MANAGE OPERATIONAL PLAN FACILITATOR MANUAL & ASSESSMENT BSBMGT515A

Transcription

1 MANAGE OPERATIONAL PLAN FACILITATOR MANUAL & ASSESSMENT BSBMGT515A

2 Precision Group (Australia) Pty Ltd 9 Koppen Tce, Cairns, QLD, info@precisiongroup.com.au Website: BSBMGT515A Manage Operational Plan ISBN: Copyright Notice No part of this book may be reproduced in any form or by any means, electronic or mechanical, including photocopying or recording, or by an information retrieval system without written permission from Precision Group (Australia) Pty Ltd. Legal action may be taken against any person who infringes their copyright through unauthorised copying. These terms are subject to the conditions prescribed under the Australian Copyright Act Copying for Educational Purposes The Australian Copyright Act 1968 allows 10% of this book to be copied by any educational institute for educational purposes, provided that the institute (or the body that administers it) has given a remuneration notice to the Copyright Agency Limited (CAL) under the Act. For more information, info@copyright. com.au or visit for other contact details. Disclaimer Precision Group has made a great effort to ensure that this material is free from error or omissions. However, you should conduct your own enquiries and seek professional advice before relying on any fact, statement or matter contained in this book. Precision Group (Australia) Pty Ltd is not responsible for any injury, loss or damage as a result of material included or omitted from this material. Information in this course material is current at the time of publication.

3 Table of Contents 2 Legend 3 Qualification Pathways 4 Qualification Rules 5 Introduction 7 BSBMGT515A/01 Develop Operational Plan Key Points Research, analyse and document resource requirements and develop an operational plan in consultation with relevant personnel, colleagues and specialist resource managers Develop and/or implement consultation processes as an integral part of the operational planning process Ensure details of the operational plan include the development of key performance indicators to measure organisational performance Develop and implement contingency plans at appropriate stages of operational planning Ensure the development and presentation of proposals for resource requirements is supported by a variety of information sources and seek specialist advice as required Obtain approval for plan from relevant parties and ensure understanding among work teams involved 19 True or False Quiz 21 BSBMGT515A/02 Plan and Manage Resource Acquisition Key Points Develop and implement strategies to ensure that employees are recruited and/or inducted within the organisation s human resources management policies and practices Develop and implement strategies to ensure that physical resources and services are acquired in accordance with the organisation s policies, practices and procedures 33 True or False Quiz 35 BSBMGT515A/03 Monitor and Review Operational Performance Key Points Develop, monitor and review performance systems and processes to assess progress in achieving profit and productivity plans and targets Analyse and interpret budget and actual financial information to monitor and review profit and productivity performance Identify areas of underperformance, recommend solutions, and take prompt action to rectify the situation Plan and implement systems to ensure that mentoring and coaching are provided to support individuals and teams to effectively, economically and safely use resources Negotiate recommendations for variations to operational plans and gain approval from designated persons/groups Develop and implement systems to ensure that procedures and records associated with documenting performance are managed in accordance with organisational requirements 45 True or False Quiz 46 Summary 47 Bibliography 49 Assessment Pack 1

4 Use considered risk taking in your grey area...and others will follow you! Legend This symbol indicates the beginning of new content. The bold title matches the content of the competency and they will help you to find the section to reference for your assessment activities. Activity: Whenever you see this symbol, there is an activity to carry out which has been designed to help reinforce the learning about the topic and take some action. This symbol is used at the end of a section to indicate the summary key points of the previous section. This symbol is used to indicate an answer to the Candidate s questions or notes to assist the Facilitator. 2

5 Qualification Pathways There are always two choices. Two paths to take. One is easy. And its only reward is that it s easy. Source Unknown This unit of competency is provided to meet the requirements of BSB07 Business Services Training Package although it can be used in a range of different qualifications. The BSB07 Business Services Training Package does not state how a qualification is to be achieved. Rather, Registered Training Organisations are required to use the qualification rules to ensure the needs of the learner and business customer are met. This is to be achieved through the development of effective learning programs delivered in an order that meets the stated needs of nominated Candidates and business customers. 3

