Running head: OPERATION, TECHNOLOGY, AND MANAGEMENT PLAN 1
OPERATION, TECHNOLOGY, AND MANAGEMENT PLAN
Operation, Technology, and Management Plan
Key aspects of operations
The facility will be located in Samut Prakan, Thailand, a location that has been selected due to its close proximity to consumers. Processing of the beverages will require equipment such as process skis, transfer panels, hot water sets, utility stations, and holding tubes. According to Rahim and Raman (2015), the beverage production process involves treating water, which goes through a filtration process and afterwards a deoxygenating process. After the water has been treated, the next step involves the creation of syrup by mixing concentrate and sugar in a reservoir tank. The syrup then undergoes a clarification and infiltration process. The purified water and syrup are mixed in a filler tank, and carbon dioxide is injected into the blend, after which the beverage is bottled and moved into a conveyor belt prior to packaging. Packaging is then done in different sizes, and the products are stored in the warehouse ready for shipping. Automation plays a large role in ensuring product consistency, quality, and cost.
Cost and time efficiencies
The business will incur operational costs involving payment of wages, purchase of equipment, leasing of land and buildings, legal costs the purchase of raw materials and supplies, as well as marketing and administrative expenses. The entire production process will necessitate a variety of skills involving mechanical operators, programmers, marketing professionals, administrative, and support staff. The Fruitfit Company will need a manufacturing facility, a warehouse, and an administrative block. The raw materials will be source from local farmers. Fruitfit will have contracts with farmers to provide a constant supply of raw materials. Also, a key aspect of the operation will involve transportation as the products will need to be distributed to grocery stores, convenience stores, and other partners involved in the distribution of the products to final customers. Time efficiencies may be gained by the utilization of automation to ensure the maintenance of quality (Hitomi, 2017). The facilities will be bought instead of being rented or leased, which will increase short-term costs but will provide long-term cost advantages. The business will continue adding new products to its portfolio based on market demands. Research and development will play a major role in new product development. Research will be conducted through the social media and through gaining access to readily available industry insights.
Fruitfit will achieve competitive advantage by providing customers with better value in terms of product quality, price, and availability. Functional level competitive advantage will be achieved by pursuing cost-effectiveness through pursuing efficiency in the production process and implementing a culture of continuous learning that will spur innovation. As stated by Hill, Jones, and Schilling (2015), functional-level strategies provide a business with competitive advantage by making the firm superior. On the other hand, business-level strategies provide it with competitive advantage by enhancing the value provided to customers. Thus, Fruitfit will pursue business-level strategies through focusing on the needs of the target customer segment and ensuring that its products are affordable, timely, and of high quality. The operational process of the business will be designed in such a manner that will cut costs so that customers can pay reduced prices for the final product and access them easily.
Problems Addressed and Overcome
One of the challenges that could potentially compromise the success of Fruitfit is lack of capital. According to Scarborough (2016), a majority of startup companies fail due to lack of capital for day-to-day operations. Nonetheless, funds will be sourced from financial institutions and an angel investor. Another potential problem that could hamper the success of the company is lack of continuous supply of fruits and other supplies. However, the company will engage in long-term contracts with farmers that will ensure timely supply of materials and raw products.
The company will utilize a just-in time inventory that will minimize costs and ensure that only the needed amount of materials are within the facilities. The implementation of the just-in-time inventory strategy entails the implementation of technology to oversee the process from ordering materials, receiving them, and distributing final products to distributors and retailers (Lai & Cheng, 2016). The technology will be situated on-premise. Fruitfit will need to back up its data in the cloud so that it can be readily accessed even when the company’s servers are down. The business will also need enterprise resource planning (ERP) for quality analysis, production analysis, dashboard analytics for sales and inventory, and resource planning and management.
The types of hardware that will be needed by the business include computers, hard drives that store software, and memory chips.
Telecommunication needs involve internet access to facilitate communication with internal organizational members and external parties. The business will also require telephone services that will also facilitate communication. Retailers can use the services to make product enquiries while the business may use it to communicate with suppliers. Fruitfit will activate its website that will provide pertinent communication to interested parties and provide a medium through they can contact the business. Also, email will be used as a communication method both within and outside the organization.
Fruitfit will utilize both in-house an outsourced personnel. In-house personnel will include technicians, operators, administrative, and support staff. However, marketing and customer care staff will be outsourced. The benefit of outsourcing is that it ensures that the organization gets the best expertise at a fraction of the cost (Gunasekaran, Irani, Choy, Filippi, & Papadopoulos, 2015). It would be expensive to hire, train, and develop individuals working in marketing and customer service departments. Therefore, it is preferable to outsource the two functions as they are not critical and can be performed by third parties.
Management and Organization
Key management and employees
The management will be comprised of the chairman, who will also occupy the CEO position. Five managers will report to the CEO, each manager representing productions and operations, planning and performance management, marketing, finance, and technology. The managers will head over CEOs and other staff in each department.
Board members and advisors
The business will be comprised of four board of governors who will be represented by the CEO, the angel investor, and two other board members who have expertise in the beverage manufacturing industry.
Management structure and style
Each of the managers will report directly to the CEO. The managers will be responsible for overseeing the day-to-day operations of the business and for reporting to the CEO in case of emerging issues or critical decisions. The CEO will have the authority to make pertinent decisions that affect each department. Below is a diagram showing the management hierarchy.
Flow-chart showing Fruitfit’s management hierarchy
The management hierarchy has been structure in a manner that shows level of authority and their corresponding functions. According to Carley and Prietula (2014), new organizations benefit from a hierarchical organization structure as the members may not have gained expertise in their roles, and they need distinct roles and responsibilities so that the organization can function seamlessly. Similarly, Fruitfit has adopted a hierarchical management structure to enhance efficiency.
Carley, K. M., & Prietula, M. J. (2014). The” virtual design team”: Simulating how organization structure and information processing tools affect team performance. In Computational organization theory (pp. 19-36). Psychology Press.
Gunasekaran, A., Irani, Z., Choy, K. L., Filippi, L., & Papadopoulos, T. (2015). Performance measures and metrics in outsourcing decisions: A review for research and applications. International Journal of Production Economics, 161, 153-166.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2015). Strategic management theory. Cengage Learning.
Hitomi, K. (2017). Manufacturing Systems Engineering: A Unified Approach to Manufacturing Technology, Production Management and Industrial Economics. Routledge.
Lai, K. H., & Cheng, T. E. (2016). Just-in-time logistics. Routledge.
Rahim, R., & Raman, A. A. A. (2015). Cleaner production implementation in a fruit juice production plant. Journal of Cleaner Production, 101, 215-221.
Scarborough, N. M. (2016). Essentials of entrepreneurship and small business management. Pearson.