BM5723 - Creating & Delivering operational plans

BM5723
Introduction to operational planning

Session 1
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Learning agenda

• Introduction to me, the module and the assessment

• Revisit operations functions
• Explore operational planning as a management process
• Apply your learning to a case study scenario

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Introduction to me Ian McLarty
imclarty@glos.ac.uk
Subject matter experience (Nationwide):
Drop-in office hours
• Branch manager (retail sales) 9-12 Thursdays
BG248
• Training manager (for retail branches & call centre)
• Senior manager for change management supporting major operations improvement
projects in retail network

Learning philosophy:
• ‘Lectures’ are a limited method of learning – too passive
• Learning happens best when people are engaged and have to think
• Applying theory to practical examples is an essential learning stage
• Sharing thoughts and experiences helps everybody make sense of things
• Revisiting key learning points at a later date is vital to build long term understanding
Forget Lecture / Seminar. This is a 2 hour ‘class’. 4
Module overview - CMI

Section 1 Understand Section 2 Know how to

principles of operational create an operational plan
planning in an in line with organisational
organisation objectives

CMI Unit 515

Section 3 How to manage

Section 4 How to monitor and lead the delivery of an
and measure the outcome operational plan
of operational planning

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Module overview – learning context

• ‘Operational’ plans lay out in detail how a team or department will contribute
to the success of the organisation
• For consistency we’ll use the operations functions of organisations as the
context for the module and the assessment
• Allows us to explore key operations activities that were introduced at L4 and
are not included elsewhere in the course
• BUT…. ‘Operational’ & ‘Operations’ are not the same thing
• All functions of a business should have an operational plan (e.g. HR,
Marketing, IT support)

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 Module overview – Session map
W.c. Lecture/Seminar (2hr) Additional session (1hr)
27 Sep 1. Introduction operational planning & operations
04 Oct 2. Operations process design
11 Oct 3. Capacity management
18 Oct 4. Inventory control
25 Oct 5. Supply chain management
01 Nov 6. Creating an operational plan & measuring 7a. Leading & managing delivery of an operational
performance plan (1)
08 Nov NO LECTURE
15 Nov 8. Quality management
22 Nov 9. Lean Operations
29 Nov 10. Risk management
06 Dec 11. Assessment workshop (1) 7b. Leading & managing delivery of an operational
plan (2)
13 Dec 12. Assessment workshop (2)

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Reading list

• On Moodle
• Core text – some hard copies in library. Also an e-book.
• Chapters are quite detailed and contain more than lectures do.
• Focus on consolidation reading rather than pre-reading.

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Module assessment - see Moodle
Assessment brief
You are required to produce a 2,500 word management report for the owners of the farm shop “East
Devon Fine Foods” in the assessment case study. This report should cover the following areas:
1. The method that Jas and David should adopt in order to create an operational pan for the operations
function of their farm shop business. (c.750 words)
2. A critical review of the key management considerations that Jas and David should focus upon in
setting up the core operations of the business. (c.750 words)
3. A justified proposal for a set of key performance indicators to measure the performance of the
business in respect of its operations function. (c.500 words)
4. Supported recommendations for how Jas and David should lead and manage the delivery of their
operational plan for the operations function of the farm shop. (c.500 words)

The word counts in brackets are for guidance only.

Your report should be structured clearly to reflect these 4 sections and include a brief introduction to
summarise the purpose of the report and indicate its contents. There is no need to include an executive
summary on this occasion.
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Module assessment - see Moodle
Case Study – ‘East Devon Fine Foods’
• Farm shop business scenario
• Application of learning evidences understanding
• 2x Assessment workshops will help you discuss application of core content
to help construct your management report
• In the meantime, we’ll use another business case study in weekly sessions
to help apply learning (‘Aspire’ gym). See Moodle.

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 What does this function of a business involve?

Business Operations

Where the rubber hits the road!!

