Business operational environment

Business operational environment

Order Description

BSBMGT517: Assessment 1

Task
In response to a simulated business scenario, research resource requirements and develop (or amend) an operational plan in consultation with relevant stakeholders. As a part of the development of your plan, set performance indicators, plan for contingencies, and obtain approval in accordance with organisational requirements.
demonstrate the skills and knowledge required to develop operational plans in consultation with key stakeholders. complete the task in response to a simulated business scenario: BBQfun.
Research resource requirements and develop an operational plan in consultation with relevant stakeholders. Explain the consultation process and the communication activities you will undertake in discussing operational requirements with other senior managers who have a stake in your operations planning.
Analyse the case study in Appendix 1 and then provide a response to each of the nine (9) tasks. Ensure that you indicate the task number in each case followed by your response to that task (e.g. Task 1a).
Read the BBQfun scenario information provided in Appendix 1 and the additional resource materials (Resources 1 to 4).

.
Tasks
1. From the case study, write a brief summary of the BBQfun operational environment that includes the following:-
a. an outline the legislative and regulatory context that is relevant to BBQfun’s operational plan. Aspects which could be included (but are not necessarily limited to) are Privacy Legislation, Consumer Law, Work Health & Safety and Consumer Law.

b. an outline of the BBQfun policies and procedures that directly relate to the operational plan.

c. an explanation of the role of an operational plan in achieving the successful implementation of the e-commerce strategy.

d. an explanation and brief justification of your intention to either develop a new operational plan for BBQfun, or to amend the existing operational plan. You need to support your decision with reference to different methods and models for developing operational plans – such as methods for setting goals, outlining actions, identifying risk and monitoring performance.

2. Based on your summary at Task 1, research and identify resource requirements for the implementation of the e-commerce strategy. Provide a summary of your findings.

3. Outline the consultation and communication activities that you will undertake in planning to consult with relevant personnel in order to determine resourcing needs. The relevant personnel from the case study are:-
a. The Sales and Marketing Manager to discuss human resourcing requirements.

b. The Technology consultant to discuss physical resourcing requirements related to development of e-commerce website.

4. Using the template in Appendix 2, develop an action plan for the implementation of the e-commerce strategy. In your plan consider and include the following:-
a. physical resourcing (outline all major steps for resourcing, including procurement of different types of resources. Do not go into the detail of all the procurement steps for each resource type)

b. human resourcing (all major steps, e.g. recruiting, training, communication)

c. timelines and milestones for implementing the e-commerce strategy

d. consultation and communication processes (ensure all affected staff are informed and engagement is encouraged for all stakeholders).

Ensure plans adhere to organisational requirements set out in the scenario and in relevant policies and procedures.

5. a. Develop performance indicators for operational and financial targets and amend or develop existing operational plans to include KPIs and financial targets related to e-commerce strategy.

b. Using the template in Appendix 3, develop a balanced scorecard for an e-commerce customer service representative including three KPIs and associated targets.

Note: The current budget and operational plan for BBQfun is located in Appendix 1.

6. Using the contingency plan template in Appendix 4, identify at least three risks to the implementation of the operational plan and develop a contingency plan for each risk. Risks must include:
a. one risk due to employee underperformance

b. one risk related to management of intellectual property (IP)

c. one risk due to breach of health and safety compliance responsibilities.

7. Develop a proposal for resourcing to be presented for approval to the Operations General Manager. Include in your proposal:
a. a description of proposed implementation of resourcing

