Operational Planning of Total Alignment - Case Study Example

? Business proposal of the Table of Contents Operational Plan 3 Business operation 3 Daily Operation 4 Planning for increased demand 5 Facilities and Equipment Plan 5 Capital Assets 5 Depreciation 7 Facilities Involved 7 Technology Plan 10 Conclusion 12 References 13 Operational Plan Operational planning signifies translating the business idea into a short-term, concrete projection usually for a year. The operational plan is also sometimes referred as the annual plan. The general aim of an operational plan is to focus on how much a business should sell and to whom at what prices. Apart from this, the plan also highlights on the issues like, the sources and cost of the equipments, labor and material, the manufacturing site for the products and the possibility of returns earned from the business. The importance of operational planning is dependent on the nature of the business. A manufacturing business requires more attention towards the production facilities and operational issues as compared to a retail or service business which involves lesser operational complexity (Lasher, 2010; Ford, Bornstein & Pruitt, 2010; Gaspar, 2013; Maynard, 2012). Business operation Total Alignment is a mattress company who has planned to introduce a system of computerized automatic adjustable mattress named Total Alignment Sleep Mattress 4000 System. The company has entered into an agreement with Ethan Allen, who have agreed to sell the mattresses designed by Total Alignment for a percentage of sales cost. The organization will be using third party distribution channels that are located in Los Angeles. The mattresses are either shipped directly to the stores or to the customers. Thus, the mattresses will be manufactured by Total Alignment and the orders will be distributed by the third party channel. Ethan Allen will be selling those mattresses. Daily Operation Firstly, the manufacturing of the mattresses will take place in the manufacturing plant of the Total Alignment, in the presence of technical experts along with other unit members. Quality control team will also be there at the manufacturing plant. The team will be responsible to check each manufactured mattresses for technical failures and to provide approval to the desired quality. The differentiating feature of these mattresses is the technological singularity. So, care should be taken that this aspect of the product meets and retains the expectations. After the product passes the quality check, they are ready to be packed and stored the warehouse. The mattresses will be sold through Ethan Allen who on receiving an order for the mattress will inform the company warehouse. They in turn will immediately deliver the product either to Ethan Allen or directly to the customer. This depends upon the individual delivery dates of the ordered products. If they have an immediate requirement, then the products will be directly delivered to the customers. Otherwise, they will be delivered first to the store and later to the customer. The whole process will be implemented in a computerized manner so that errors are minimal. Figure 1: Operational Flow Source: (Author’s Creation) Planning for increased demand The product that Total Alignment is developing, promises to generate a huge demand amongst the customers because of its long lists of benefits such as, health related advantages, variation in size of the mattresses and lifetime warranty on maintenance and repair. If the customer response to these features is high, thereby leading to high demand, then the organization will be compelled to increase their production in order to cater to the rising demand of the customers. In order to increase the production, Total Alignment will need to increase their manpower along with installation of more equipment. Increase in only any one of the factors will not lead to the desired outcome. Thus, both the factors must be increased in order to enhance the production. By increasing the number of equipments installed, one can increase the production of the manufacturing unit. This increase in the production also requires increasing the number of staff, so that the production hike can be regulated in a proper manner. Moreover, to operate the additional equipments, additional number of employees is also required. Hence, both of them should be incorporated in order to increase the demand for the product. Facilities and Equipment Plan Capital Assets Capital assets of a business are those assets which are not sold in regular courses of business operations and play a significant role in contributing towards the generation of profits of the business. The capital assets of this business are the equipments required for the production, the office equipments and the buildings. The equipments manufacturing mattresses: These equipments mainly manufacture the foam and the springs required for the mattress. The cloth to wrap the mattress will be procured from an external textile mill. The equipments also include the technical instruments to be installed within the mattresses to make it work. Following it, other parts would be manufactured and assembled together with the help of the equipments. Finally, the packaging will be done after determining and rejecting the defective products. Office Equipments: The office equipments include the furniture and fixtures, telephone system, computers and peripherals. Computers will be required to develop the software to be installed within the mattress for its operation. Telephones, furniture and fixtures are the general requirement for conducting the business operations. The building: In order to keep the business running, building is an important aspect that