Operating and Control Systems Plan

Operating and Control Systems Plan

 

This section of the Business Plan describes the flow of goods and services the input stage, through the conversion stage and in the post- production stage. Standards must be set for the use of resources at every stage and control measures implemented to ensure that the standards are being met. This involves an analysis of the whole supply chain. In particular, a supplier analysis, inventory control analysis and an assessment of how the goods will flow to the customer must be considered, whether the venture is a retail or service provider or a manufacturer.  If your venture is a retail operation or a service provider, you should consider the following questions:

•             From whom will merchandise be purchased?

•             Consider the supplier’s reputation, past record, prices versus other suppliers, delivery methods, whether or not they supply your competitors and how important your business is to them.

•             How will the inventory and quality control system operate?

 

Consider how you will inspect the goods received and what you will do if materials are defective.  What are the storage and processing space needs?

 

•             What is your ordering materials process?

•             How will the goods flow to the customer?

•             What steps are involved in a business transaction?

•             What technology (Debit machines, scanners) will you need to service customers effectively?

•             Create standards for each phase of the operation and describe what methods of control you will use to ensure they are met.

 

Standard/Goal  Control measures

Supplier analysis

Inventory and Quality Control

Flow of Goods to customers

Customer satisfaction

 

Manufacturing operation

If you are proposing a manufacturing operation, you should describe the complete operations management process. Some of the issues will be the same as above, but some will be different. In the Supplier analysis, you would include how much, if any, of the manufacturing process is subcontracted out to another firm. Who will perform such work and how will you decide what to outsource and what operations to keep in-house?  What specialized machinery and equipment is needed and who will supply this? What are the capital equipment needs and expenditures? Include the costs in your financial plan and a full list of equipment in the Appendices.  In analyzing the flow of goods, illustrate the layout and all the steps in the production process. Both service providers and manufacturers should have standards set for being responsive to customers.  For example, a goal for customer service might be, “100% satisfaction or your money back guaranteed!” Enterprises must build in feedback control measures that allow customers to complain and praise the service and/or products, such as questionnaires and surveys. Describe the risks that could arise in managing the operations of the venture and how you can minimize them.

Financial Plan

The Financial plan tells the reader what the level of potential investment commitment is needed and whether or not the business plan is feasible.  It details the needed capital requirements for starting the venture or new strategy, the forecasted sales, and the expenses incurred in selling the product/service over a number of months and years.   Each line of entry should have a corresponding footnote explaining the assumptions made in calculating the number.