Administration & Operation Plan

Contents

Vision and mission, Objectives & Organizational StructureBusiness Planning: Posts, Job Specification and Remunerations

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Operational ConceptsBusiness Planning: Labors, Raw materials and overheadTotal production costs and cost per unit product/service

Components of A Business Plan

Management/Administration PlanVision, mission statement/goalCompanys goals and objectivesOrganizational StructureList of number employees and their job scopeSalary/remuneration of each employees

Management/Organizational Plan

Vision long term goal, broad, all-inclusive.Mission organizations vision translated into written form, short and concise statement of goals and prioritiesGoals/Objectives specific objectives that relate to specific time period and stated in terms of facts

Example (UTHM)

Vision :Berazam menerajui aplikasi sains dan teknologi untuk kemakmuran sejagatMission: Untuk melahir dan melatih ahli profesional dan teknologi yang bersahsiah mulia dan berdaya saing di arena global melalui program akademik holistik dan pmbudayaan ilmu serta penyelidikan yang berteraskan konsep tauhid.

Management/Organizational Plan

Organizational StructureOrganizational Chart is a diagram displaying the relationship between work position in a businessStarts at the top with the highest management position (CEO) and progresses down through management positions, technical and administrative people.

Example: Organizational Structure

Types of Organization Structure/
Departmentalization

FunctionProduct CustomerGeographyProcess

(a) Function Departmentalization

Company A

Engineering

Accounting

Manufacturing

Human

Resources

Purchasing

Figure 10-6

(b) Product Departmentalization

Procter & Gamble

Personal & Beauty

Health & Wellness

House & Home

Baby & Family

Pet Nutrition & Care

(Partial Listing of Products)

Camay, Olay, Zest, Head & Shoulder, Pantene, Oral B, Braun, BOSS, ESCADA, HUGO, Gillette

Febreeze, Duracell, Pringles, Mr Clean

Vicks, Metamucil, Oral B

Pampers, Luvs

Eukanuba

(c) Customer Departmentalization

Microsoft

Consumers

Large corporations

Small businesses

Figure 10-7

Customers in each department have a common set of problems & needs that can be best met by having specialists for each.

(d) Geography Departmentalization

Levi Strauss

United States

Asia Pacific

Europe

Latin America

(e) Process Departmentalization

Alcoa Aluminium

Casting

Department

Press

Department

Tube

Department

Finishing

Department

Inspection and

Shipping

Department

Management/Organizational Plan

List of number of employees and its job scopes. Eg: Task-basedAdministration tasksMarketing tasksOperation tasksFinancial tasksSalary remuneration of each employees

List of number of employees

Job Scope

Salary/Remuneration

Components of A Business Plan

Operation/Production PlanLocationEquipmentLaborLayoutManufacturing & Services ProcessSupplierProcess flowchartExpected monthly overhead costTotal of production per yearCost of product per unitCost of production per unit.

Operation/Production Plan

It deals specifically with the internal operations and equipment necessary to produce a product/service

Operation/Production Plan

LocationSpace of the office, warehouse or combination (what square footage needed)Advantage of the locationProvide layout in the appendices

Location

Consideration in Selection of Operational location/premises

Customer DistanceSupply in Raw MaterialsInfrastructure facilitiesManpower SuppliesPurchase cost, Site or Premises Rental consideration

Buyout or Rental???

Rental (Term agreement eg. 2+1)Lease (long term)Incubator concept (SMIDEC, SME Bank, SIRIM, MARA)

Operation/Production Plan

EquipmentOutline the equipment needed including cost (purchase or lease)Eg; lorry, machines, tools, building, computers etc..

Equipment Plan

Machine/Equipment Requirement Planning

Depend on business operation typesSupplier and machines No of machines meet current and medium term demandTechnology lifecycleMeet saleable productTechnology knowledgeMaintenance, spare parts and after sales servicesMachines lifecycle and brand

Operation/Production Plan

LaborRefers to a measure of the work done by human beingsHow many labors do you need? (Full time or part time)Break them out by function and hourly pay

Manpower Requirement Planning

Divide to Direct and Indirect laborDecide direct labor (permanent, contract, part time)Period of Contract/part time laborLabor salary/reward (expertise, experience, current market rate)

Raw Material Plan

Layout

Organize operational space (machines, equipment, raw materials allocation, working space, work in progress, finished products)

Layout

Can be based on:Product sequence of activity to produce a productProcess based on production process, suitable for business that produces several products which need similar processMarketing is used to utilize the available space to display product. Mainly for retail business, wholesale, bookshop and so on.