b. a breakdown of costs

c. benefits to organisation

d. a list of different approaches to developing key performance indicators

e. an outline of risks to the organisation of not implementing the proposal

f. an outline of the identified risks and contingency planning

g. conclusions and recommendations

8. Include a reference list outlining a description of the sources of information used to develop your proposal.

Appendix 1: Scenario – e-Commerce strategy
Background to scenario
The BBQfun Board of Directors and the CEO have decided to implement an e-commerce strategy to maintain or increase market share and revenue and satisfy customer needs in line with company strategic directions.
You have been hired as an external consultant to manage operational planning activities for BBQfun’s e-commerce strategy.
Under the strategy, BBQfun would offer all products in an online store. Stock could be stored at no extra cost at existing stores. Customers would cover delivery costs.
Currently, BBQfun has a website, but this website lacks e-commerce functionality. The website would need to be redeveloped to incorporate this functionality in line with relevant technical specifications. Existing infrastructure, such as office and store configurations, would need to be adapted to the new strategy. Additionally, assets, such as delivery vehicles would need to be acquired. New staff would need to be recruited and existing staff retrained or informed of the e-commerce strategy and associated operational and performance targets.
All resourcing must be acquired and operations undertaken in accordance with relevant internal and external standards – legislation and codes of practice; intellectual property (IP) rights and responsibilities; and organisational policies and procedures.
Preliminary approval has been given to amend existing budget and operational planning to incorporate this strategy.
It is now 30 June 2013 and e-commerce operations are expected to be underway in one year and three months, by 1 October 2014.
Scenario task
As the external consultant, you will need to determine physical and human resourcing requirements. Review organisational documentation and undertake preliminary research on e-commerce. Consult with the following personnel to determine resourcing needs:
? Sales and Marketing Manager
? technology consultant.
Plan physical and human resourcing and establish associated performance measures and targets. Consider the Management Team of BBQfun, including team leaders in warehouses, to be resources for the implementation. Use description of their roles in operational planning when assigning responsibilities.
Finally, propose resourcing and associated operational changes to the Operations General Manager, who will, in consultation with the CEO and Board of Directors, provide approval.
Resourcing and budget: e-Commerce strategy
After consulting with the management team at BBQfun, you determine:
? eight online sales and customer service people will be needed to manage increased online customers
? since stores are overstaffed, four of the required customer service staff could be sourced from existing employees at the two stores
? no current staff have any online customer service skills
? management would like to develop people through re-training rather than hire new staff to handle online sales
? six delivery trucks needed to enable distribution
? e-commerce website will take 50 days to develop
? three forklifts are needed
? four additional warehouse workers are needed
? six additional drivers are needed
? office space will need to be reconfigured.
The following operational costs are associated with e-commerce business strategy.
Costs: e-Commerce strategy (initial investment)
Resources Costs
Plant and equipment ? Delivery trucks $50,000 x 6 = $300,000
? Forklifts $10,000 x 3 = $30,000
Promotional costs $300,000
Website developers $100,000
Staff training Online customer service training $3,000 per staff member = $24,000
Recruitment costs $30,000
Management change leadership training for store managers and team leaders $3,000 each = 1 Brisbane store manager, 4 Brisbane team leaders, 1 Gold Coast store manager and 3 Gold Coast team leaders x $3,000 = $27,000
Warehouse and office reconfiguration $50,000
Total $861,000
In addition, ongoing staff costs will be incurred.
The expected life of the initial investment is expected to be three years.
Costs: e-Commerce strategy (ongoing)
Resources Costs
Additional staff: (At $40,000 year average annual salary)
• 4 online staff 4 x $40,000 ($160,000) per year for 3 years = $480,000
• 4 warehouse staff 4 x $40,000 ($160,000) per year for 3 years = $480,000
• 6 delivery drivers 6 x $40,000 = $240,000 per year for 3 years = $720,000
Total $1,680,000
The following expenses should be incurred in the 2014 financial year and be included in associated financial targets for spending:
Additional staff $400,000
Additional marketing $300,000
Additional training $51,000
Recruitment $30,000
Benefits to business
According to financial projection prepared by the CFO, the business expects the proposed strategy to be profitable over three years.
Profitability index over three years

Profitability index (PI) = Present value (PV) of future cash flows
Present value (PV) of initial investment
PI>1 indicates project should be undertaken
FY 2014 FY 2015 FY 2016
Cash flow from operations (minus ongoing operational costs associated with e-commerce such as additional staffing) $200,000 $500,000 $800,000
Present value of future cash flows (discounted future cash flows with respect to opportunity cost, inflation) $180,000 +$420,000+$600,000 = $1,200,000
Present value of initial investment $861,000
Profitability index 1.39

The expected additional profit for 2014 would be $200,000. This figure should be added to targets.
Risks to implementation
After consulting with stakeholders at BBQfun, you determine:
? medium risk of poor online sales
? high risk of customer service quality problems for online customers leading to a breach of consumer law
? high risk of staff misunderstanding changes and considering online sales as threat to jobs
? medium risk of not being able to recruit fully trained online staff
? low risk of loss of IP relating to confidential information contained within the e-commerce strategy when employees leave the organisation
? medium risk of loss of IP ownership if a relationship with the website developer contract ceases
? low level risk of not complying with WHS legislation through lack of risk assessment conducted on potential musculoskeletal disorders resulting from poor customer service workstation design
? medium risk of wastage due to overstocking product in anticipation of increased online sales.
All additional costs associated with contingency planning will be approved in accordance with BBQfun policies and procedures.
Budget summary
BBQfun 2013–2014 Approved budget by activities to be undertaken
Income:
Sales $11,000,000 Barbecues and related equipment.
Investment income $1,567,000 Real estate investment income and rental of office space.
Cost of goods sold (COGS) ($5,890,000) Cost of provision of goods, purchase of stock, distribution.
Gross profit $6,677,000 Gross profit.

