CHAPTER 4 OPERATIONS AND PRODUCTIONS PLAN Operation is the core of a company. This is where the “how” of the business lies. Everything else depends on the operation of the company. On the other hand, production is the act of manufacturing the product offered by the company. In the production, the quality and supply of the product must be maintained by the company. This chapter focuses on the operation and production plan of the business. It will discuss matters such as the raw materials used, machineries and equipment needed, and the way of turning inputs into outputs. I. BUSINESS PROCESS A. Plant Location Carbon Plus Corporation plant, together with the main office building will be located at Brgy.Bocohan, Domoit, Lucena City, Quezon. The total land area of the proposed location is 3,000 sq. meters. The location will suit the business’ operations for Quezon is one of the top coconut producing regions, thus making raw materials readily available. It will also help in cutting down the transportation cost in purchasing materials. It will also help the company in its business activities, transaction and communication. The location is along the roadside and the supplier’s and buyers will have no problem looking for the business plant.
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CHAPTER 4
OPERATIONS AND PRODUCTIONS PLAN
Operation is the core of a company. This is where the “how” of the business lies.
Everything else depends on the operation of the company. On the other hand, production is the
act of manufacturing the product offered by the company. In the production, the quality and
supply of the product must be maintained by the company.
This chapter focuses on the operation and production plan of the business. It will discuss
matters such as the raw materials used, machineries and equipment needed, and the way of
turning inputs into outputs.
I. BUSINESS PROCESS
A. Plant Location
Carbon Plus Corporation plant, together with the main office building will
be located at Brgy.Bocohan, Domoit, Lucena City, Quezon. The total land area of
the proposed location is 3,000 sq. meters. The location will suit the business’
operations for Quezon is one of the top coconut producing regions, thus making
raw materials readily available. It will also help in cutting down the transportation
cost in purchasing materials. It will also help the company in its business
activities, transaction and communication. The location is along the roadside and
the supplier’s and buyers will have no problem looking for the business plant.
B. Building Program
Carbon Plus Corporation plans to build a two-storey administrative
building with 150 sq. meters of floor area. Adjacent to it, the company will build a
three-storey factory building with 2500sq. meters that will cater to the production
and business processes. The building program will also include the necessary
areas that will cater to the needs of employees and suppliers.
1. Administrative office
This office will cater to the administrative personnel, executives, or
staffs who are responsible for management and administration of corporate
roles in the company. The human resource manager will also be in here.
Whenever there are inquiries from outside parties, this office will be in
charge.
2. Executive Office
This area will be the main office of the board of directors. Important
meetings will be held here. It is the private office of the company exclusive
for the Chief Executive Officer (CEO) and the other officers.
3. Finance Department
This is where cash receipts and disbursements take place. Other
financial information/problems are also discussed in this department such as
budgets and other concerns.
4. Accounting Department
Accounting and related matters are discussed and performed in this
department, from bookkeeping up to the preparation of annual financial
statements.
5. Marketing/Sales Department
Sales and marketing matters are discussed in this department.
Forecasting, budgeting, product improvements and monitoring of sales are the
common function in this department
6. Conference Room
All meetings will be discussed in this room. This is where
presentations, proposals and decision-making of the company will take place.
Special events such as seminars and trainings can also be accommodated by
this room.
7. Locker Room
This is the room designed for factory employees. In here, they can
change their clothes to what is required, take their breaks, attend to their
personal needs and hygiene, and store their things like bags, shirts and etc.
8. Comfort Room
Three comfort rooms will be built in the company. One will be for the
factory building and the two will be in the administrative building. Distinction
of the comfort room will be placed, one for male and the other for female.
9. Kitchen/Pantry
This area serves as food storage for employees as well as dining area
for employees and other guests or people transacting business with the
company.
10. Guard House
This is the place for company’s security guards. Is will be placed
outside the factory building and restrict unauthorized persons from entering
the company.
11. Parking Space
This area is for the company supplier/employees’ vehicles. It is
constructed for the convenience and safety of every vehicle. In here, there will
be a specified space for the company trucks and other vehicles.
12. Laboratory
This will be utilized by chemists and other experts in improving the
products. This is the area of mixing and will serve as the office of the
corporation’s chemist. This area will be restricted to other employees unless
they are requested therein.