‘Operations’ refers to the core business processes that enable the business to
deliver its products and services

e.g.
Manufacturing – the running of the factory
Retail – running of the shops
Leisure – running of theme park rides

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 Operations revisited
Inputs Outputs
Pure products – outputs are
Transforming Resources exclusively tangible
e.g. plant & equipment, Transformation
premises Processes Pure services – outputs that are
(Operations) exclusively intangible
Transformed Resources
e.g. raw materials, stock Mixture of products & services –
outputs that are a mixture of
Suggest typical Inputs (transformed & transforming tangible and intangible
resources) and typical Transformation processes
(operations) that apply for Amazon
Example of each type?

Based on Slack et al., (2010)

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Measuring performance in operations
Match the
1. Costs Ability to consistently produce products & services to meet
customer demand A right
description to
2. Quality Ability to produce products & services fast enough to help
reduce unit costs and meet customer expectations B the right
Ability to produce products and services that continually performance
3. Speed
meet customer expectations C measure
4. Flexibility Ability to re-allocate resources to meet peaks and troughs
of output D
Ability to produce products & services in the quantity
5. Dependability
required to meet production schedules E
6. Volume Ability to produce products & services with low or zero
impact on the environment F
7. Environmental Ability to produce products & services at lowest feasible
unit cost (cost efficiency) G
Measuring performance in operations ANSWERS
1. Costs
Match the
Ability to produce products & services at lowest feasible
unit cost (cost efficiency) G right
Ability to produce products and services that continually description to
2. Quality
meet customer expectations C the right
3. Speed
Ability to produce products & services fast enough to help
B performance
reduce unit costs and meet customer expectations
measure
4. Flexibility Ability to re-allocate resources to meet peaks and troughs
of output D
5. Dependability
Ability to consistently produce products & services to meet
customer demand A

6. Volume Ability to produce products & services in the quantity

required to meet production schedules
E
7. Environmental Ability to produce products & services with low or zero
impact on the environment F
Conflicting operations performance measures
1. Costs

2. Quality
BUT
Some measures & objectives may conflict with each other
3. Speed
In these cases it’s the relative importance that matters
4. Flexibility

5. Dependability
Suggest 3 potential conflicts between these
performance measures. (Be prepared to justify
6. Volume your ideas!)

7. Environmental
Polar representation of relative importance of
performance objectives E.g. My local fish & chip shop
• High volumes of customers
• Quick service
• Selling relatively limited range
Cost • Spikes in order 6-7pm & after 10pm
• Many competitors in town and online delivery

Environment
Quality

Volume Speed

Dependability Flexibility
Key operations content in the module

Core operations considerations Operations management

• Process Design • Lean Operations
• Capacity Management • Quality management
• Inventory control • Risk management
• Supply chain management

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Operational planning
Ideas??
What is it??
A process of translating the organisation’s vision (mission) and its strategy into
meaningful plans for using the organisations resources to deliver products and
services to customers.
It’s purpose is to explain how different organisational teams will operate in
order to contribute to the overall ambitions of the business.
It’s part of the CMI’s ‘golden thread’ of strategic management.

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Golden Thread (CMI)
Operational plans
What do they
Our business as usual activities
look like?
Variety of Which strategic
different format goals we
and templates contribute to

https://www.you What resources

tube.com/watch How we’ll we have to use
?v=LhkItbtiBug measure our
performance

How we aim to get better at what we do

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Operational planning process – getting started

Need to know:
• What does the organisation want to achieve? (Mission, Vision, Corporate Plan)
• How will the organisation behave? (Values, Ethics)
• What is the overall strategy for the organisation in the way it will try to achieve its
ambitions? (Business Strategy)
• What do our own stakeholders expect / want? (Stakeholder analysis)
• What resources do we have at our disposal? (Budget, Equipment, Manpower)
• How good are we currently? (SWOT analysis, STEEPLE analysis, Gap analysis)

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Mission & Vision statements

What’s the difference?

Vision statements
Paint a picture of what things will be like if the business is successful

Mission statements
Sum up the aim and purpose of the business

May also include reference to the values the business considers important in
pursuing their mission or vision and how the organisation will therefore behave.
(Organisational ethics)

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Competition time…..

Whose is it?

1. “[company name] aims to be the place for health and

beauty customers. We want to secure market leadership
in the UK and build on our brands, growing success
internationally.”

Hint:
High street pharmacies
Boots
Competition time....