Expenses:
Wages, salaries and on costs $2,567,890 Wages, salaries, superannuation, work cover insurance, payroll tax.
Consultancy fees $50,000 Project management: WHS management system; change management.
Communication expenses $42,000 Telephone, ISP costs, IT support.
Marketing $920,000 Cost of staff travel and associated costs for sales, etc.
Premises expenses $1,000,000 Rent, electricity, maintenance, cleaning.
Insurance $120,000 Liability insurance
Depreciation and amortisation $177,569 Computers and capital equipment that is depreciated.
Office supplies $65,068 Printing and stationery, postage, amenities.
Training $62,187 Sales training: leadership, WHS, ethical/legal training.
Total expenses $5,004,714
Net profit $1,672,286 Net income before tax.

Operations
General operating hours
BBQfun operates Monday to Friday from 9 am to 5 pm. BBQfun will be operational year round except legislated holidays.
Human resources
Pat Mifsud, CEO
Pat is responsible for working with the Board of Directors to oversee the business, set overall strategic directions, manage risk, and authorise large financial transactions.
Riz Mehra, Chief Financial Officer
Riz is responsible for preparing quarterly financial statements and overall budgeting. Riz is also responsible for overseeing budgets for cost centres and individual projects. At completion of financial quarters and at the end of projects, Riz is responsible for viewing budget variation reports and incorporating information into financial statements and financial projections.
Kim Chen, Operations General Manager
Kim is responsible for the day-to-day running of the company. Kim oversees the coordination of all operations. Kim is responsible for sponsoring projects that affect operations of the organisation as a whole. Kim works with the HR Manager to coordinate systems and projects to achieve company-wide synergy.
Les Goodale, Human Resources (HR) Manager
Les is responsible for the productive capacity and welfare of people at BBQfun. With the Operations General Manager, Les works to coordinate projects and management systems, such as performance management, recruitment and induction.
Sam Lee, Marketing Manager
Sam is responsible for the management of all aspects of marketing. Sam manages the activities of the marketing team.
Pat Sweeney, Manager: Brisbane (Kenmore)
Pat is responsible for the management of all aspects of the Brisbane store.
Alex Mitchell, Manager: Gold Coast
Alex is responsible for the management of all aspects of the Gold Coast store.
A summary of human resources at each of the two locations appears below:
Brisbane: Head office
? Employees:
? 30 full-time and casual sales and customer service people, check-out staff trained in use of POS – integrated with ERP (enterprise resource planning) and CRM (customer relationship management) software system
? senior management team (five) + one store manager
? four sales team leaders
? one delivery truck driver
? one warehouse worker.

Gold Coast operation
? Employees:
? 30 full-time and casual sales and customer service people, check-out staff trained in use of POS – integrated with ERP (enterprise resource planning) and CRM (customer relationship management) software system
? one store manager
? three sales team leaders
? one delivery truck driver
? one warehouse worker.
Office requirements
The office space is leased and will accommodate the necessary office equipment, such as computers, fax machine, photocopier and other engineering equipment.
Brisbane: Head office
? Location: Kenmore.
? Size: 15,000 square metres (50% warehouse, 50% display area). Warehouse area used at 45% of capacity, but poorly configured to accommodate heavy increase in distribution traffic.
? Large mezzanine office space (used to be occupied by online retailer, currently subdivided and occupied by the management team).
? Loading bay with large capacity (most of area incorporated into customer display area, could be easily and cheaply reconfigured to accommodate extra distribution).

Gold Coast operation
? Location: Robina.
? Size: 12,000 square metres (50% warehouse, 50% display area). Warehouse area used at 50% of capacity, but poorly configured to accommodate heavy increase in distribution traffic.
? Large mezzanine open-plan office space with separate access (was previously rented out to a telemarketing company).
? Lots of spare office space.
? Loading bay with large capacity.
Operating capital requirements
BBQfun requires approximately five million dollars in working capital to sustain and ensure the business meets all opening and ongoing financial obligations.
The company may experience financial pressures during slow sales periods.
A long-term strategy to maintain a positive cash flow during these periods will be to diversify the company’s product range and develop business opportunities such as e commerce to boost sales and sales capability overall.
Operational expenses
Wages, salaries and on-costs $2,567,890
Consultancy fees $50,000
Communication expenses $42,000
Marketing $920,000
Premises expenses $1,000,000
Insurance $120,000
Depreciation and amortisation $177,569
Office supplies $65,068
Training $62,187
Total Expenses $5,004,714
Insurance requirements
BBQfun will have to incur costs for business liability insurance. The estimated cost for this requirement is $100,000 per year.
Operational workflow
1. Conduct market research to determine needs.
2. Negotiate with suppliers.
3. Receive and warehouse products.
4. Provide service and information to warehouse customers.
5. Receive payment.
6. Arrange delivery of items (if required).
BBQfun accepts cash, EFTPOS and major credit cards. Credit terms are available for trades.

