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GENERAL MANAGEMENT
CHECK POINT 11: OPERATIONAL PLANNING

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1. what is operational planning?
2. four basic steps in operational planning
3. basic elements of operational planning
4. relationship between operational planning elements
5. general management planning
6. human resources management planning
7. financial management planning
8. operations management planning
9. marketing and sales management planning
10. importance of operational planning
11. for serious business owners only
12. the latest information online
 

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GENERAL MANAGEMENT
CHECK POINT 11: OPERATIONAL PLANNING

Please Select Any Topic In Check Point 11 Below And Click.

1. what is operational planning?
2. four basic steps in operational planning
3. basic elements of operational planning
4. relationship between operational planning elements
5. general management planning
6. human resources management planning
7. financial management planning
8. operations management planning
9. marketing and sales management planning
10. importance of operational planning
11. for serious business owners only
12. the latest information online
 

DO I NEED TO KNOW THIS CHECK POINT?

 

WELCOME TO CHECK POINT 11

TUTORIAL 1 General Management TUTORIAL 2 Human
Resources Management
TUTORIAL 3 Financial Management TUTORIAL 4 Operations Management TUTORIAL 5 Marketing
And Sales Management
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2 7 12 17 22 27 32 37 42 47 52 57 62 67 72 77 82 87 92 97
3 8 13 18 23 28 33 38 43 48 53 58 63 68 73 78 83 88 93 98
4 9 14 19 24 29 34 39 44 49 54 59 64 69 74 79 84 89 94 99
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100
 

HOW CAN YOU BENEFIT FROM CHECK POINT 11?

 
The main purpose of this check point is to provide you and your management team with detailed information about Operational Planning and how to apply this information to maximize your company's performance.
 
In this check point you will learn:
 
• What is operational planning?
• About four basic steps in the operational planning process.
• About the basic elements of operational planning.
• About general management planning.
• About human resources management planning.
• About financial management planning.
• About operations management planning.
• About marketing management planning.
• About sales management planning.
• About the importance of operational planning... and much more.
 

LEAN MANAGEMENT GUIDELINES FOR CHECK POINT 11

 
You and your management team should become familiar with the basic Lean Management principles, guidelines, and tools provided in this program and apply them appropriately to the content of this check point.
 
You and your team should adhere to basic lean management guidelines on a continuous basis:
 
Treat your customers as the most important part of your business.
Provide your customers with the best possible value of products and services.
Meet your customers' requirements with a positive energy on a timely basis.
Provide your customers with consistent and reliable after-sales service.
Treat your customers, employees, suppliers, and business associates with genuine respect.
Identify your company's operational weaknesses, non-value-added activities, and waste.
•. Implement the process of continuous improvements on organization-wide basis.
Eliminate or minimize your company's non-value-added activities and waste.
Streamline your company's operational processes and maximize overall flow efficiency.
Reduce your company's operational costs in all areas of business activities.
Maximize the quality at the source of all operational processes and activities.
Ensure regular evaluation of your employees' performance and required level of knowledge.
Implement fair compensation of your employees based on their overall performance.
Motivate your partners and employees to adhere to high ethical standards of behavior.
Maximize safety for your customers, employees, suppliers, and business associates.
Provide opportunities for a continuous professional growth of partners and employees.
Pay attention to "how" positive results are achieved and constantly try to improve them.
Cultivate long-term relationships with your customers, suppliers, employees, and business associates.

1. WHAT IS OPERATIONAL PLANNING?

OPERATIONAL PLANNING

Business owners and managers must be fully familiar with various elements of operational planning which represents one of the most important managerial responsibilities in every business organization.

Upon completing the development of the company's strategic plan and formulating appropriate objectives, your management team must initiate the Operational Planning Process. 

The prime purpose of Operational Planning is to determine how your company should implement its strategic plan in order to ensure that overall objectives are met. The main focus of operational planning is on the present activities of the company, and its prime concern is efficiency (doing things right), rather than effectiveness (doing the right things). 

Since Strategic Planning provides direction and boundaries for operational management, the two types of planning overlap. However, both are essential in ensuring effective management of the organization and must operate continuously on a day-to-day level to achieve it.