gives recognition to the business. The manufacturing unit will be taken on lease for ten years. The organization will pay a yearly lease rent for the same. On the other hand, the building for housing the central office will be rented at a commercial location within the city. For the office building, monthly rental will be given to the owner. The central office will have departments like, finance, marketing, human resource and operations. These departments will operate in the same building but in separate areas. The expenses that the business will incur while procuring the capital assets are as follows: Table 1 Particulars Amount ($) Production Equipments 4000 Office Equipments 2000 Building 1000 TOTAL 7000 Depreciation The calculation of depreciation has been shown in table 2 given below. The rate of depreciation has been assumed to be at 4 percent. Table 2 Schedule Of Depreciation Year 1 Year 2 Year 3 Year 4 Year 5 Assets Book Value Life Time(Yrs.) Rate Depreciation Net Block Depreciation Net Block Depreciation Net Block Depreciation Net Block Depreciation Net Block New Purchase(Year 1) Production Equipments 4000 5 4% 160 3840 160 3680 160 3520 160 3360 160 3200 Office Equipments 2000 5 4% 80 1920 80 1840 80 1760 80 1680 80 1600 Building 1000 5 4% 40 5760 40 5520 40 5280 40 5040 40 4800 Total 280 280 280 280 280 Facilities Involved Human Resource department: Human resource department of an organization plays the most crucial role by recruiting the most efficient, skilled and competent employee for the organization. Apart from effective recruitment, they are also responsible for deciding on the compensation package, planning for the organization and strategic troubleshooting if the organization faces any critical problem. Since Total Alignment is a new company and is planning to enter the market through new product development, employees are the most critical factor that would contribute towards the success of the organization. The employees would be recruited after being judged in terms of their abilities and skills. The compensation of the employees will be decided according to the industry standards. The policies regarding leaves, incentives, appraisal and promotion will be decided by this department. Besides that, this department will also be responsible for designing the training and development programs for the employees as per the requirements. The human resource department will have a head who will report to the management of the organization. Several executives will be working under the human resource manager. Finance department: The chief function of this department is check the financial aspect of the business operations like, the expenses incurred and the generated revenue. For deciding on this aspect, the department will firstly identify the sources for the expenses borne by the company along with identifying the sources that will generate revenue for them. Budgeting is an important aspect for the manufacturing firm like, Total Alignment. The budgeting of the expenses and the revenue should be done before hand. This department head would also be known as finance manager and will have two executives working under him. Marketing department: Marketing is very essential for a firm which is being initiated from the scratch and is about to enter the market with their product. The organization needs to frame proper marketing and promotional strategies for attracting the customers towards their products. This department needs to plan the various media that they will be employed for advertising the new concept. Apart from this, the marketing department of the organization is also responsible for regulating customer relationship management. There will be executives for receiving feedbacks, complains or any query related to the product or services that Total alignment provides. Customer relationship management is the core operation that deals in maintaining good relationship with the customers. Purchase Department: Total Alignment is into manufacturing mattresses which are built on a technological platform. For a manufacturing firm, procurement of raw material is an important segment of the operational activities. The procurement system requires maintaining the raw material level so that the manufacturing unit does not face any crisis. Therefore, their main task is to take care of the level of raw material which must comply with the standardized level. Apart from this, they are also responsible for the warehouse where the finished products are stored. Here also they need to see that the finished products are available as per the demands so that the requirement can be satisfied. Administrative department: The administrative department is responsible for the overall organizational operations. This department needs to coordinate with all other departments of the organization and ensure that it is operating efficiently and smoothly. It is the support function of Total Alignment which deals with responsibilities like, housekeeping, purchasing, personnel administration, transportation and other facilities that are operating in the organization. This department will have an administrative officer under whom two more executives will be working. Information Technology Department: Since the mattress that Total Alignment intends to bring in the market is backed with technology. Therefore, it can be concluded that technology is the special aspect which is crucial for the organization. Moreover, this department is also responsible for managing other technical matters within the organization. Technology Plan Total Alignment is the new established organization who is introducing a computerized automatic adjustable mattress system that will be operated through computer