Operational plan (with strategic objectives, measures and tasks) FY 2013–2014
BBQfun Operational Plan (with strategic objectives, measures and tasks) FY 2013–2014
Objectives: Performance measures Tasks:
1 Engaging with customers through marketing, research and personalised service. ? Completion of market/marketing research.
? Completion of customer surveys.
? Completion of reports to identify marketing opportunities. ? Conduct quarterly surveys on customer satisfaction.
? Evaluation of market and marketing data to determine marketing opportunities.
2 Building reputation for quality products and quality customer service:
? Raise organisational profile by 20%.
? Improve client satisfaction performance by 25%. ? Percentage of brand recognition in sought-after categories in periodic customer surveys.
? Percentage of customers with positive view of organisational responsiveness, innovation, quality, ethics, safety.
? Number of customer complaints.
? Delivery times.
? Number of returned items. ? Audit of supplier quality.
? Regular contact with suppliers.
? Investigate resourcing needs: people, products.
? Fulfil resourcing and distribution needs in accordance with policies and procedures.
? Maintenance of enterprise resource management (ERP), point of sale (POS) and customer relationship management (CRM) systems.
3 Supporting people to perform via training and performance management. ? Numbers of injuries
(Target = 0).
? Numbers of absentees
(Target = <3% of total hours).
? Anti-discrimination complaints (Target=0).
? Lost Time Injury Frequency Rate (Target=2)
? Percentage completion of performance plans and performance management process.
? Numbers of coaching sessions completed.
? Numbers of operational-related training programs completed. ? Research effectiveness of possible incentives for: safe work achievement; healthy lifestyle.
? Engage workers with strategic goals of business and support professional development in line with strategic goals. (Targets to be set by individual managers).
? Management engagement with employees to achieve greater buy-in of organisational goals.
? Include explanation of how activities work with organisational strategic goals in all communications to internal personnel.
? Regular coaching.
? Training needs analysis and training (leadership, WHS, ethical/legal training).
? Strategic goals included in induction program.
? Employee incentives for performance in all areas relevant to operational and strategic goals.
4 Increasing sales revenue. General ledger accounts; financial statements:
? Revenue target = $11 million
? Profit target = $1,792,286 ? Marketing campaigns.
? Sales training for floor staff.
5 Reduce direct and indirect costs of operations. ? General ledger accounts; financial statements:
? wages
? cost of agent services
? consultancy fees
? wastage and associated expenses.
? Expense target = $5,004,714
? COGS target = $5,890,000 ? Renegotiate with suppliers.
? Research potential new suppliers.
? Research new distribution possibilities, such as e commerce/delivery.
? Management engagement with employees to achieve greater employee support of organisational goals.
? Greater use by managers of budgets to encourage restraint.
? Greater focus on budget restraint in management of projects/activities.
? Inventory management through ERM to reduce overstocking and risk associated with storage.
? Incentives (as part of manager/employee performance management and bonus system).

Appendix 1: Scenario – e-Commerce strategy
Background to scenario
The BBQfun Board of Directors and the CEO have decided to implement an e-commerce strategy to maintain or increase market share and revenue and satisfy customer needs in line with company strategic directions.
You have been hired as an external consultant to manage operational planning activities for BBQfun’s e-commerce strategy.
Under the strategy, BBQfun would offer all products in an online store. Stock could be stored at no extra cost at existing stores. Customers would cover delivery costs.
Currently, BBQfun has a website, but this website lacks e-commerce functionality. The website would need to be redeveloped to incorporate this functionality in line with relevant technical specifications. Existing infrastructure, such as office and store configurations, would need to be adapted to the new strategy. Additionally, assets, such as delivery vehicles would need to be acquired. New staff would need to be recruited and existing staff retrained or informed of the e-commerce strategy and associated operational and performance targets.
All resourcing must be acquired and operations undertaken in accordance with relevant internal and external standards – legislation and codes of practice; intellectual property (IP) rights and responsibilities; and organisational policies and procedures.
Preliminary approval has been given to amend existing budget and operational planning to incorporate this strategy.
It is now 30 June 2013 and e-commerce operations are expected to be underway in one year and three months, by 1 October 2014.
Scenario task
As the external consultant, you will need to determine physical and human resourcing requirements. Review organisational documentation and undertake preliminary research on e-commerce. Consult with the following personnel to determine resourcing needs:
? Sales and Marketing Manager
? technology consultant.
You will then need to plan physical and human resourcing and establish associated performance measures and targets. You may consider the Management Team of BBQfun, including team leaders in warehouses, to be resources for the implementation. Use description of their roles in operational planning when assigning responsibilities.
Finally, you will need to propose resourcing and associated operational changes to the Operations General Manager, who will, in consultation with the CEO and Board of Directors, provide approval.
Resourcing and budget: e-Commerce strategy
After consulting with the management team at BBQfun, you determine:
? eight online sales and customer service people will be needed to manage increased online customers
? since stores are overstaffed, four of the required customer service staff could be sourced from existing employees at the two stores
? no current staff have any online customer service skills
? management would like to develop people through re-training rather than hire new staff to handle online sales
? six delivery trucks needed to enable distribution
? e-commerce website will take 50 days to develop
? three forklifts are needed
? four additional warehouse workers are needed
? six additional drivers are needed
? office space will need to be reconfigured.
The following operational costs are associated with e-commerce business strategy.
Costs: e-Commerce strategy (initial investment)
Resources Costs
Plant and equipment ? Delivery trucks $50,000 x 6 = $300,000
? Forklifts $10,000 x 3 = $30,000
Promotional costs $300,000
Website developers $100,000
Staff training Online customer service training $3,000 per staff member = $24,000
Recruitment costs $30,000
Management change leadership training for store managers and team leaders $3,000 each = 1 Brisbane store manager, 4 Brisbane team leaders, 1 Gold Coast store manager and 3 Gold Coast team leaders x $3,000 = $27,000
Warehouse and office reconfiguration $50,000
Total $861,000
In addition, ongoing staff costs will be incurred.
The expected life of the initial investment is expected to be three years.
Costs: e-Commerce strategy (ongoing)
Resources Costs
Additional staff: (At $40,000 year average annual salary)
• 4 online staff 4 x $40,000 ($160,000) per year for 3 years = $480,000
• 4 warehouse staff 4 x $40,000 ($160,000) per year for 3 years = $480,000
• 6 delivery drivers 6 x $40,000 = $240,000 per year for 3 years = $720,000
Total $1,680,000
The following expenses should be incurred in the 2014 financial year and be included in associated financial targets for spending:
Additional staff $400,000
Additional marketing $300,000
Additional training $51,000
Recruitment $30,000
Benefits to business
According to financial projection prepared by the CFO, the business expects the proposed strategy to be profitable over three years.
Profitability index over three years