6 Qualification Rules You re either part of the solution or part of the problem. Eldridge Cleaver Qualification requirements include core and elective units. The unit mix is determined by specific unit of competency requirements which are stated in the qualification description. Registered Training Organisations then work with learners and business customers to select elective units relevant to the work outcome, local industry requirements and the qualification level. All vocational education qualifications must lead to a work outcome. BSB07 Business Services Training Package qualifications allow for Registered Training Organisations (RTOs) to vary programs to meet: Specific needs of a business or group of businesses. Skill needs of a locality or a particular industry application of business skills. Maximum employability of a group of students or an individual. When packaging a qualification elective units are to be selected from an equivalent level qualification unless otherwise stated. 4

7 Introduction Whether as an individual, or as part of a group, real progress depends on entering whole-heartedly into the process and being motivated to make you a more deeply satisfied human being. Source Unknown This unit of competency is all about being able to manage operational plans in your workplace. It will help you with the skills you need to demonstrate competency for the unit BSBMGT515A Manage Operational Plan. This is one of the units that make up the Diplomas in Business. This manual is broken up into three distinct sections. They are: 1. Develop Operational Plan. 2. Plan and Manage Resource Acquisition. 3. Monitor and Review Operational Performance. At the conclusion of this training you will be asked to complete an Assessment Pack for this unit of competency. The information contained in this resource will assist you to complete this task. On conclusion of this unit of competency you will have demonstrated your ability to develop and monitor implementation of the operational plan to provide efficient and effective workplace practices within the organisation s productivity and profitability plans. 5

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9 PART 1: Develop Operational Plan Key Points Section 1 When developing a new operational plan, it is important that you research the resources that you require in order to implement your plan. These resources may be physical in nature or may include your human resources. Your operational plan should be developed in association with relevant personnel, colleagues and specialist resource managers. The planning for a new operation should include processes for consulting others in order to get their ideas and opinions. Your operational plan should contribute to the achievement of your organisation s overall goals and business plans. Within an operational plan should be Key Performance Indicators. These indicators will allow you to measure how well your plan is working in relation to your goals and objectives. A good operational plan should include contingency plans which will swing into action whenever a contingency occurs. Your plans and proposals should be assisted by using a range of information sources and where appropriate specialist advice (from purchasing officers and human resources managers) should be sought. 7

10 Business Planning Business planning is aimed at attempting to bring a new idea into fruition within an organisation. Such a plan needs to be divided up into sections which allow the business managers to understand what you are trying to do and the direction that you will take in order to get there. We have provided a table below that outlines the major sections of just such a plan. Each section is detailed with the types of material it should contain and the order in which it should be presented. Following this plan will allow you to develop a business model that will enable you, as a business manager, to present your ideas in a marketable manner. However, you should not underestimate business requirements. Each organisation may have a specific manner in which it likes plans to be presented. Where this is applicable, be sure that you follow these conventions. The Components of a Written Operational Plan General Format and Presentation Cover Page and Table of Contents Business Background Action Plans Financial Projections Appendix For the most part, be sure that the plan is actually identifiable as such. The reader needs to know that you are presenting a plan or proposal for an idea which may be used in the future. By presenting it as a plan, you can be sure that those people who will be tasked as reading it will take it as such and give it the relevant consideration. Business managers also know what to expect from the sections of a written plan, so presenting it in this format allows the reader to know what to expect and where to find relevant sections within the plan. The first major section should be the coversheet, which should identify the title of the plan and who prepared it. It may also prove useful to write who the plan was written for where this is a relevant piece of information. The table of contents should be big enough to allow the reader to find what they want with ease. In this section, you need to provide your reader with an overview of the business as it stands right now. This should cover the structure of the business, its history and the markets which it sells in, as well as providing information about the products and services that it offers. This is where you detail how operational and management issues will be resolved, including contingency planning. Then, you should move on to examine financial projections. This section should outline historical financial information and where you see the organisation heading once the plan itself has been implemented. Finally, use the appendix to provide the reader with more detail on previous sections don t overwhelm the reader, however. 8