Layout planning:- (cont)

assemble machines/ equipment

Operational process must be in sequence, smooth movement, avoid waste time and defect.

Finished products are classified.

Customer friendly and convenience.

Convenience space and reduce movement time.

Easy machine maintenance & space cleaning.

Easy supervisory job.

Use optimum space utilize.

Take consideration on future need.

Rajah 7.2 B : Contoh Susun Atur Perniagaan Pengilangan Makanan Dingin Beku

SURAU

PEJABAT

RUANG PEMBUNGKUSAN

& PENGHANTARAN

TANDAS

PINTU MASUK

PINTU KELUAR

KAUNTER KHIDMAT

PELANGGAN

STOR BAHAN MENTAH

BILIK DINGIN BEKU

PROSES PENGELUARAN

MESIN 1

MESIN 2

PEMBUNGKUSAN

BARANGAN SIAP

RUANG PEMUNGAHAN BAHAN MENTAH & BARANGAN SIAP

Manufacturing & Services Process

Supplier Identify the list of suppliers that will support your operations

Process Flowchart

It starts from the production process of a product until its delivery to the store or customersIt is used to clearly visualize the operations process

Process Flowchart Symbol

SymbolType of ActivityDescriptionOperationActivities that modify, transform or give value to the input.TransportationTransport activity occurs when materials are transported form one point to another.InspectionActivity that measures standard of the in-process material, finished products or services.DelayThe symbol is used when in-process material is restrained in a location waiting for next activity.StorageThe symbol is used when the in-process materials or finished products ate storage area.

Expected monthly overhead cost

Overhead cost is a monthly cost that the business has to commitIt will affect to the cost of product per unitIt includes; travel, maintenance and repair, equipment leases, rent, advertising & promotion

Operational Cost

Operational costs

= Direct Material Cost + Direct Labor Cost + Overhead Cost

Direct material costs the money spent on materials that are directly used to produce the products or services. Direct labor costs the money paid as wages, salaries and benefits to the workers involved directly in the production of the products or services.Overhead costs include rent, insurance, wages of indirect labor, maintenance and depreciation.

Expected Monthly Overhead Cost

A comp has secured a

tender from university to

wash 300 units of buses

at a price of RM80.00

per bus.

Calculate cost of direct

materials, direct labor

and overhead.

What is monthly its

Monthly operations cost?

Shampoo1140Polishing material1725Supervisors salary1500Workers salary11520Rent900Utilities1800Brushes and sponges750Depreciation1050Petty expenses450

Calculation

Direct material costs

Shampoo1140

Polishing material1725

Brushes and sponges 750

Direct labor costs

Workers salaries 11520

Overhead costs

Supervisors salary1500

Rent 900

Utilities1800

Depreciation1050

Petty expenses 450

Monthly operations cost

= 20,835.00

Thus, the cost of washing bus can b calculated as follows:

Cost to wash a bus = Total operations cost (RM)

Total no of buses (Units)

= RM20,835

300 buses

= RM69.45 per bus

Rajah 7.2 B : Contoh Susun Atur Perniagaan Pengilangan Makanan Dingin

Beku

PEJABAT

KAUNTER

KHIDMAT

PELANGGAN

TANDAS

SURAU

PINTU KELUAR

PINTU MASUK

STOR

BAHAN

MENTAH

BILIK

DINGIN

BEKU

PROSES PENGELUARAN

MESIN 1 MESIN 2 PEMBUNGKUSAN

BARANGAN

SIAP

RUANG

PEMUNGAHAN

BAHAN MENTAH

& BARANGAN

SIAP

RUANG

PEMBUNGKUSAN

& PENGHANTARAN