The nature of planning responsibilities depends upon the size and specific objectives of a particular organization. Executive management needs to commit itself to action in accordance with the ultimate objectives set out by the planning process. This process does not end when the objectives are defined.

FLEXIBLE OPERATIONAL PLANS

Operational Plans must be thoroughly implemented and remain flexible at all times. Plans sometimes may require modification during the process of their implementation. Thus, the re-planning abilities of the management team usually hold the key to the ultimate successful performance of the company.

 

ARE YOU A ONE-PERSON BUSINESS OWNER?

 
If you are a one-person business owner, you may adopt a less formal approach, but you are still required to implement four basic elements of Operational Planning discussed in this check point. You should remember that you are the “conductor of your own one-person-orchestra” and you must be able to wear various “management hats” based on your specific business needs. This will include planning the following activities:
 

General Management Planning.

Financial Management Planning.

Operations Management Planning.

Marketing And Sales Management Planning.

 

Moreover, it will be very beneficial for you to become familiar with the content of the entire check point, including Human Resources Management Planning, because one day you may decide to take your business to the next level and employ additional employees within your organization.

 

ADDITIONAL INFORMATION ONLINE

The Planning Process Part 1 By Business English Pod.
The Planning Process Part 2 By Business English Pod.
Creating An Operational Plan By Donna Price, Bizology.
Strategic, Tactical And Operational Planning By Victor Holman.
The Difference Between Strategic And Operations Planning By Heather Harker.

2. FOUR BASIC STEPS IN OPERATIONAL PLANNING

THE PLANNING PROCESS

The basic Operational Planning Process can be condensed into four steps and applied to all planning activities within the organization as illustrated below.
 

FOUR BASIC STEPS IN OPERATIONAL PLANNING

Step 1: Establishment Of An Objective Or A Set Of Objectives.

  • What objectives does the company need to accomplish?
  • When does the company need to accomplish its objectives?

Step 2: Definition Of The Present Situation.

  • How far is the company from its objectives?
  • What resources are available for achieving objectives?

Step 3: Identification Of Operational Methods.

  • Which internal and external environmental factors can help the company achieve its objectives?
  • Which internal and external environmental factors may cause problems?

Step 4: Development Of A Plan Or A Set Of Actions To Achieve The Company's Objectives.

  • What specifically must be planned in the areas of general management, human resources, accounting, operations, and marketing and sales?
  • By when does the company need to accomplish various tasks to ensure that its objectives are met in a timely manner?

3. BASIC ELEMENTS OF OPERATIONAL PLANNING

TIME RANGE OF OPERATIONAL PLANS

Operational Plans may be prepared for periods of time ranging between one day and twelve months. These plans are developed by top and middle-level managers and serve to provide guidance to the company's employees on a daily, weekly, and monthly basis.

Operational planning activities in small and medium-sized companies normally include five areas of business management illustrated below.

FIVE AREAS OF A COMPANY'S ACTIVITIES

General Management Planning

Human Resources Management Planning

Financial Management Planning

Operations Management Planning

Marketing 
And Sales Management Planning

4. RELATIONSHIP BETWEEN OPERATIONAL PLANNING ELEMENTS

The relationship between the basic elements of Operational Planning is illustrated below.
 

5. GENERAL MANAGEMENT PLANNING

WHO IS IN CHARGE OF GENERAL MANAGEMENT PLANNING?

General Management Planning is a function of the company's president. This function entails a number of important activities outlined below.

WHAT IS GENERAL MANAGEMENT PLANNING?

• Preparation Of A Plan Of Management.

This plan is based on a consolidated plan of action in accordance with the specific company needs.

• Development Of An Organizational Chart.

This chart is prepared in accordance with the specific nature and needs of the company.

• Development Of A Management Structure.

This structure is reviewed and modified in accordance with the results of situational analysis and needs of the company.

6. HUMAN RESOURCES MANAGEMENT PLANNING

WHO IS IN CHARGE OF HUMAN RESOURCES MANAGEMENT PLANNING?

Human Resources Management Planning in small and many medium-sized companies is also a function of the company's president, unless a human resources manager is employed. This function entails a broad range of planning activities which involve all departments within the organization as outlined below.

WHAT IS HUMAN RESOURCES MANAGEMENT PLANNING?