11 When you are writing an operational plan, it is important to consider a number of factors regarding your business. You might look at financial performance, market environment, inventory, the product mix that you are offering, and more. The products and services on offer are of particular importance to most plans in business. Businesses exist to sell products or services, so being sure that you outline the way that a product plan will impact on the way that products or services are offered is critical. A plan may involve new products being introduced, old products being discontinued or even the mix of products on offer being altered. If any of these are present in your plan, you need to examine the impact that they would have on the plan s introduction. You also need to convey information on each major issue that you foresee within the plan. Your reader wants to know that you have carefully considered the implications of the plan and how they may impact on how the market perceives your products and services. So it is extremely important that you can demonstrate to the reader you have considered these. Think about things such as personnel needs, resourcing requirements, and changes to machinery, the need to employ contractors, and more The more that you can detail to your end user about the performance of your organisation and the way that the plan will impact on this performance, the more favourable the plan as a whole will seem. We have presented, on the previous page, a template that you may like to follow when developing an operational plan for use within an organisation but as we mentioned this is only one possibility. The actual design and order of your plan may vary significantly from this, depending on the actual work that needs to be undertaken. In fact only the coversheet and table of contents may remain in tact. We will look at how you structure your plan later in this section. Plans and the planning process are as crucial to management as they are to builders. They guide you into making decisions that will ensure that your organisation heads in the right direction, and ultimately achieves all the goals set for it. 9

12 Operational Plans The operation plan should cover all issues that you consider to be important in regards to the specific plan that you are working on. These issues will change depending on whether your plan involves people, goods, services or other types of operational implications. Think about how the differences between a supermarket plan and an IT consultant would vary one needs significant inventory and Fast Moving Consumer Goods (FMCG) experience, the other is not actually selling any physical goods. So the planning behind each would be significantly different. As well as an organisation s primary role which will be providing goods or services of some description, every organisation also has a number of functions that align with this to ensure that its primary role is actually achieved. Think again about our supermarket who supplies consumer goods to the end customer. This, as well as selling, involves logistics, warehousing, food hygiene, packaging, finance, human resources and much more. Think about how the goods or services move through your organisation and you will notice that there are a large number of steps that a product or service actually passes through from beginning to end. All types of businesses operate as a production process. You may not produce the goods, but the goods do arrive in one form packaged up in a box) and end up in another a bag in the consumer s hand. So even if you aren t in the business of production you do need to consider the way that your business systems transform the product from one form to another. So carefully consider your business systems and the way in which they convert the goods or take human resources and turn them into a consumer service. Let s now take a look at the basic steps that should be taken to plan a new product, service or process within a modern organisation. Define Organisation s Mission Set Objectives for the Organisation Create Strategies for Competitive Differentiation Evaluate results and refine the plan Assess Competitive Position Turn Strategy into Action Feedback 10

13 Resource Requirements We discussed previously how an organisation works to transform resources from one form to another, and how this is usually the organisation s primary role. Let s now look at the type of resources that an organisation uses in order to get this transformation to occur. There are generally two types of resource that are used in any organisation human resources and physical resources. Physical Resources Physical resources are any resource that you can buy, feel and touch. In order to account for these, make a list of everything that you need and try to make a list of the costs of each. This can allow you to account for how much the production processes are likely to cost. The major types of resources are as follows (along with their associated costs): Premises Equipment Vehicles Raw Materials Rent; rates; service costs (heating, lighting, cleaning, security) and structural alterations Costs of purchase, hire or lease; insurance, running costs (service, repair) Costs of purchase, hire or lease; insurance, road tax; running costs (service, repair) Purchase cost (investigate discount for bulk orders), cost of storage (any special requirements for refrigeration or hazardous substances) Human Resources As well as the physical resources, you must account for the cost of those people that exist within the organisation. You will be spending a lot of money on wages, salaries and other forms of remuneration this may in fact be a huge part of your budgetary expenses. However, often people forget to account for the cost of actually acquiring new staff members (which in itself can be a significant expense). This about how much it costs to hire someone in terms of: Advertising in newspapers and other media. The time and organisation associated with the recruitment and sorting processes. The cost of running interviews and associated testing. Insurance. Each of these costs may be significant when you are introducing new processes into a business, which may require new staff to be employed. Try to be as accurate as you can with any costing that you make. Look back on previous processes of recruitment and selection and attempt to determine how much they cost you. If you do not allocate enough money for these tasks you risk blowing the budget and making your plan seem more expensive than it otherwise might be. 11