Profitability index (PI) = Present value (PV) of future cash flows
Present value (PV) of initial investment
PI>1 indicates project should be undertaken
FY 2014 FY 2015 FY 2016
Cash flow from operations (minus ongoing operational costs associated with e-commerce such as additional staffing) $200,000 $500,000 $800,000
Present value of future cash flows (discounted future cash flows with respect to opportunity cost, inflation) $180,000 +$420,000+$600,000 = $1,200,000
Present value of initial investment $861,000
Profitability index 1.39

The expected additional profit for 2014 would be $200,000. This figure should be added to targets.
Risks to implementation
After consulting with stakeholders at BBQfun, you determine:
? medium risk of poor online sales
? high risk of customer service quality problems for online customers leading to a breach of consumer law
? high risk of staff misunderstanding changes and considering online sales as threat to jobs
? medium risk of not being able to recruit fully trained online staff
? low risk of loss of IP relating to confidential information contained within the e-commerce strategy when employees leave the organisation
? medium risk of loss of IP ownership if a relationship with the website developer contract ceases
? low level risk of not complying with WHS legislation through lack of risk assessment conducted on potential musculoskeletal disorders resulting from poor customer service workstation design
? medium risk of wastage due to overstocking product in anticipation of increased online sales.
All additional costs associated with contingency planning will be approved in accordance with BBQfun policies and procedures.
Budget summary
BBQfun 2013–2014 Approved budget by activities to be undertaken
Income:
Sales $11,000,000 Barbecues and related equipment.
Investment income $1,567,000 Real estate investment income and rental of office space.
Cost of goods sold (COGS) ($5,890,000) Cost of provision of goods, purchase of stock, distribution.
Gross profit $6,677,000 Gross profit.

Expenses:
Wages, salaries and on costs $2,567,890 Wages, salaries, superannuation, work cover insurance, payroll tax.
Consultancy fees $50,000 Project management: WHS management system; change management.
Communication expenses $42,000 Telephone, ISP costs, IT support.
Marketing $920,000 Cost of staff travel and associated costs for sales, etc.
Premises expenses $1,000,000 Rent, electricity, maintenance, cleaning.
Insurance $120,000 Liability insurance
Depreciation and amortisation $177,569 Computers and capital equipment that is depreciated.
Office supplies $65,068 Printing and stationery, postage, amenities.
Training $62,187 Sales training: leadership, WHS, ethical/legal training.
Total expenses $5,004,714
Net profit $1,672,286 Net income before tax.

