1     Female Business Plan CompetitionOperations planning, Wednesday March 16thLecturer: Wynand Bodewes    Maastricht Cent...
2             Female Business Plan Competition    Maastricht Centre for Entrepreneurship
3     Female Business Plan CompetitionOperations planning, Wednesday March 16thLecturer: Wynand Bodewes    Maastricht Cent...
4    Starting your venture    Maastricht Centre for Entrepreneurship
5       Why planning (operations)            makes sense    Maastricht Centre for Entrepreneurship
6    Planning your operations    Entails deciding on        scope of the venture’s operations             based on fear   ...
7    Scoping    Forward        principal-agent issues between you and your distributors/        resellers    Backward     ...
8    Backward scoping    difficulties arise when        supplier has to commit to             site-specificity (i.e. co-lo...
9Scoping pitfalls    Sleeping with the enemy can be fatal    If you marginalize your role, also your margins    will be sm...
10     Scoping     Present ability, resources & competences     Future ability to compete         cost leadership (process...
11     Complementarity     Some activities are connected: they are complements     In such cases, scoping should consider ...
12     Outsourcing operational tasks     reduces operational risk as it reduces the managerial     task     minimises fina...
13     Scoping options     Industry life-cycle         initially one may have to do all itself, later there may be        ...
14     An analytical approach to scoping     Focus on value added of activities         re-occuring tasks         unique t...
15     Maastricht Centre for Entrepreneurship
16                                              Break     Maastricht Centre for Entrepreneurship
17     Understanding your (future) operations     Attract investors to invest in the business     Guide the owner and mana...
18     Resource requirements & capacity planning     Operational implementation of the proposed venture         what resou...
19     Capacity planning       Required capacity            labour hours            machine hours            floor space  ...
20     Operating cycle     external         processing orders     internal         order fulfilment (production)     calen...
21     Bill of capacity     Total standard time         of each piece of equipment         of each type of labour         ...
22     Demand forecast & Master production schedule     Will you produce to demand or to inventory         build in some s...
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Business plan workshop Business Plan Competition for women

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Business plan workshop Business Plan Competition for women

  1. 1. 1 Female Business Plan CompetitionOperations planning, Wednesday March 16thLecturer: Wynand Bodewes Maastricht Centre for Entrepreneurship
  2. 2. 2 Female Business Plan Competition Maastricht Centre for Entrepreneurship
  3. 3. 3 Female Business Plan CompetitionOperations planning, Wednesday March 16thLecturer: Wynand Bodewes Maastricht Centre for Entrepreneurship
  4. 4. 4 Starting your venture Maastricht Centre for Entrepreneurship
  5. 5. 5 Why planning (operations) makes sense Maastricht Centre for Entrepreneurship
  6. 6. 6 Planning your operations Entails deciding on scope of the venture’s operations based on fear based on calculus I.e. what will you do, what do intend you leave to others Maastricht Centre for Entrepreneurship
  7. 7. 7 Scoping Forward principal-agent issues between you and your distributors/ resellers Backward supplier hold-up (the supplier profits, and not you) Maastricht Centre for Entrepreneurship
  8. 8. 8 Backward scoping difficulties arise when supplier has to commit to site-specificity (i.e. co-location) physical-asset specificity (i.e. moulds) human asset specificity (i.e. training their workers) because such commitments are sunk-costs (buyer holdup) render you dependent on a sole supplier (supplier hold-up) Maastricht Centre for Entrepreneurship
  9. 9. 9Scoping pitfalls Sleeping with the enemy can be fatal If you marginalize your role, also your margins will be small long term ability to compete What happens to an IP broker at the negotiating table? you MUST sub-licence or the contract with the IP owner will be revoked you sell an idea, not a product or a business Maastricht Centre for Entrepreneurship
  10. 10. 10 Scoping Present ability, resources & competences Future ability to compete cost leadership (process innovation) differentiation (product innovation) As scoping decisions affect one’s future competitive positioning, it they also represent strategic choices Maastricht Centre for Entrepreneurship
  11. 11. 11 Complementarity Some activities are connected: they are complements In such cases, scoping should consider the complementary activities, not the individual ones. e.g. product development & production capability may be strongly interwoven e.g. manufacturing subsystems with pre-standard interfaces e.g. complex and novel technology/product Maastricht Centre for Entrepreneurship
  12. 12. 12 Outsourcing operational tasks reduces operational risk as it reduces the managerial task minimises financial risk as it reduces investment needs speeds up execution of one’s plan (no lead time to build) outsourcing is a reversible decision 67 % of Inc 500 were started with less than $ 50,000 in capital 21% required more than $ 100.000 Maastricht Centre for Entrepreneurship
  13. 13. 13 Scoping options Industry life-cycle initially one may have to do all itself, later there may be others who can do tasks better and more efficient Partner selection profile your partner large, established, dependent, dynamic, cost conscious, fast Maastricht Centre for Entrepreneurship
  14. 14. 14 An analytical approach to scoping Focus on value added of activities re-occuring tasks unique tasks Map your value chain, transform it into a worksheet if activity is strategic, then internalise (unless competitive suppy industry) non-strategic then outsource (unless threat of forward integration by supplier) calculate the “minimum efficient scale” to find out whether or when it makes financially sense to internalise Maastricht Centre for Entrepreneurship
  15. 15. 15 Maastricht Centre for Entrepreneurship
  16. 16. 16 Break Maastricht Centre for Entrepreneurship
  17. 17. 17 Understanding your (future) operations Attract investors to invest in the business Guide the owner and managers in operating the business Give direction to and motivate employees Provide an environment to attract customers and prospective employees Maastricht Centre for Entrepreneurship
  18. 18. 18 Resource requirements & capacity planning Operational implementation of the proposed venture what resources are needed to execute the chosen business model and the expected demand Physical resources Human resources Machinery & equipment This translates into financial resources Maastricht Centre for Entrepreneurship
  19. 19. 19 Capacity planning Required capacity labour hours machine hours floor space translates into manpower requirements (FTE and positions) equipment needs scaling Gradual / incremental slack capacity Maastricht Centre for Entrepreneurship
  20. 20. 20 Operating cycle external processing orders internal order fulfilment (production) calendarize asset utilisation (peaks in capacity requirements) Maastricht Centre for Entrepreneurship
  21. 21. 21 Bill of capacity Total standard time of each piece of equipment of each type of labour to produce one unit of your (initial) product Requires (and shows!) detailed knowledge of your venture’s operational processes equipment suppliers may help you specify the standard times for your production process but also potential sub-contractors (if you ask for it) Maastricht Centre for Entrepreneurship
  22. 22. 22 Demand forecast & Master production schedule Will you produce to demand or to inventory build in some slack between demand and supply transform demand into a production plan, Anticipate to ramp up production! Calendarise resource requirements (that result from your forecasted sales) manhours, machine hours Capacity requirements FTE, Machines Maastricht Centre for Entrepreneurship
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