14 In life, as in football, you won t go far unless you know where the goalposts are. Arnold H. Glasgow Capital Now that you have an indication of the resources that you may need to make your plan a reality, it is time to determine exactly how much money you will need and how you might fund it. Financing the plan can be accomplished in a number of ways, so you need to look at the types of costs that make up your budget. First, consider your fixed costs. This is the cost of actually acquiring the new equipment that you will need to make the plan actually happen. What land, buildings and machinery might you need. Then you need to consider those variable costs that allow you to actually put the plan into action on an ongoing basis. This might include wages, power, rent, telephone and any other working expense. These need to be covered by your initial financing until such a time that the organisation actually begins to pay its own way. At that point it will fund itself. So you need to look for that break even point. Your budget should be broken down into monthly or quarterly periods, which allow you to step back and look at how different periods may affect the amount of money that you expect to spend. Winter for example may require extra power for heating in the factory or shop, however the training expenses will be greatest during the first month or two and after that will reduce significantly. 12

15 Then also forecast the amount of money you expect to bring in on a monthly basis and compare this to your expenses. If you are not expecting to make a profit, this is capital that will need to be funded in some way to get the operation off the ground. Be Realistic Let s face it, when you are preparing a new plan you want to paint as rosy a picture as you possibly can. You want people to say, that looks great, let s do it!. However from a business planning point of view this can be a recipe for disaster. If you over promise and under deliver you are going to be left wanting or needing more resources to actually get the plan back on track. Worse still, it may leave you with not enough money to run in the first place. This means that it is better to be realistic about where you expect costs to be rather than promise too much and find yourself short of essential resources during the crucial initial monhs. Use your resources wisely and ensure that you have enough so you are not going to your bank and begging for more money. Key Performance Indicators Now, we will look at performance indicators within business planning. Your plan should have a monitoring system built into it that allows you to determine just where your plan should be heading and how you are going to check on its progress. This is usually accomplished through the use of KPI. Once you know what you want your plan to achieve and how you are going to get there, you need to ensure that you have identified ways in which you can prove to your stakeholders and financers how well things are actually going. What Are Key Performance Indicators (KPI)? Key Performance Indicators are a tool that is used to provide a quantitative measure of performance against predefined targets. They represent the critical factors that must be met for a project to be taken as successful. The actual measures that you use may vary significantly from organisation to organisation, but there are some key measures which are often common, such as: Achievement of a certain level of sales Achievement of a certain level of customer satisfaction A specific rate of return being achieved A given market share being achieved. 13

16 Key Performance Indicators allow you to ensure that you are reaching your overall business goals and objectives. Your Performance indicators need to be an accurate reflection of your organisational mission and vision. Without this alignment, you may find that you are unable to conclusively show that you plan is actually working in the interests of the organisation as a whole. KPIs are generally medium to long term in nature as projects are difficult to show as being successful in the long term and they definitely need to be measurable and have an element of being time-based so you know when an achievement should be reached. Let s take some time to look at each of these statements in a little more detail. Organisational Goals Think about overall performance goals carefully. If your organisation has an overall goal of being a socially equitable organisation you may have measures that examine charitable contributions reaching 5% of profit or environmental performance measures. An organisation whose key focus is on being highly profitable will need measures of after tax profit, and shareholder equity. A non-profit will have different goals and indicators than for a profit organisation. The indicators must be relevant to the work the organisation is undertaking Measurable As well as your key indicators being focussed on goals, they actually must be able to be measured. The value in any indicator is their ability to show you where you are working well and where problems exist. This can only be done by ensuring that each measure that you provide is actually able to be measured in some way. Measures must be quantified to allow them to actually be measured. Saying that you want to be the most popular organisation in Australia is a lofty goal, but one which is not able to be easily quantified. Adding an actual measure such as To have 95% of people in Australia being able to recognise our logo is a goal that can be measured through survey methods. Consistency KPI must also be consistent. You can not change the way you define profit from before tax profit to after tax profit on a whim as this will make a huge difference when it comes to comparing your results from year to year. KPIs should change as little as possible from one period to the next. This change should be minor; if you are continually moving the bar the organisation will have difficulty in actually reaching it, as all the plans behind the KPI will have to change to met the new goals. Let s now consider a couple of examples of KPI and look at whether they are useful or not. Each KPI that you write should be structured along these lines with a simple title, a definition of what you are measuring, the actual measure itself and the target you are trying to attain. 14

