TOPIC 7OPERATIONAL PLAN

Lecture ContentOperation Concept Site Location and Premises SelectionManufacturing/Services Capacity PlanningRaw Materials/Production Materials PlanningManufacturing System and Process PlanningProduction ScheduleQuality in ProductionOperating Costs and Budgeting

Learning OutcomesTo be able explain basic operational concept in business planTo be able identify main components of operational planTo be able carry out and explain the importance of operational plan in business planTo be able develop the complete operational plan

IntroductionBase on sales forecast (qty,RM,daily,weekly etc)Demand types (periodically, seasoning, Period to deliver (monthly, weekly etc)Target customer (business or customer segment)

Operation and Other Functions

Production Management/Operation

Financial ManagementMarketingMarket/CustomerMachines/EquipmentsSuppliersLaborMarketOrganizationRaw MaterialsSupplier10 (Delivery)1 (Sales Forecast)8 (Equipment purchase)4(Raw Materials Order)5 (Raw Materials Delivery)9 (Costing & Finish Products)2 (Production Order)6(Employee Selection)3 (Source of Financing)9 (Costing & Finish Products) 7 (Manpower)

Operational ConceptINPUTManpowerRaw MaterialMachine/equipmentTechnologyCapitalOutputProductServicesMixesEnvironmental ForcesTransformation ProcessFeedback

Transformation Process Raw Materials to Finish Product/Service

CONTROLInput/Materials DistributionCONTROL

ManagementTechnology Application

Raw MaterialsCapital/FinanceMachines/Equipment UsageManpower UsageProcessing MethodRenovation/Modification ProcessFinish Products/Services

ObjectivesTo design proper operating systemTo meet quality product To minimize cost and increase profitProduction activity will be efficient and consistent

Consideration in Select Operational location/premisesCustomer DistanceSupply in Raw MaterialsInfrastructure facilitiesManpower SuppliesPurchase cost, Site or Premises Rental consideration

Buyout or Rental??? Rental (Term agreement ex. 2+1)Lease (long term)Incubator concept (MDec, SME Bank, SIRIM, MARA)

LayoutOrganize operational space (machines, equipment, raw materials allocation, working space, work in progress, finished products)Layout planning:-assemble machines/ equipment JKKP or local authority requirement.Operational process must be sequence, smooth movement, avoid waste time and defect.

Rajah 7.2 B : Contoh Susun Atur Perniagaan Pengilangan Makanan Dingin

Beku

SURAU

PEJABAT

RUANG PEMBUNGKUSAN

& PENGHANTARAN

TANDAS

PINTU MASUK

PINTU KELUAR

KAUNTER KHIDMAT

PELANGGAN

STOR BAHAN MENTAH

BILIK DINGIN BEKU

PROSES PENGELUARAN

MESIN 1

MESIN 2

PEMBUNGKUSAN

BARANGAN SIAP

RUANG PEMUNGAHAN BAHAN MENTAH & BARANGAN SIAP

Layout planning:- (cont)Finished products are classified.Customer friendly and convenience.Convenience space and reduce movement time.Easy machine maintenance & space cleaning.Easy supervisory job.Use optimum space utilise.Take consideration on future need.

Capacity PlanningCapacity (Units, projects size, booking)Operation Capacity Ratio (NKO)Capacity Used x 100 (%) Total Availability CapacityNKO indicated:-production operation abilityunder utilise/increase capacity capital budgeting (purchase machine or increase manpower)

Machine/Equipment Requirement PlanningDepend business operation types.Supplier and machines No of machines meet current and medium term demandTechnology lifecycleMeet saleable productTechnology knowledgeMaintenance, spare parts and after sales servicesMachines lifecycle and brand

Manpower Requirement PlanningDivide to Direct and Indirect laborDecide direct labor (permanent, contract, part time)Period of Contract/part time laborLabor salary/reward (expertise, experience, current market rate)

Raw Materials Requirement PlanningMaterials need (Production, retail (stock), services)60%-80% production costDirect and Indirect MaterialsPurchase decision (Quantity,Quality,Time,Supplies,Price)Four Planning stepsIdentify and list down the raw materials requiredPrepare the bill of materialsCalculate the quantity of raw material requiredIdentify supplier and purchase method

Process/System PlanningProcess: Work flow are need to be implemented (transform i/p to o/p).System: Right production process, tested and proven to meet specification and quality standard.Production system benefit:-Smooth production process, control cost and quality, improve productivity.Three Production Types:-BookingClusterFlow

Process Planning

SymbolType of ActivityDescriptionOperationActivities that modify, transform or give value to the input.TransportationTransport activity occurs when materials are transported form one point to another.InspectionActivity that measures standard of the in-process material, finished products or services.DelayThe symbol is used when in-process material is restrained in a location waiting for next activity.StorageThe symbol is used when the in-process materials or finished products ate storage area.

