Question

Develop an action plan for your business that clearly documents how operational strategies will be developed, implemented, reviewed and updated as required. Detail your operational targets and the criteria against which business success will be measured.

How will you conduct the relevant assessments? The following things should be taken into consideration when developing the action plan and describing operational targets:

health and safety

environmental concerns

technology quality assurance

innovation

changing customer requirements

stock control

expenditure/ cost control

wastage/ shrinkage control

staffing compliance with technical, legal and ethical standards

time, quality and cost control to meet customer expectations

design, development and implementation of KRAs and KPIs

use of innovative ideas

continuing market research activities

adjustments and improvements to plans, goals and objectives, over time

Answer 1

Action Plan:

An action plan details the concrete steps needed to attain your goals, usually covering the coming year, a timetable for each task,design, development and implementation of KRAs and KPIs, a description of who will do what and a follow-up process.The action plan is typically created at the end of the strategic planning process, after you’ve set out your vision, done a SWOT analysis and established objectives.

1. Involve your team

You’ll get the best team buy-in if as many employees as possible are involved in creating the action plan and staffing compliance with technical, legal and ethical standards. Employees can give invaluable input on what steps are needed to achieve your objectives and how best to implement them. As well, they are more likely to work diligently on implementation if they are involved in the process from the outset.

2. List actions

The core of the action plan is a list of tasks for achieving your objectives. They can include everything from arranging financing to buying equipment or a vehicle, hiring staff with specific expertise or developing a website, innovation, changing customer requirements, stock control, time, quality and cost control to meet customer expectations. Each action should be clearly described so as to avoid confusion later on.

3. Set a timeline

Now establish a time frame for achieving each action and to make adjustments and improvements to plans, goals and objectives, over time.

4. Designate resources

Name who will be responsible for each action. Also outline what other resources (money, equipment, personnel) you’ll need to carry out the action.

5. Establish a follow-up and measurement process

Spell out how you will follow up on the action plan to ensure the steps are carried out. This can include internal reporting and regular meetings held to discuss the plan’s progress.Also specify the measures you will use to track implementation. These can include both milestones, such as the completion of certain tasks, and quantifiable measures, such as revenue or market share.

6. Communicate the plan

Make sure all employees are aware of the action plan, including their role in implementing it. Explain how the plan fits into your overall business strategy.

7. Keep the plan alive

When you get started on implementing your action plan, you should be disciplined about sticking to the follow-up and measurement process you’ve outlined. It’s also useful to recognize employees for meeting or surpassing their responsibilities and hold them accountable for failing to do so.

Operational Targets:

Cost & volume targets: However it chooses to compete, a business needs to ensure that operations are cost-effective.The traditional measure of cost-effectiveness is "unit cost" – the average cost of producing a unit of the product. Businesses competing in the same industry face similar cost structures, but each will vary in terms of its productivity, efficiency and scale of production. The business with the lowest unit cost is in a strong position to be able to compete by being able to offer the lowest price, or make the highest profit margin at the average industry price. Stock control should also be done.

Objectives relating to cost and volume tend to focus on:

• Productivity & efficiency
• Unit costs per item
• Contribution per unit
• Number of items to produce (per time period, or per machine etc)

Quality targets: Achieving or exceeding the required level of quality is also essential for a successful business.

There are many ways of measuring the achievement of "quality", including:

• Technology quality assurance
• Scrap / defect rates: a measure of poor quality
• Reliability – how often something goes wrong; average lifetime use etc
• Customer satisfaction – measured by customer research
• Number / incidence of customer complaints
• Customer loyalty – e.g. percentage of repeat business

Efficiency and flexibility targets: Closely linked to cost, efficiency and flexibility targets look at how effectively the assets of the business are being utilised, and how responsive the business can be to short-term or unexpected changes in demand. Efficiency and flexibility are key drivers of unit costs. Relevant objectives would include:

• Labour productivity: e.g. output per employee, units produced per production line; sales per shop
• Output per time period: e.g. potential output per week on a normal shift basis; potential output assuming certain levels of capacity utilisation.
• Continuing market research activities
• Capacity utilisation: the proportion of potential output actually being achieved
• Order lead times: e.g. the time taken between receiving and processing an order

Environmental targets: Now-a-days health and safety is most important for all the environmental concerns. We need to take care of our environment by some of our activities like wastage/ shrinkage control, recycling, etc. This is an increasingly important focus of operational targets as businesses face more stringent environmental legislation and consumers increasingly base their buying decisions on firms that take environmental responsibility seriously. Examples include:

• Use of energy
• Proportion of production materials that are recycled
• Compliance with waste disposal regulations / proportion of waste to landfill
• Supplies of raw materials from sustainable sources.

Business success will be measured by its profit. The easy way of measure is basically profit for any type of business. Apart from profit there are many other important things by which business success can be measured. They are business goodwill, financial viability, customer satisfaction, employee satisfaction, and contribution to society.