Operations Plan


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Operations Plan

  1. 1. Operations Planning <ul><li>The Operations Plan describes your production management system. </li></ul><ul><li>It describes what you produce and how you produce it. </li></ul>
  2. 2. Operations Planning <ul><li>This section should be one of the easier sections for you to develop. </li></ul><ul><li>But planning is easy, implementation is the hard part. </li></ul>
  3. 3. Operations Planning <ul><li>Operations/production management is one of the most important aspects of running a farm business. </li></ul><ul><li>Production level or yield is usually the single most important factor determining the cost of production. </li></ul>
  4. 4. Operations Planning <ul><li>There is rarely one area where significant cost reductions can be attained. </li></ul><ul><li>The key to more profitable businesses is managing many costs two to five percent more efficiently than their competitors. </li></ul>
  5. 5. Operations Planning <ul><li>In the operations section of a business plan, you need to adequately communicate that the business has a sound production management strategy. </li></ul>
  6. 6. Operations Planning <ul><li>The operations plan should document the critical operational procedures that make will make your business successful? </li></ul><ul><li>Do you know the critical operational functions that will determine a new business or enterprise’s success? </li></ul>
  7. 7. Operations Planning <ul><li>When starting a new enterprise, visit similar business’s to identify critical operational factors. </li></ul><ul><li>This is particularly important if you are starting a new or creative niche operation. </li></ul>
  8. 8. Operations Planning <ul><li>To communicate your Operations plan, this section should discuss: </li></ul><ul><ul><li>The products produced </li></ul></ul><ul><ul><li>The production system </li></ul></ul><ul><ul><li>Quantity produced </li></ul></ul><ul><ul><li>Production schedule </li></ul></ul>
  9. 9. Operations Planning <ul><li>Operations should discuss: </li></ul><ul><ul><li>Resources available and needed </li></ul></ul><ul><ul><li>Permits and regulations </li></ul></ul><ul><ul><li>Risk management plan </li></ul></ul><ul><ul><li>Environmental issues </li></ul></ul><ul><ul><li>Quality control systems </li></ul></ul>
  10. 10. Operations Planning <ul><li>The operations section should also help you think through and identify production functions that can be improved. </li></ul>
  11. 11. Operations Plan <ul><li>Marketing and operations are closely related. </li></ul><ul><li>Which plan should you develop first? </li></ul>
  12. 12. Operations Plan <ul><li>You may want to ask: </li></ul><ul><ul><li>Should I determine my marketing opportunities and produce to meet the marketing plan? </li></ul></ul><ul><ul><li>Or should I determine my competitive production capacity and develop markets for my products? </li></ul></ul>
  13. 13. Operations Plan <ul><li>Traditionally agricultural producers focused on products they had a competitive advantage producing. </li></ul><ul><li>Today there is a growing focus on determining marketing opportunities and producing to meet demand. </li></ul>
  14. 14. Operations Plan <ul><li>Your approach may depend on whether you are focused on: </li></ul><ul><ul><li>Producing a commodity – competitive production advantage focus </li></ul></ul><ul><ul><li>Producing a niche product – market demand focus </li></ul></ul>
  15. 15. Operations Planning <ul><li>The production plan may also address how the business will: </li></ul><ul><ul><li>Produce value-added products </li></ul></ul><ul><ul><li>Specialize on a product or a few products </li></ul></ul><ul><ul><li>Diversify the product line </li></ul></ul><ul><ul><li>Transition to a new or niche products </li></ul></ul>
  16. 16. Resources <ul><li>Guide worksheets </li></ul><ul><ul><li>Production system & schedule-worksheet 4.10 </li></ul></ul><ul><ul><li>Regulations & policies - worksheet 4.11 </li></ul></ul><ul><ul><li>Resource needs & acquisition-worksheet 4.14 </li></ul></ul><ul><ul><li>Operations strategy summary-worksheet 4.17 </li></ul></ul><ul><ul><li>Risk management – worksheet 4.24 </li></ul></ul>
  17. 17. Resources <ul><li>FINPACK Business Plan software </li></ul><ul><ul><li>Crop system </li></ul></ul><ul><ul><li>Livestock system </li></ul></ul><ul><ul><li>Other enterprises </li></ul></ul><ul><ul><li>Risk management plan </li></ul></ul><ul><ul><li>Environmental considerations </li></ul></ul><ul><ul><li>Quality control systems </li></ul></ul>