17 Appropriate Key Performance Indicators vs. Inappropriate Inappropriate: Title of KPI: Increase sales. Defined: Change in Sales volume from month to month. Measured: Total of Sales by region for all regions. Target: Increase each month. What s missing? Does this measure unit rejection for all the organisation or specific sections? What type of rejections need to be measured, all, some defects? By how much should the defects decrease in order for the measure to be consider attained? How do we ensure all rejects are counted? Do we want a percentage decrease i.e. 10% or a decrease in the number of rejected units? Appropriate: Title of KPI: Reduce defects in manufacturing processes. Defined: The total number of units that are rejected by our quality inspectors during any stage of the production process as having defects that are large enough for the unit to be withdrawn from sale. Measured: Quality inspector logs will be read and a percentage of defective units will be drawn up and compared to total production for a given period to produce a defect rate percentages. Target: Reduce manufacturing defects by 15% over the year. What Do I Do With Key Performance Indicators? Now that you have developed an effective set of KPI for your organisation, ones that are consistent, measurable and align with organisational goals you can begin the process of measuring and evaluating your overall performance. The KPIs give the staff and management within your organisation clear guidance about where you need to head and what you need to do to be successful. The KPI should be displayed within the organisation prominently, so that all staff are kept abreast of what they need to be striving for to make the organisation an effective one. This allows you to ensure that everything your staff do is focused on meeting or exceeding those KPI. 15

18 Contingency Planning Planning is all about looking at what you want to happen and making sure that it does. No matter how well you plan, there will always be issues that crop up that will take you off track and things that you need to work on to make sure that you achieve everything you want to happen. Because a plan involves things that have not happened yet, they also include areas where you have had to assume certain information. What if the assumptions you based your plan on never eventuate? What do you do then? What if the bank doesn t give you a loan? What if interest rates rise too quickly? What if your factory burns down? What if Contingency planning is all about asking What if? It asks for you to consider what could potentially happen to evaluate the risk of it occurring and the impact if it did and uses this as a way of planning around the events should they occur. So, let s look at an example. You ask the bank to lend you money to allow you to put your plan into action. Your calculations show an interest rate of 6.5% would allow you to make a profit and at 7% you could still break even. What would you do if when you negotiated your rate the bank sets it at 9%? What impact would this have and how would you work around it? Contingencies occur all the time in business; it is the planning you do to get around the situation which is most important. Consider your SWOT analysis and look at the weaknesses and the threats in particular. These will show you where contingencies might occur. A major new business opening up in your market is a threat which you may need to write a contingency plan around how will you react to this situation? Add heavy promotion? Reduce prices on key lines? Financial contingency problems can be added into your financial statements by adding relevant comments or perhaps by having a set of financial figures that reflect the lowest possible figures as well as the most likely. Your discussion and action plans within your business planning documents could also reflect this information. You might, for example, add comments to your staffing sections about certain situations and how you would react in them. You might say that if the market changes you may need an extra 30 staff to achieve your desired results and comment on the financial implications of such a situation. Contingency planning is useful, but often you can not look at everything. There are too many things that can go wrong and you need to consider: Those things that are most likely to happen Those things which will have the highest level of impact on the organisation as a whole. 16

19 Contingency planning allows you to know what to do when alarm bells sound in any part of your business. 17

20 Activity One Why is contingency planning important? How large do you feel a company should be before it begins to plan for contingencies? What is the difference between an operational plan and a strategic plan? Facilitator s Notes for Activity One 1. Contingency planning gives an organisation a set of procedures to follow if an unexpected event occurs. It is important because it reduces the effect of such an event. All organisations should have some form of contingency planning. 2. Strategic plans set a direction for an organisation operational plans put procedures in place to meet those objectives. 18

21 Section 1 - True or False Quiz True False An operational plan can be presented in any format. It should be easily recognisable as an operational plan. Appendices are used to provide additional information. If your business relies on specialist labour, this should be outlined carefully in your plan. Questions raised by a plan should only need to be answered in the Risks mind should of the reader. be continually monitored. The plan itself should document any such answers. Businesses should be looked at as if they are linear in nature. The planning process begins with identifying the organisational mission. Risks People should are an be example continually of a physical monitored. resource. They are your organisation s human resources. It s important to be as accurate as possible in your costings. Fixed capital is the money you will need on a regular basis to pay for your expenses. This is your working capital. It is critical to limit your Key Performance Indicators to those factors that are essential to the organisation reaching its goals. 19