Whose is it?

2. “To provide our customers with safe, good value,

point-to-point air services. To effect and to offer a
consistent and reliable product and fares appealing
to leisure and business markets on a range of
European routes. To achieve this we will develop
our people and establish lasting relationships with
our suppliers.”

Hint:
Easy Jet
Competition time....

Whose is it?

3. “Tirelessly work to narrow the gap between principle

and practice, whilst making fun, passion and care part
of our daily lives.”

Hint: ethical cosmetics?

Body Shop
Competition time....

Whose is it?

4. “Long term business success based on newly

invented, innovatively designed products.”

Hint: Head Office currently in Malmesbury

Dyson
Competition time....

Whose is it?

5. “To establish [company name] as the premier

purveyor of the finest coffee in the world whilst
maintaining our uncompromising principles as we
grow.”

Hint: based in Seattle

Starbucks
Business strategy – strategic positioning
e.g. Porter’s Generic Strategies
Key choices:
Mass market
or
Avoid Mass
Niche market
Don’t try to
be all things Cost strategy (low price is the
to everyone. competitive strength)
or
DANGER Differentiation strategy (being
distinctively different, e.g. quality or
customisation)
Niche
Business Strategy - strategic direction
e.g. Ansoff’s Matrix Examples of these
strategies in action?

Risk increases the further

e.g. TV adverts encouraging the strategy moves business
e.g. Regular re-iterations
children to eat Coco Pops away from existing products
of the iPhone
after school & existing products.

Diversification is most risky

strategy

e.g. Tesco joint venture with e.g. Land Rover developed

Ting Hsing (Hymall stores) in range to extend into
China aspirational urban market
Stakeholder Analysis
Groups and individuals who have an interest in an organisation and can either affect or
be affected by it.

Internal stakeholders External stakeholders

Involved in running / working Not involved in running /
in the organisation working in the organisation
e.g. e.g.
Line manager Customers
Senior managers Suppliers
Team members (employees) Community
Other departments (e.g. HR or Government
Finance)
Stakeholder Management matrix

High

Low

Low High
SWOT – Competence & Influences
Strengths: Things about the
organisation which give it a
Internal
competitive advantage (e.g.
having a unique product)
Opportunities: Things in the
organisations environment that
External
it could take advantage of (e.g.
developments in new
materials or the opening up of
new markets)
Weaknesses: Things about the
organisation which put it at a
competitive disadvantage (e.g.
poor responsiveness to
customer demands for changes
to the product)
Threats: Things in the
organisation’s environment that
could harm it (e.g. new
competitors entering the
market)
STEEPLE - Environment
Used to analyse the external environment that the organisation is working in.
Helps inform the Opportunities & Threats of a SWOT
Here based on analysis of seven areas of Influence:

Influence Comments
Socio-cultural
Technological
Economic
Environmental
Political
Legal
Ethical
‘Aspire’ gym case study Task2
As a group, use Porter’s model and Ansoff’s
Task 1 matrix to describe:
• Read through the ‘Aspire’ • ‘Aspire’s’ strategic positioning
case study scenario
• ‘Aspire’s’ strategic direction
• As a group, identify the key
operations processes that
‘Aspire’ will need to manage
effectively to be successful
and which would slot into the
‘Services provided….’ section
at the top of this operational
plan template

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‘Aspire’ gym case study

Task 3
1. Pull together a polar representation diagram to reflect the relative importance
of the 7 operations performance measures for ‘Aspire’ as you see them.
(HINT: think about their strategic positioning and strategic direction.)

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Operational planning – what next?
Initiate action to improve performance Draw up operational plan
Plan, Do, Check, Act
• Simple quality management cycle
• Will return to this management cycle
in session 6

(Deming, W.E., quoted in Operations Management, Slack et

al, 2016)

Assess performance against plan Implement operational plan

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This module – where next then?

Operations management:
Session 2 – Process design
Session 3 – Capacity management
Core operations management processes
Session 4 – Inventory control
Session 5 – Supply chain management

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Learning agenda

• Introduction to me, the module and the assessment

• Revisit operations functions
• Explore operational planning as a management process
• Apply your learning to a case study scenario

38