Operational Management: Models, Key Elements, KPIs, Budgeting Process

Operational
Management

Table of Contents
INTRODUCTION...........................................................................................................................4
PART A KNOWLEDGE EVIDENCE ...........................................................................................4
Q1. Various models and methods used for organisational operational plans.........................4
Q2. Four key elements of an operational plan........................................................................5
Q3. Three alternative approaches to develop key performance indicators............................5
Q4. Role of operational plan in meeting organisational objectives. ......................................6
Q5. Explain the steps in budgeting process............................................................................6
PART B OPERATIONAL PLAN PROJECT.................................................................................7
TASK 1 Develop operational plan...................................................................................................7
1.1 Resource requirement analysis and Consultation.............................................................7
Announcements on resource allocation plan..........................................................................8
Feedback from stakeholders...................................................................................................9
Summary of the findings........................................................................................................9
1.2 Implement consultation process ......................................................................................9
1.3 Key performance indicator for organisational performance .........................................11
1.4 Develop and implement contingency for the operational plan.......................................13
1.5 Seeking specialist advice and getting approvals for resource requirement development and
proposal ...............................................................................................................................15
1.6 Operational plan to relevant work team .......................................................................16
TASK 2 Plan and manage resource acquisition ............................................................................20
2.1 Recruitment strategies that align with organisational HR policies and procedures.......20
2.2 Strategies to acquire physical resources and services in that aligns with organisational
policies..................................................................................................................................22
2.3 Recognise and incorporate requirements for intellectual property rights in recruitment and
acquisition of resources........................................................................................................22
TASK 3 Monitor & review operational performance ...................................................................23
3.1 Develop, monitor and review performance systems and processes to assess progress..23
3.2 Analyse and interpret budget and actual financial information to monitor and review profit
and productivity performance...............................................................................................24

3.3 Identify areas of under-performance, recommend solutions and take prompt action to
rectify the situation; Ensure mentoring and coaching are provided to support....................24
Performance Meeting Outcome and Training Needs Analysis (TNA) form.................................25
3.4 Negotiate recommendations for variations to operational plans and gain approval from
designated persons/groups....................................................................................................26
3.5 Develop and implement performance documenting and record keeping systems.........27
CONCLUSION..............................................................................................................................27
REFERENCES .............................................................................................................................28
Appendix........................................................................................................................................29
Role-Play Script....................................................................................................................29

INTRODUCTION
Operational management is area of management related to designing as well as
controlling procedure related to production and redesigning business operations within
production of goods and services (Verzuh, 2015). This function plays an important role in
organisation as they manage production and designing related activities in effective manner. This
will help organisation in achieving their goals within defined period of time. In simple term,
operational management is heart of an organisation because it control overall operational system.
This report is divided in two part in which part A will cover, models and methods utilise for
operational plans along with its key elements. In addition to this, alternative approaches for
developing key performance indicators will explain and role of operational plan in meeting
organisational objectives. In the end, steps of budgeting process will going to be elaborate.
Part B of this report is based on Woolworths which is part of retail industry founded in
1924 and they are serving in Australia, New Zealand. This section of report will going to develop
operational plan. Along with this, it will plan and manage resource acquisition along with
monitoring as well as reviewing operational performance.
PART A KNOWLEDGE EVIDENCE
Q1. Various models and methods used for organisational operational plans
Operational plans of an organisation defines the actions which is used for achievement of
strategic objectives, in a set-period of time (Slack and Brandon-Jones, 2018). It mainly includes
three type of plans that are –
Type of plan Created by Components Scope Level of detailed
actions
Strategic plan Upper
management
Concerning on
entire organisation
Main mission,
vision and
future goals
General but long-term
action planning
Tactical plan Middle level of
management
Particular division Certain actions
to achieve short-
term goals
Ideas and limited
actions
Operational Low-level of Department within Day-to-day Detailed actions at

plan management a specific division activities extreme level
To perform operational plan, models can be used which are based on short-term goals and long-
term goals. It includes improvement in workflow, reduce inventory level and production waste,
launching a new product at marketplace etc. Hereby, short-term goals can be achieved by
preparing operational plan on the basis of single-use model plan (Simpson and et. al., 2015). This
plan considers the current issue and make strategies accordingly to achieve same. While, long-
term based operational plans are framed via ongoing plan operational model.
Q2. Four key elements of an operational plan.
Operational plans of a company includes a number of elements like clear objectives,
actions to achieve a goal, quality standards, desired outcomes, process to monitor progress and
more (Schönsleben, 2016). But before making any strategy, it is essential to address four main
aspects as – where the business currently stands; which position it wants to come; process to get
the same; and how progress can be measured (Binder, 2016). So, concerning on these aspects,
the main components that operational plan must include are –
 Business goal – This section entails the main goal on which a company operates its
business.
 Objectives – It defines what a company wants to achieve in a defined period of time, that
sets entire actions and resources required for the same (Fleming and Koppelman, 2016).
 Strategy – This section of operational plan describes actions and tactics that will use for
attainment of objectives.
 Key actions - To utilise the plan in effective and efficient manner, this section defines
resources and deliverables.
Q3. Three alternative approaches to develop key performance indicators
Key Performance Indicators (KPIs) are mainly used for measuring the performance of an
organisation, that helps in developing better strategies to improve the same. For this purpose, a
number of approaches can be used (Harrison and Lock, 2017). It includes Gross and Net Profit
margins which is used for measuring the company's profitability; Employee turnover, Customer
satisfaction and more, for developing non-financial KPIs; and Sales and Production ratio, Web

analytics report to determine the success factors (Pheng and Meng, 2018). All these approaches
can be used for developing key performance indicators of a company.
Q4. Role of operational plan in meeting organisational objectives.
Operational plan is detail explanation of different team or department actions which they
have to carry out in day to day operations for accomplishing short term targets as well as
objectives of organisation (Nicholas and Steyn, 2017). Major role played by operational plan is
in their workforce management and it get update as per the requirement. Moreover, operational
plan play important role in accomplishing business objectives because it make sure that
benchmark is in place and result in meeting short term objectives. Most important is that in case
of any risk as well as for conforming daily basis output operational plan play essential role.
Along with this, it help in identifying the areas which aren't generating revenue or
causing loss and also assist in establishing things which have to be change (Heizer and et. al.,
2017). Along with this, operational plan bring accountability within day to day task such
practices result in completing these within required time duration and accomplishing
predetermined objectives (McArthur, 2015). Thus, through clear picture of task and
responsibilities provided by operational plan assist in accomplishing goals and objectives. In
easy manner day to day activities conducted because it was clearly defined in advance that what
individual have to do and how it should be conducted. So it become easy for everyone and help
them in accomplishing their goals which are related with entire company (Maylor, Turner and
Murray-Webster, 2015). Furthermore, operational plan is also related with implementation of
strategies as well as ideas.
Q5. Explain the steps in budgeting process
Budget is estimation of expenses as well as revenue over specific duration and it is
generally complied as well as re-evaluated on periodical basis. It can be formed for person,
family, group, government, business, country and many more who make or spend money
(Maylor and Turner, 2017). For an association budget is internal tool and not reported to external
parties. Budget process is mention below :-
 Update budget assumptions it could be related to sales trends, cost trends and
environmental conditions.
 Limited funds have negative impact on growth of project so, before making adequate
budget it is necessary to note funds availability.