastly, identifying possible risks would prevent a negative outcome. The products
are mostly fresh and easy to get ill. During peak season, the shop would need to
order a lot more compared to normal days, but if for some reason like Global Disease
they can’t come, then the owner should have a solution for it. Like during the
summer of 2019, many tourist places prepare and expand a lot to meet the demand
that they estimated would raise. But in the end, Covid 19 come and ruined all the
plans they have been making for years.
VII. Conclusion
In general, this report discusses the key operations processes that Jas and David
should focus on when setting up the East Devon farm shop. The method that Jas and
David can apply to create an operational plan. Key performance indicators to
measure the performance of their business. Lastly, some recommendations for them
during operating the shop.
Name: Truong Quoc Khang Student code: s4223287
Class: BM01 Tutor: Ms. Hoang Anh
Reference
Slack, N., Brandon-Jones, A., and Johnston, R. (2016), Operations Management (8th edition), London:
Prentice-Hall.
Raoul, D. (2020). Client expectations: What happens when they aren’t met, and how to fix it.
Philadelphia:
Womack, James P.; Jones, Daniel T. (2003), Lean Thinking: Banish Waste And Create Wealth In Your
Corporation, Simon, and Schuster