Operations
General operating hours
BBQfun operates Monday to Friday from 9 am to 5 pm. BBQfun will be operational year round except legislated holidays.
Human resources
Pat Mifsud, CEO
Pat is responsible for working with the Board of Directors to oversee the business, set overall strategic directions, manage risk, and authorise large financial transactions.
Riz Mehra, Chief Financial Officer
Riz is responsible for preparing quarterly financial statements and overall budgeting. Riz is also responsible for overseeing budgets for cost centres and individual projects. At completion of financial quarters and at the end of projects, Riz is responsible for viewing budget variation reports and incorporating information into financial statements and financial projections.
Kim Chen, Operations General Manager
Kim is responsible for the day-to-day running of the company. Kim oversees the coordination of all operations. Kim is responsible for sponsoring projects that affect operations of the organisation as a whole. Kim works with the HR Manager to coordinate systems and projects to achieve company-wide synergy.
Les Goodale, Human Resources (HR) Manager
Les is responsible for the productive capacity and welfare of people at BBQfun. With the Operations General Manager, Les works to coordinate projects and management systems, such as performance management, recruitment and induction.
Sam Lee, Marketing Manager
Sam is responsible for the management of all aspects of marketing. Sam manages the activities of the marketing team.
Pat Sweeney, Manager: Brisbane (Kenmore)
Pat is responsible for the management of all aspects of the Brisbane store.
Alex Mitchell, Manager: Gold Coast
Alex is responsible for the management of all aspects of the Gold Coast store.
A summary of human resources at each of the two locations appears below:
Brisbane: Head office
? Employees:
? 30 full-time and casual sales and customer service people, check-out staff trained in use of POS – integrated with ERP (enterprise resource planning) and CRM (customer relationship management) software system
? senior management team (five) + one store manager
? four sales team leaders
? one delivery truck driver
? one warehouse worker.

Gold Coast operation
? Employees:
? 30 full-time and casual sales and customer service people, check-out staff trained in use of POS – integrated with ERP (enterprise resource planning) and CRM (customer relationship management) software system
? one store manager
? three sales team leaders
? one delivery truck driver
? one warehouse worker.
Office requirements
The office space is leased and will accommodate the necessary office equipment, such as computers, fax machine, photocopier and other engineering equipment.
Brisbane: Head office
? Location: Kenmore.
? Size: 15,000 square metres (50% warehouse, 50% display area). Warehouse area used at 45% of capacity, but poorly configured to accommodate heavy increase in distribution traffic.
? Large mezzanine office space (used to be occupied by online retailer, currently subdivided and occupied by the management team).
? Loading bay with large capacity (most of area incorporated into customer display area, could be easily and cheaply reconfigured to accommodate extra distribution).

Gold Coast operation
? Location: Robina.
? Size: 12,000 square metres (50% warehouse, 50% display area). Warehouse area used at 50% of capacity, but poorly configured to accommodate heavy increase in distribution traffic.
? Large mezzanine open-plan office space with separate access (was previously rented out to a telemarketing company).
? Lots of spare office space.
? Loading bay with large capacity.
Operating capital requirements
BBQfun requires approximately five million dollars in working capital to sustain and ensure the business meets all opening and ongoing financial obligations.
The company may experience financial pressures during slow sales periods.
A long-term strategy to maintain a positive cash flow during these periods will be to diversify the company’s product range and develop business opportunities such as e commerce to boost sales and sales capability overall.
Operational expenses
Wages, salaries and on-costs $2,567,890
Consultancy fees $50,000
Communication expenses $42,000
Marketing $920,000
Premises expenses $1,000,000
Insurance $120,000
Depreciation and amortisation $177,569
Office supplies $65,068
Training $62,187
Total Expenses $5,004,714
Insurance requirements
BBQfun will have to incur costs for business liability insurance. The estimated cost for this requirement is $100,000 per year.
Operational workflow
7. Conduct market research to determine needs.
8. Negotiate with suppliers.
9. Receive and warehouse products.
10. Provide service and information to warehouse customers.
11. Receive payment.
12. Arrange delivery of items (if required).
BBQfun accepts cash, EFTPOS and major credit cards. Credit terms are available for trades.

