What is the product? Is there a market? Where is the initial funding come from? How experienced is the management team? These are some of the first questions investors and lenders will respond when investigating startup companies, and rightly so. Business plan usually addresses these and other related questions in some detail, but what about the Operations Plan? If the operation is mentioned, are likely to be at best sketchy details. Operations Management is acting as a start-up company, and if so, what is the role? When we look at the role of operations management in start-up companies, we need to address the roles and responsibilities of two key players; entrepreneur and business management professional.
First we need to realize the truth that operations could not play a crucial or important role in the start-up company. Depending on the type of product or service the company is to produce and stage of development the company is in. But then again, Operations could play an important role, and when that happens Operations Management professionals need to be prepared. This is where the entrepreneur or owners come in. It is the responsibility of the entrepreneur to understand the needs of the organization at any time and the skills and experience needed to be brought on board at different stages of development. Entrepreneurs are often experts in their field, and tend to be creative “idea people” who see the big picture and can visualize the future of the company. Many entrepreneurs struggle with day-to-day details of running a business, and many have no formal education or business management experience. These entrepreneurs need to understand the skills operations management professionals bring to the table and where and how they fit into the boot structure (and when). It is the responsibility of the operational management professional, who is at home in the details, to adapt their skills and knowledge to sustainable environment and to develop systems and day-to-day activities that will help lead the organization for long-term success.
There are significant differences between the development, organization established and startup companies, and many operations management professionals might not have the skills and experience needed to help guide the startup of it’s way to success. If you’ve spent your career working in a large, well established, bureaucratic organizations, you might be ill-prepared for life in an entrepreneurial organization. The speed at which decisions can be made and changes in direction can be small or startup business can be mind boggling for those used to the bureaucracy. Detailed analysis and long policies are a luxury that few employers or managers startup afford. Experience, gut feelings, and back of the envelope calculations often rule the day. Operations Management professionals need to be able to adapt to this environment, and have the confidence to act without detail and support they are often used to.
As for the entrepreneur, how do you determine when and whether you should consider a larger role in the operation, and how do you go about developing action Plan? Well, the first thing to do is to understand just what we are talking about when we talk about operating and Operations Management. In a nutshell, Operations Management focuses on the processes and procedures that the establishment uses to produce its products or provide their services. Quality and customer service are important factors that fall under the umbrella. For an organization to be successful, must be closely integrated relationship with all other functional areas, including strategic planning, marketing and sales, and finance. There will be a formal integration if all these measures fall under one or just a few.
You must have a viable product or service, you need to have a good marketing strategy, you need money and you need to be able to deliver the product or service. You can have a wonderful product, a steady stream of new products, an exciting marketing campaign, and plenty of money, but if you can not satisfy your customers by delivering the product or service with the highest quality, with the highest level of service, you will not. Deliver a product or service is in a state of Operations. The role of Operations varies, of course, depending on the nature of the work and life stage company. A software development company in the early stages of writing the code will not have to pay much attention to Operations. The company, which is in the R & D stage integrate these software components for original equipment manufacturers need a well-developed policy measures. The device manufacturer is the level change from R & D and prototyping to full production must have highly developed and highly detailed operations plan in place, if they expect to compete in the global marketplace today. The device manufacturer must have operations menu strategy and plan in place from day one, since the operation is such an important part of their future success. Even if it will take several years to get to full production mode, you should begin to develop action plans at the beginning of the company. You will have an advantage over the competition if you have developed action plan and strategy as you grow, rather than waiting until you’re ready to ramp up production. If you wait, it may already be too late.
I have been working recently with a small construction company. The owner approached me to help him with the business plan for a new line of business. Although I have no knowledge of or experience in its industry, he understands the value of operations management and how it can help improve existing business and help him get a new line of business off on the right foot. The existing company would have benefited from Operations planning and management in the early stages, but a new line of business will have an advantage by starting this planning in the early stages of development. The operations management profession as a whole has largely untapped market in startup companies in almost every industry. Operations Management professionals need to adapt their knowledge and skills to this audience.
Also, as I said earlier, it’s probably pretty safe bet to say that many, if not most, not entrepreneurs do not come from Operations background, so what should be considered in the Operations Plan? The operation covers everything from procurement of materials and resources needed to produce the product or provide the service, through to the delivery of goods or services to the customer or consumer. The Operations Plan must address how the organization will perform these tasks. In the field of operations management is littered with buzzwords (value stream, process mapping), various systems and methods (Lean Manufacturing, Six Sigma), and three-letter abbreviations (ERP, for enterprise resource planning, usually means the computer system and SCM to Inventory Management). The Operations Plan is to cut through the clutter and simply stated how the organization will meet their customers and drive profitability.
Some aspects of the Operations Plan to look for are:
o Sourcing strategy – including vendor selection criteria and supplier evaluation
o Quality system – how will be monitored and controlled process? How will the authority and responsibility for quality allocated and distributed throughout the organization? What results are expected?
o Production and Inventory Management (applies to goods and services) – where you will meet the customer – you will build for its building stock, or what? What is production and production control methodology? What are the material and information flows?
o logistics and delivery – will warehousing and delivery services carry out in-house or outsourced? What are delivery channels?
o Customer service – how much power will be provided to service personnel? Will there be dedicated customer service staff, or it will be the responsibility of operations, sales and marketing, or what? What are your expectations for customer satisfaction?
o Integration – How will the activities be integrated with other divisions?
actions is an important part of every organization. Roles and Responsibilities Operations vary by organization, industry, and life stage organization, but not importance. Every organization, product manufacturer or service provider, for-profit or non-profit, government or private, will actually produce and deliver their product or service to satisfy its customers and investors. The operation plays a key role in any business and should give the commitment needed to ensure success. Every business plan should include a detailed and well-developed Operations Plan, and every business owner should have an understanding of the role of Manager in their organization.