• Preparation Of Job Descriptions And Job Specifications.

Existing job descriptions and job specifications are reviewed and modified in accordance with the company's specific needs.

• Employee Planning And Forecasting.

Employee requirements are identified and summarized in accordance with the company's specific needs.

• Preparation Of Employee Recruitment Plans.

New employees are recruited and hired in accordance with the employee planning requirements.

• Employee Training And Management Development.

Appropriate training and development plans are prepared for employees in accordance with the company's specific needs.

• Preparation Of The Employee Compensation Budget.

The total cost of basic compensation, employee benefits, and the company's contributions is summarized in accordance with the employee planning requirements.

• Employee Appraisal Planning.

The performance of every employee is appraised on a pre-planned basis in accordance with the company's specific needs.

7. FINANCIAL MANAGEMENT PLANNING

WHO IS IN CHARGE OF FINANCIAL MANAGEMENT PLANNING?

Financial Management Planning is a function of the company's vice-president, finance, or financial manager, or controller. This function is of particular importance to the whole organization and entails a number of activities outlined below.

WHAT IS FINANCIAL MANAGEMENT PLANNING?

• Development Of An Effective Computerized Bookkeeping System.

The existing system is reviewed and modified in accordance with the specific company's needs.

Preparation Of An Operating Budget.

This budget represents a numerical plan and provides a description of future operating results. It includes a sales (or revenue) budget, production (or cost of sales) budget, operating expenses budget, and budgeted income statement.

• Preparation Of A Financial Budget.

This budget provides a description of future financial conditions and includes capital expenditure budget, cash budget, and budgeted balance sheet.

• Development Of New Internal Control Procedures.

The existing procedures relating to cash management and control, credit control, and control of purchases and disbursements are reviewed in accordance with the specific company's needs.

• Planning Of Inventory Levels.

The current level of inventories is identified, and future adjustments are planned in accordance with operating budget requirements.

Development Of New Cost Recovery Rates.

Current cost recovery rates are reviewed and adjusted in accordance with operating budget requirements.

Development Of New Management Accounting Reports.

The current set of reports is reviewed and redesigned in accordance with the specific company's needs.

• Development Of A New Integrated Financial Management System.

Current financial management systems are evaluated, and new integrated financial management system is developed in accordance with the specific company's needs.

8. OPERATIONS MANAGEMENT PLANNING

WHO IS IN CHARGE OF OPERATIONS MANAGEMENT PLANNING?

Operations Management Planning is a function of the company's vice-president, operations, or operations manager. This function exists in all manufacturing and non-manufacturing companies alike and entails a broad range of activities outlined below.

WHAT IS OPERATIONS MANAGEMENT PLANNING?

• Facility Design And Development.

The current facility is reviewed and reorganized in accordance with the specific company's needs.

Development Of A New Product Or Service Range.

The current product or service range is examined and new products or services are developed in accordance with the overall marketing plan requirements.

• Development Of New Manufacturing Or Operational Processes.

The current manufacturing or operational processes are evaluated, and new ones are developed in accordance with the specific company's needs.

• Development Of An Operations Management Plan.

This plan includes evaluation and selection of new equipment, examination and redesign of plant layout, and preparation of equipment maintenance and replacement schedules.

• Development Of New Cost Estimating Methods.

Current cost estimating methods are evaluated and re-adjusted in accordance with the specific company's needs.

Preparation Of Production Or Operations Plans.

These plans include annual forecasts of production or operations output (aggregate plans), and short-term master production schedules.

Material Requirements Planning (MRP, MRP II, ERP).

This entails preparation of a detailed list of materials needed to fulfill master production schedule requirements.

Operational Capacity Requirements Planning.

This entails planning of operational capacity needed to fulfill master production schedule requirements.

Shop Floor Planning.

This entails preparation of drawings, tools, operational and manpower capacity needed to fulfill specific production scheduling requirements in each shop.

Materials Purchasing Planning And Supply Chain Management (SCM).

This entails preparation of a detailed list of optional suppliers, materials, prices, and delivery dates.

Quality Control Planning And Total Quality Management (TQM).

This entails examination of current quality control methods and development of new methods in accordance with the specific company's needs.