Operational plan (with strategic objectives, measures and tasks) FY 2013–2014
BBQfun Operational Plan (with strategic objectives, measures and tasks) FY 2013–2014
Objectives: Performance measures Tasks:
1 Engaging with customers through marketing, research and personalised service. ? Completion of market/marketing research.
? Completion of customer surveys.
? Completion of reports to identify marketing opportunities. ? Conduct quarterly surveys on customer satisfaction.
? Evaluation of market and marketing data to determine marketing opportunities.
2 Building reputation for quality products and quality customer service:
? Raise organisational profile by 20%.
? Improve client satisfaction performance by 25%. ? Percentage of brand recognition in sought-after categories in periodic customer surveys.
? Percentage of customers with positive view of organisational responsiveness, innovation, quality, ethics, safety.
? Number of customer complaints.
? Delivery times.
? Number of returned items. ? Audit of supplier quality.
? Regular contact with suppliers.
? Investigate resourcing needs: people, products.
? Fulfil resourcing and distribution needs in accordance with policies and procedures.
? Maintenance of enterprise resource management (ERP), point of sale (POS) and customer relationship management (CRM) systems.
3 Supporting people to perform via training and performance management. ? Numbers of injuries
(Target = 0).
? Numbers of absentees
(Target = <3% of total hours).
? Anti-discrimination complaints (Target=0).
? Lost Time Injury Frequency Rate (Target=2)
? Percentage completion of performance plans and performance management process.
? Numbers of coaching sessions completed.
? Numbers of operational-related training programs completed. ? Research effectiveness of possible incentives for: safe work achievement; healthy lifestyle.
? Engage workers with strategic goals of business and support professional development in line with strategic goals. (Targets to be set by individual managers).
? Management engagement with employees to achieve greater buy-in of organisational goals.
? Include explanation of how activities work with organisational strategic goals in all communications to internal personnel.
? Regular coaching.
? Training needs analysis and training (leadership, WHS, ethical/legal training).
? Strategic goals included in induction program.
? Employee incentives for performance in all areas relevant to operational and strategic goals.
4 Increasing sales revenue. General ledger accounts; financial statements:
? Revenue target = $11 million
? Profit target = $1,792,286 ? Marketing campaigns.
? Sales training for floor staff.
5 Reduce direct and indirect costs of operations. ? General ledger accounts; financial statements:
? wages
? cost of agent services
? consultancy fees
? wastage and associated expenses.
? Expense target = $5,004,714
? COGS target = $5,890,000 ? Renegotiate with suppliers.
? Research potential new suppliers.
? Research new distribution possibilities, such as e commerce/delivery.
? Management engagement with employees to achieve greater employee support of organisational goals.
? Greater use by managers of budgets to encourage restraint.
? Greater focus on budget restraint in management of projects/activities.
? Inventory management through ERM to reduce overstocking and risk associated with storage.
? Incentives (as part of manager/employee performance management and bonus system).

Appendix 2: Action plan template
Milestone: Action and/or objective
(to achieve strategic aims of physical or human resourcing) Date Person responsible Budget or resources
(where applicable)
Appendix 3: Balanced scorecard template
KRA (key result area) Target KPI (key performance indicator) Result

Appendix 4: Contingency plan template
Contingency Plan
Company name: BBQfun
Name of person developing the plan:
Who was consulted as part of this plan?
Name Position

Risk identified:
Strategies/activities to minimise the risk By when By whom
Appendix 2: Action plan template
Milestone: Action and/or objective
(to achieve strategic aims of physical or human resourcing) Date Person responsible Budget or resources
(where applicable)
Appendix 3: Balanced scorecard template
KRA (key result area) Target KPI (key performance indicator) Result

Appendix 4: Contingency plan template
Contingency Plan
Company name: BBQfun
Name of person developing the plan:
Who was consulted as part of this plan?
Name Position

Risk identified:
Strategies/activities to minimise the risk By when By whom

Resource 1: Performance management policy and procedures – BBQfun
BBQfun Performance Management Policy
Purpose The purpose of this policy is to ensure performance management is carried out consistently, fairly and transparently and in accordance with organisational requirements.
Scope The scope of this policy covers the performance management process by employees and contractors of BBQfun.
Resources Specific procedures for the implementation of this policy are available below and on the company intranet.
Responsibility Managers will: ? carry out formal performance review discussions twice annually ? monitor individual performance throughout the year, recording key events, observations of importance which relate to the performance, both positive and negative ? use the performance management documentation to record formal and informal performance reviews ? provide employees with the opportunity to participate and contribute to their professional and personal development ? provide employees access to training and development, as reflected in the individual’s development plan ? provide underperforming employees with coaching and development throughout the review period, using the GROW model to help structure their planning for formal coaching sessions or informal, side-by-side sessions ? provide employees with opportunity to communicate their career development goals ? ensure employees complete their responsibilities in accordance with the Performance Management Policy and process.
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Relevant legislation, etc.
? Privacy Act 1988 (Cwlth) ? Queensland Anti-Discrimination Act 1991 (Qld) ? Fair Work Act 2009 (Cwlth) ? AS ISO 15489.1 – 2002 Records Management
Updated/authorised 10/2012 – Riz Mehra CFO
To conduct performance review The employee’s performance will be monitored and evaluated regularly throughout the year. The performance review encompasses three elements: ? an annual formal review discussion ? a six-month follow-up discussion ? continuous monitoring of the employee’s performance.
1. Annual discussion The annual discussion is a key step in the performance review process. Essentially, this step involves compiling all the information collected and assessed throughout the year relating to the employee’s performance. However, there should be no surprises in this discussion; it is merely a summary and review of the informal and formal reviews conducted throughout the year. The key elements of the annual discussion are to: ? reflect on performance during the year ? clarify key responsibilities of the role and review the job description ? discuss successes as well as areas for improvement ? set agreed targets and performance standards for the next six months ? agree on key areas of development for effective performance in the role.
2. Documentation The performance review documentation provides an important guide to record standards set, targets and development plans. It is important to use the correct forms to maintain the integrity of the information, and to help the manager and employee ensure the review is completed correctly.
3. Timing Employee performance is to be formally reviewed every 12 months with a follow-up review in six months. A new plan should be completed at each annual appraisal discussion