13. Operations Office
This office involves the people who are responsible for the operations
of the company which includes the production and supervision of factory
employees. It provides areas to facilitate the normal operation process of the
business.
14. Raw Material Storage Room
This is the room used to store the raw materials and supplies used in
the production. Special equipments used in storing will be placed in here.
15. Cooking Area
This is the area designed to cook the coconut shells. Special
Equipments needed in cooking will be placed in here.
16. Oxidizing Area
This is the area designed to let the coconut shells be steamed. Special
equipment needed in the process are in here.
17. Cooling Area
This is the area designed to cool down the carbon.
18. Packaging Area
This is the area where the carbon is packed and sealed.
19. Finished Product Storage Room
This is the area where ready-to-deliver products are kept for a while
before they are sold.
II. TRANSACTION PROCESS
A. Board of Directors and Shareholders
1. Annual Election
The board of directors shall have an annual election and shall exercise
and follow all regulations and provision made by law. Those elected will do
the tasks which are laid up for them.
2. Quarterly and Urgent Meetings
They shall hold their meeting quarterly to discuss on matters regarding
the operations and management of the company. Any urgent meetings made
must be notified to all the board members. When the board will make a
decision, it must first be agreed by the quorum.
3. Dissemination of information
All information and decisions made shall be disseminated to all board
members and shareholders, if applicable. These information and decisions
made shall also be recorded in minutes of meetings and other documentary
form and copies shall be given to proper persons.
4. Stock Certificates
The shareholders will be given a certificate of stock and shall have the
right to vote on elections.
5. Shareholder Participation
The company exercise transparency to its shareholders. Thus, the
shareholders shall be notified about any changes, improvements, and situation
in which the company is experiencing. Also, the company shall be open to
hear the shareholders voices regarding matters about the company.
6. Dividends
The shareholders would be given dividends depending on the profit of
the business and this would be decided by the board of directors.
B. Suppliers
1. 1-year Contract
Carbon Plus Corporation would scout probable suppliers that would
give the company the satisfaction and quality operations. Once the company
had chosen the suppliers, they would bind in a contract for 1 year that would
entitle the supplier to supply the needs of Carbon Plus Corp. This would give
the company the assurance that the needs would be provided. The agreement
of the contract would include the amount of the products to be purchased that
would be based on an arm’s length transaction of both parties. It would also
include the time purchases would be made. Also, the term of the contract can
be renewed to another 1 year or more depending on the satisfaction of each
party on the said agreement.
2. FOB Destination
Carbon Plus Corporation would purchase the supplies and inventory
may it be direct or indirect materials every month and that the term of the
delivery would be FOB Destination.
C. Customer
1. Trade Discount
Carbon Plus Corp. may grant trade discounts to regular buyers of the
products. These discounts may come in any percentage depending on the
quantity purchased. Regular buyers are those that regularly buy products in
big quantities and have developed a buyer-seller relationship for not less than
six months. The management will be the one in charge in deciding discounts.
2. Cash discounts
Cash discounts are discounts given to customer who have outstanding
accounts receivable balances in order for them to pay their debt as early as
possible. The discounts will be decided by the management, which will be
based on the amount of debt.
3. Delivery Set
The corporation will be the one in charge of the delivery of products to
the consumer unless there is a separate agreement. The delivery will be made
during Mondays, Wednesdays and Fridays so as to maximize the delivery
capacity of the trucks and manage the distribution costs properly.
4. Terms of Payment:
a. Cash on Delivery
The corporation, during sales transactions will accept bills or cash
that is legal. They may come in any denomination as long as the amount
is fit to what is agreed.
b. Accounts Payable
The corporation may also sell products and receive the payment in
a future date. Only regular customers will be allowed to pay in this form.
Interest may also be charged as may deemed fit by the management.
c. Notes Payable
The corporation will accept any note regarding the payment of the
debt. Only regular customers will be allowed to pay in this form. The
management will still make a decision before they accept the note.
Interest payments are charged as may deemed fit by the management.
Collateral may also be a requirement depending on the amount of the sold
products.
5. Deals by Sales Agents
The corporation will hire various sales agents that will be sent on the
field every day. They will be the ones in charge of getting new customers and
make arrangements for the customers. Sales agent will be the one to contact
the main office regarding the contracts and arrangements made.