Introduction
A basic operations plan can be classified as an informational resource that facilitates the growth and development of a business organization. The fundamental elements of an operations plan are a process map indicating the improvement strategy, an organizational chat and a risk matrix. The basic operations plan is essential in standardizing the aspects of a business such a Steelville Works. A business plan also provides details and overarch the information essential for a business development. The paper discusses the executive summary and the inventory controls which form a fundamental part for a basic operations plan.
Executive summary
Every organization wants to have control of their stocks or services offered to their customers. In other word inventory control is a more important component to an organization both the starting and the big business organizations. The reason being that every organization wants to monitor and keep track of their goods. However, in the market, there are more factors to consider before applying the inventory controls. One of which is the demand of the stock an organization is operating on. The demand for an item or the organization stock may have an effect on the levels in which the inventory is applied and the strategies used to control the inventory.
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Additionally, different stocks have different demand effects according to the existing market, therefore, an organization operation helps to enhance the inventory control must need to have a deep understanding of the investigated market area. With the emerging demand components as well, a regular update to the particular organizations owing the same is vital (Steiner, 2010). Other than studying the market to get new updates of the changing demands to help the organizations know what level and strategies they should use to control the various inventories, the emerging technologies that would help in applying these inventories should as well be explored to allow the company to move with the technology (Steiner, 2010). These new ideas, which would be a recommendation to the various personnel such as the managers, are encouraged to be used as they can make the inventory control even easier. Other than that, it will help them in growing with the changing demand that exists in the marketplace. Generally, this report will discuss the outlined bits of the basic operation plan in a detailed manner to help in guiding the growing companies on what is to done best.
Location.
A location is a physical address in which a business or company operates. It is in important for operation plan as it helps the address of the business be known and looked into if it doesn’t suit the type of the particular business.
Inventory control
According to (Matt &Aberdeen, 2012), Inventory control which is as well-known as the stock control, is a procedure of ensuring that the correct volumes of stocks are sustained by a business, to enable the business to reach and maintain the demand of the customers with no delays as it keeps the costs allied to the particular stocks to the minimum level. Inventory control encompasses maximizing and regulating the business’ inventory. The inventory control aims to realize more profits with fewer investments of the inventory and without affecting the levels of satisfaction of the customers. Inventory control also involves knowing the whereabouts of the stocks and ensure that all things or items are accounted for every particular time.
Inventory controls have different impacts according to the level at which they are applied, and the strategies are taken to apply them. These inventory levels and strategy, in turn, are impacted on the by changes in demand. Demand planning can only become easy to plan if the company understands the changes in demand. The business should as well as understand the customer's expectations. Demand management, as defined by (Relph & Milner, 2015), is a responsibility of the marketing organizations. This means that the demand forecast is the outcome of the planned efforts of marketing. When assessing the planning of the demand, there are some major factors to consider. These factors are materials and resources. The relation between the two named aspects gives the extent on how to influence and prioritize demand. Effective inventory management and demand planning is the main way to gain a competitive advantage. For instance, the cost of holding the stock can eat the profit so fast.
Additionally, it increases the necessity of giving incomparable services level which is the current rule. Planning of the demand reassures the business to take a view of the aspects that are “pulling” actual sales. These factors include the trend, demands of the consumers and specified promotions. With these factors, supply chain and production resources can be adjusted consequently. Demand often has certain effects which are important to be applied in the setting of the inventory levels (Ton & Raman, 2010). Because the demand function is likely to change, the effect on the inventory sales maximizes above the available effect. The optimal inventory levels are also likely to be bigger than the ones suggested to the problem. In most cases, the example of such inventory is the sell-out frequency which can lead to very low levels of inventory. Altering the demand analysis focus can result in several positive impacts like; improved cost control and supply chain capacity, a reduced inventory, flexibility, responsiveness, increased supply chain, and increased customer service.
However, the levels and strategies of the inventory can be affected by the demand change that is as a result of demand components. Demand visibility: This is an important feature of a demand drove supply chain strategy. It can be used to give an unprecedented real-time view of inventory and sales by the manufacturers at the distributor level (Crum & Palmatier, 2003). The manufacturers can as well use it to drive revenue proactively by tracking the minimum inventory level at the distributors level, empowering the increase of production and supply management. This can be made easily since the system gives an alert on low stocks and prevents loss of sale.
How inventory control benefits from the demand visibility
Other overall ideas on the way the manufacturers can benefit from the increased demand visibility in their inventory control and production planning have been obtained. (Silver et al. , 2016), gives the information about founding the inventory control and planning of the production on the sales using the data that are collected from the customers, though does not discuss the implementation practically. The analytic design that would be used to study the results of the information sharing in the two-level supply chain was developed by (Crum & Palmatier, 2003). The cost and inventory level quantity of this design is shared openly among the retailers and manufacturers if any information is needed as compared to when only the orders could be placed. A similar idea of controlling the inventory and manufacturers’ production while using the sell-through data of a customer other than using the delivery of the order data. Currently, rare cases are bringing the availability of partial information that is discussed to be linked to inventory control and production planning to be not researched on. There is no inventory control or production solution that will utilize the demand information that is available for the customers as obtained.