Material Dispatch Planning.

This entails examination of the current methods of material dispatch and development of new methods in accordance with the specific company's needs.

9. MARKETING AND SALES MANAGEMENT PLANNING

WHO IS IN CHARGE OF MARKETING AND SALES MANAGEMENT PLANNING?

Marketing And Sales Management Planning is a function of the company's vice-president, marketing and/or sales, or marketing and/or sales manager. This function entails a number of activities outlined below.

WHAT IS MARKETING AND SALES MANAGEMENT PLANNING?

• Development Of A New Marketing Information System (MIS).

The current marketing information system is reviewed and modified in accordance with strategic marketing requirements.

Market Segmentation, Targeting, Positioning, Measurement, And Forecasting.

This entails identification of new market segments, targeting suitable markets, positioning the company in these markets, measuring the market potential, and forecasting the level of future sales.

• Development Of New Marketing Mix Strategies.

The current strategies relating to product, price, promotion, and distribution are reviewed and adjusted in accordance with the strategic marketing requirements.

• Preparation Of A Marketing Plan.

This plan includes a new product or service plan and a revised annual marketing plan. Both plans are developed in accordance with the company's strategic marketing requirements.

• Preparation Of A Sales Plan.

This plan includes a detailed sales or revenue budget which is developed in accordance with the company's sales forecasts. This plan also includes marketing and selling costs budgets developed in accordance with the company's marketing planning requirements.

Development Of A Sales Organization.

The current sales organization is examined and re-designed in accordance with the company's sales planning requirements.

Preparation Of Sales Force Recruitment Plans.

New sales people are recruited and hired in accordance with the company's sales planning requirements.

Sales Force Training And Development.

Appropriate training and development plans for sales people are prepared in accordance with the company's specific needs.

Preparation Of Sales Force Compensation Plans.

The current level of basic compensation, incentives, and employee benefits for sales people is reviewed and adjusted in accordance with the company's employee compensation program.

Sales Force Appraisal Planning.

The performance of every sales person is appraised on a pre-planned basis in accordance with the company's employee appraisal program.

10. IMPORTANCE OF OPERATIONAL PLANNING

WHY OPERATIONAL PLANNING IS SO IMPORTANT?

All elements of Operational Planning require careful consideration by your company's management team to ensure effective organizational performance. Without proper planning individuals within the company tend to react in an aimless manner and leave events to chance.

It is essential, therefore, that you, as a business owner, become fully familiar with a broad range of operational planning tasks, and this will enable you to delegate specific tasks to various managers within your organization to ensure its successful long-term performance.

 

LOOK AT YOUR BUSINESS AS AN ORCHESTRA

If you really want to succeed in your business - you must look at your business like an orchestra.

You must always remember that you are the conductor of your "orchestra" and you should know exactly what your "musicians" are supposed to "play" and when they are supposed to "play it" to ensure that your team efforts will result in a "beautiful music".


In business terms, this means that you must become familiar with various aspects of operational planning outlined below.

 

OPERATIONAL PLANNING IN YOUR COMPANY

General
Management
Planning.

Human
Resources
Management
Planning.

Financial
Management
Planning.

Operations
Management
Planning.

Marketing
And Sales
Management
Planning.

Subsequently, your newly acquired management knowledge will enable you to develop a cross-functional management approach within your organization, delegate various operational planning responsibilities to your managers, and control their performance. Ultimately, this will be the most effective way to "produce beautiful music", i.e. to successfully maximize your company's performance and profitability.

ADDITIONAL INFORMATION ONLINE

Operational Plan By Nikolay Safonov.
Cross-Functional Process Teams By Henry Shaffer, Insite One.
Cross-Functional Teams By Anat Lechner, NYU School Of Business.
How To Manage Cross-Functional Teams? By Total Quality Consulting.
Developing An Operations Plan For Your Business By Management Training School.

11. FOR SERIOUS BUSINESS OWNERS ONLY

ARE YOU SERIOUS ABOUT YOUR BUSINESS TODAY?

Reprinted with permission.

12. THE LATEST INFORMATION ONLINE

 

LESSON FOR TODAY:
If You Don't Plan To Fail - Don't Fail To Plan!

William J. Siegel

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