Production ScheduleMeet quantity, specifying and time plan according to sales forecast.Period next 6 months.Advantages:-Finish product inventory as a buffer.Avoid wastage and lost customer demand

Quality In ProductionQuality management: Customer satisfaction, loyalty, quality standard. Focus on cost of quality & prevention: product design and specification, continuous improvement (kaizen). Quality practices (QCC,SQC, SPC,TPM,JIT, 5S).Quality as a business strategy (competitive advantages)TQM,ISO recognition, Benchmarking, Balance Scoreboard, EVA

Operational CostOperational costs = Direct Material Cost + Direct Labor Cost + Overhead CostDirect material costs the money spent on materials that are directly used to produce the products or services. Direct labor costs the money paid as wages, salaries and benefits to the workers involved directly in the production of the products or services.Overhead costs include rent, insurance, wages of indirect labor, maintenance and depreciation.

Jadual 7.2: Cth Pengiraan Kos Pengeluaram (Ref P124)

Pengeluaran Produk XBulan Januari (30 hari)Kapasiti Pengeluaran setahun 500,000 unitKuantiti : 35,000 unitRM1.Bahan mentah digunakan 20,000 kgHg / kg = RM 0.6012,0002.Upah PekerjaRM30 / hari8 pekerja7,2003.Bahan api pengeluaran 600Jumlah Kos Langsung19,8003.Penyelenggaraan setahunRM 3,0004.Susut nilai Aset Tetap setahunRM 8,1255Lain overhed setahunRM 1,200

Cost Per UnitTotal Operational Cost (RM) Total Number of Output (Unit)

(By refer page 125)Kos Pengeluaran seunit X untuk bulan Januari :Kos pengeluaran Langsung RMBahan Mentah 12,000 Upah pekerja pengeluaran 7,200 Bahan Api 600 Jumlah Kos Langsung pengeluaran 19,800 *Kos Pengeluaran tidak langsung Susut nilai 569 Kos penyelenggaraan 250 Lain overhed kilang 100 Jumlah Kos Langsung pengeluaran 919 Jumlah Kos Pengeluaran 20,719 Kuantiti Pengeluaran 35,000 unit Oleh itu, kos pengeluaran seunit = RM 20,719 / 35,000 unit = RM 0.5948 atau 60 sen seunit.

Jadual 7.3: Latihan Pengiraan Kos Pengeluaram

Pengeluaran Produk XBulan Januari (25 hari)Kapasiti Pengeluaran setahun 650,000 unitKuantiti : 45,000 unitRM1.Bahan mentah digunakan 30,000 kgHg / kg = RM 0.70 ?2.Upah PekerjaRM 30 / hari8 pekerja ?3.Bahan api pengeluaran 600Jumlah Kos Langsung ?3.Penyelenggaraan setahunRM 3,6004.Susut nilai Aset Tetap setahunRM 9,0005Lain overhed setahunRM 1,200

Cost Per UnitKos Pengeluaran seunit X untuk bulan Januari :Kos pengeluaran Langsung RMBahan Mentah 21,000 Upah pekerja pengeluaran 6,000 Bahan Api 600 Jumlah Kos Langsung pengeluaran 27,600

*Kos Pengeluaran tidak langsung Susut nilai 623 Kos penyelenggaraan 300 Lain overhed kilang 100 Jumlah Kos Langsung pengeluaran 1023 Jumlah Kos Pengeluaran 28,623 Kuantiti Pengeluaran 45,000 unit Oleh itu, kos pengeluaran seunit = RM 28,623 / 45,000 unit = RM 0.6361 atau 64 sen seunit.

Operations BudgetFixed Asset cost: cost of building or buying the operations space (factory, shop etc) and any relevant renovation work as well as the purchase of machines and equipment.Monthly Expenses : cover material cost, remuneration and all the factory overhead.Other Expenses : deposit on factory rental, deposit utilities, insurance etc.

Jadual 7.1 : Contoh Anggaran Bajet Pengeluaran (P122)

JENIS PERBELANJAANANGGARAN KOS (RM)ABelanja ModalUbahsuai Kilang20,000Mesin dan Peralatan Pengeluaran35,000Perabot dan Kelangkapan5,000Lain peralatan pengeluaran5,000 Jumlah belanja modal65,000

BModal Kerja ( 3 bulan )Belian bahan Mentah4,000Gaji / upah pekerja Pengeluaran6,000Sewa kilang6,000Elektrik / bahan api kilang1,000Penyelenggaraan bangunan / mesin500 Jumlah modal kerja pengeluaran17,500

Jumlah Bajet Pengeluaran82,500