Having done wide research on the inventory control, demonstrating that the current levels of inventory which is a combined effect of inventory have a size that cannot be explained by the presence of the effect only, but is as a result of the changing basic demand function. Also, we see that there are some cross-brand results (Ton & Raman, 2010). A change in the levels of the inventory in a publication impacts the sales of the two others. The consequences of such crossed results for the policies of inventory lies under the postulation of the demand that is exogenous.
Warehouse.
Warehouse is a particular location or building that can be used by a business like a store room for keeping any item that is not in use or is to be used later.
Management
In most cases, warehouses that belong to the organizations needs to be managed. In operation plan, this is one of the areas that must be looked into to ensure that the organizations’ property is safe and being used correctly.
Layout
The layout of the warehouse is where it will be located within the organization. This should also be planned for while the operation plans are being made.
Organization
Production and distribution.
Production is where the raw materials are being made to result the final product. Distribution on the other side is how these productions will reach market or the targeted customers. In operation plan, this are two services that should be given priority as they are the essentials of the company’s operation.
Flowcharts
This mostly describes how the organization will be operating and whether it has improvements or not.
Managing Risk
Risk matrix
This is a strategy used in assessing the risk level while bearing in mind both the level of consequence of the risk and its probability. This should be given priority as when while the operation plan is being done as there is risk in every business.
Mitigation Strategy
This are the steps that a business can take to minimize the level of risk it will face. This is essential in operation plan as it will enable smooth running of the business with less risks.
Finance
This is a monetary by which the organization uses to get the resources in which it operates. This is the core of every organization from the production to paying the employee. This should always be the first issue when it comes to planning the operation of an organization.
Market Forecast
This is mainly how an organization is planning to market their products. It is as well a basic issue when it comes to operation planning of the business.
Staffing Requirements
This is mainly the sourcing of particular employees that suit to work in a given organization. It is obvious that the company cannot operate with no workers, therefore, this should as well be considered while planning the business’ operation.
Suppliers
These are mainly persons or other organizations who take products from the manufacturers and distribute them market for the consumers. The products have to be produced and sold and this is only possible if the suppliers are as well catered for in the operation plan.
Recommendations
Below are some of the recommendations for the inventory control plan:
The use of inventory management tools. There are several tools available both the innovative ones and the cloud-based that can automate the process of inventory management and lessen the need or use of manual involvement. This tools also help in managing the inventory on various platforms like the mobile apps and online stores.
Adopting the use of data analytics. Data analytics is currently being used mostly by the inventory management. This helps the organizations to be able to go through the inventories of the other level of companies. These data analytics uses the real-time information in predicting the demand of the market. Through the use of data analytics, the managers can use unique perception to invest in the opportunities in the market and reallocate the inventory.
The use of inventory optimization software. According to (Pratap et al. , 2011), this software uses the historical information to come up with a demand probability. This helps the inventory managers to maintain the optimal inventory level.
Conclusion
Every organization wants to have control of their stocks or services offered to their customers. In the market, there are more factors to consider before applying the inventory controls. One of which is the demand of the stock an organization is operating on. Different stocks have different demand effects according to the existing market, therefore, an organization operation helps to enhance the inventory control must need to have a deep understanding of the investigated market area. Other than studying the market to get new updates of the changing demands to help the organizations know what level and strategies they should use to control the various inventories, the emerging technologies that would help in applying these inventories should as well be explored to allow the company to move with the technology. Inventory control encompasses maximizing and regulating the business’ inventory. The levels and strategies of the inventory can be affected by the demand change that is as a result of demand components. Planning of the demand reassures the business to take a view of the aspects that are “pulling” actual sales. The cost and inventory level quantity of this design is shared openly among the retailers and manufacturers if any information is needed as compared to when only the orders could be placed.
References
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Crum C., Palmatier G. (2003); Demand management best practices: process, principles, and collaboration, J. Ross Publishing
Koschat, A. M. (2008). Store Inventory Can Affect Demand: Empirical Evidence from Magazine Retailing. Journal of Retailing, 84(2), 165–179.
Matt Ball. Aberdeen Group, (2012). Inventory Control: How Best-in-Class Stack Up on Customer Service While Optimizing Their Inventory.
Papakiriakopoulos, D., Pramatari, K., Doukidis, G. (2009). A Decision of the Support System for Detecting Products Missing from the Shelf Based on Heuristic Rules. Decision Support Systems, 46(3), 685–694.
Pratap Mukharji, Sam Israelit, Francois Faelli, Thierry Catfolis and Raymond Tsang, (2011). Ten Ways to Improve Inventory Management. WSJ.com.
Relph G., Milner C (2015), “Inventory Management: Advanced Methods for Managing Inventory within Business Systems”
Silver, E.A., Pyke, D.F., Peterson, R. (2016), Inventory Management and Production Planning and Scheduling, 3rd ed., John Wiley & Sons, Inc., New York, NY.
Steiner, G. A. (2010). Strategic planning . Simon and Schuster.
Ton, Z., Raman, A. (2010). The Effect of the Product Variety and Inventory Levels on Retail Store Sales: A Longitudinal Study. Production and Operations Management, 19(5), 546–560.
Wild, T. (2002). Best Practice in Inventory Management. Hoboken: John Wiley & Sons