Resource 2: Targets and KPIs
Target KPI
To increase sales by 10% by 1 October 201X.
? Sales revenue figures as at specified date. For example: Sales reporting completed on 1 October 201X demonstrates sales revenue has increased by 25% from $100,000 to $125,000.
To reduce staff turnover by 15% by 1 July 201X
? Staff turnover figures as at specified date. For example: Staff turnover on 1 July 201X is reported at 31% which indicates an increase in turnover of 5%.
To train all safety committee team members in WHS1 consultation using approved WorkCover accredited training program by 1 November 201X
? WorkCover accredited certificates for WHS consultation training cited for all committee members. For example: WorkCover accredited WHS consultation certificates have been cited for all safety committee members. Copies have been recorded on file.
To sign five new clients to two year contracts by 20 December 201X.
? An increase of at least five new clients signed to two-year contracts. For example: A review of current two-year contracts completed on 20 December 201X reveals that five new client contracts have been signed in the last 12 months.
To implement new computer system into 90% of business units by 1 March 201X.
? Number of business units who have new computer installed. ? Number of business units using new computer system. ? Number of outages as a result of new system. ? Number of issues logged by IT service desk due to new system. ? Training completed for all employees using the new system. For example: A survey completed on 1 March 201X by all business unit managers advises that the new system has been implemented in 100% business units and it has failed to work as per specification in 15% of business units. This failure has resulted in the system being unavailable for use (outages) for 10% or more of the working day for the last month.

1 Work health and safety. Sometimes referred to as occupational health and safety (OHS).

Resource 3: BBQfun recruitment action plan
Objective: Fulfil customer service requirements Resources: Store Manager, other relevant managers, interview rooms Budget: $20,000
Action Responsible Due date
1. Investigate resourcing needs and seek pre-approval: ? consult with managers/technical experts.
SM 22/12/201X
2. Develop draft role description/s: ? consult with relevant managers. Dependent on Action (1).
SM 05/01/201X
3. Check role description against requirements and seek feedback: ? consult with relevant managers. Dependent on Action (2).
SM 12/01/201X
4. Investigate print and other media options: ? check list of preferred suppliers ? research options. Dependant on Action (1).
SM 12/01/201X
5. Prepare advertisement and gain final approval from relevant stakeholders: ? consult with managers ? prepare proofs ? copy edit. Dependent on Actions (3) and (4).
SM 26/01/201X
6. Gain final approval from relevant stakeholders Dependent on Action (5).
SM 31/01/201X
7. Prepare for interviews: ? prepare questions in consultation with relevant managers ? determine interview panel. Dependent on Action (6).
SM 02/02/201X
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8. Advertise: ? pay advertiser ? monitor response. Dependant on Action (6).
SM 02/02/201X
9. Interview and assess candidates: ? contact candidates ? arrange interviews ? hold interviews ? consult with panel to determine successful candidates ? inform successful candidates. Dependent on Action (7) and (8).
SM 23/02/201X
10. End recruitment process. SM

Resource 4: BBQfun contingency plan
Contingency Plan: 20/10/201X
Company name: BBQfun Name of person developing the plan: Pat Sweeney, Store Manager (Kenmore) Who was consulted as part of this plan? Name Position Kim Chen Operations General Manager Pat Sweeney Store Manager (Kenmore) Les Goodale Human Resources (HR) Manager
Risk identified: Possible strike in January 201X
Strategies/activities to minimise the risk By when By whom
Review pay scale and ensure pay scale is competitive: ? consult with senior managers to consider raising pay rates or initiating an incentives scheme ? determine an attractive package for employees to consider.
1/12/201X LG
Review WHS procedures, incident reports and training practices.
1/12/201X PS, KC
Review consultative practices including performance management process.
1/12/201X PS, KC
Hold meetings, interviews, with all affected employees to: ? inform employees of review ? inform employees of operational strategies and objectives ? discuss remuneration and incentives agreed by senior management , training, consultation processes and other topics of concern ? invite feedback and outline ways to provide feedback.
15/12/201X PS, KC
Strategies/activities to minimise the risk By when By whom
Develop contingency plan should strike proceed: ? develop a PR strategy
15/12/201X Senior management
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? investigate legal options ? develop negotiation strategy: ? investigate possible union tactics and develop responses ? investigate alternative human resourcing ? develop catch-up production plans ? develop alternative budget for: ? decreased revenue ? increased future production costs involving overtime, etc. ? legal, PR consultation expenses.
CFO Board CEO
Amend performance management process as per review and feedback: ? ensure alignment with operational/strategic objectives ? ensure training as required ? produce or amend policies and procedures as required.
20/12/201X PS, KC
Follow up with employees: ? meet to discuss issues, developments and feedback ? invite further feedback.
30/1/201X PS