programs. The product had required heavy technical implementation. This implies how important the technology plan is for the organization. Apart from this, technology plays a leading role for swiftly leading a business operation. Today nearly every organization believes in conducting their business through computers as opposed to manually. Similarly, Total Alignment is not an exception and thus, will have technological plans for its business operations. Telecommunications: Telecommunication is a very important part of the business. Total Alignment will require telephone services for their business which they will acquire from the telecom service providing organizations like, Accurate Telecom Inc., who provides various telecommunication services and products to the business firms. Initially, the organization will not directly deal with the customers. The customers will interact with Ethan Allen, who is responsible for selling the mattresses that is manufactured by the organization. The telecommunication services will be required for internal business communication as well as for communicating with Ethan Allen. The communication with Ethan Allen is very crucial for the business of Total Alignment as he is the middle man for selling their products. Moreover, the customer’s feedback regarding the product will be given by him to Total Alignment. The business will operate in Los Angeles and California. Total Alignment will have the central office in Los Angeles and need to conduct their business in California from there itself. The business does not involve any external sales force. However, the individuals responsible for distributing the products will be provided with mobile phones for communicating whenever required. Computer Hardware: Computer is the basic requirement for efficient running of the business operations. In this regards, the organization requires computers for both daily business operations and developing the software required for operating the various functional aspects of the mattress. The organization requires at least 25 computers for efficient operation of the business. The business does not directly deal with the customers, so computers are not required for point-of-sale terminals. All the hardware that are attached to the computers need to be connected through a network for communicating with each other. Apart from this, well connected computers in a network facilitate efficient flow of data and information. The network for the computers will be procured from the telecommunication service provider company. Computer Software: Computers without software is of no use. The business of Total Alignment requires software that will facilitate order processing, inventory management, accounting, customer relationship management and other basic business tools such as, Microsoft Office Word, Excel and PowerPoint. Internet and e-commerce: Internet is immediately required in the business since it will help to communicate with Ethan Allen for the sale. Internet is also required for other purposes to drive the business like, information gathering and current trends. This information will be required by Total Alignment to track the changing requirements of the customers and accordingly implement changes in their business. E-commerce need not be implemented in the business from the initiation, but it can be one of the potential ways of expanding the business. The most attractive feature of e-commerce is the ability to positively impact the marketing efforts and sales of the business. The products that Total Alignment is dealing with can reach national level or even international level. The customer base will expand since sales through website do not have any geographical boundaries. Increasing the presence over internet will help the organization in expanding its customer base and increasing the profitability of the organization. Thus, e-commerce will be incorporated by Total Alignment in the future, but for the initial years, they will achieve their sales through Ethan Allen. IT services: The founder of the organization has some basic knowledge of IT services, but the business area requires expertise and to serve this purpose, Total Alignment will collaborate with other organization for acquiring the required IT services. Initially, some of the employees of the third party will operate from the central office of Total Alignment, but after attaining stability, the business itself will provide the support required. Conclusion The operational plan of Total Alignment which is discussed revolves around the operational activities that will be conducted related to the business. It has discussed about the daily operational plan, facilities and equipment plans and technology plan. Total Alignment deals in manufacturing mattresses and thus, the business operation involves the manufacturing process, quality check, packaging, transferring the product to the warehouse and finally, to the customers. This report suggests that other departments are also responsible for the efficient operation of the organization. Finally, it has discussed the technology plan and has suggested the outsourcing of technical facilities. References Ford, B.R., Bornstein, J.M. & Pruitt, P.T. (2010). The Ernst & Young business plan guide. New Jersey: John Wiley & Sons. Gaspar, J. (2013). Introduction to global business: Understanding the international environment & global business functions. 1st Ed. Connecticut: Cengage Learning. Lasher, W. (2010). The perfect business plan made simple: The best guide to writing a plan that will secure financial backing for your business. New York: Random House LLC. Maynard, M.A.C. (2012). How to build a Christian business. Bloomington: AuthorHouse. Read More