Operations Plan
Key Aspects of Operations
The facility where all operations of Liquid Innovations will be performed is located in the Mauldin SC area. This building is also used as a company’s office. The rented facility is rather small, but it includes all the necessary equipment, and the company plans to purchase other facilities to organize required warehouses. The production process is based on the work of the part-time personnel, including three administrators and such professionals as a manager, a marketer, and an IT professional, and five technicians. The available purchased equipment includes two mixers ($30,000 each); two bottling machines ($10,000 each); three computers ($1,500 each); and a labeling machinery ($1,000). Costs include such inventory as glass bottles (25,000, $3,000), metal caps (25,000, $3,000), cardboard cartons (500, $500), and ingredients ($600/one month). The rented equipment includes two vehicles ($2,000/month) and two refrigerators ($2,000/month).
Cost and Time Efficiencies
Liquid Innovations follow the cost and time efficiency strategies while focusing on renting the most costly equipment, including vehicles. In addition, the costs are decreased because the company outsources labeling to the other existing company in Greenville County, and the ready products are stored in warehouses of that company. Costs associated with transportation and storage are lower than costs of purchasing new facilities, printers, and labeling machines.
Competitive Advantages
The competitive advantage of Liquid Innovations depends on the strategy that is used regarding the final operations stages and storage. As Liquid Innovations only is a startup company, it can reduce costs associated with shifting to the large-scale production while investing in purchasing more inventory and ingredients and marketing strategies to attract more customers (Wilson, Zeithaml, Bitner, & Gremler, 2012). Outsourcing and renting related to the equipment needed during the early period of the company’s competition within the market allows focusing on targeting products and maximizing production while reducing costs on the basic equipment (Jobber & Ellis-Chadwick, 2012, p. 54). Moreover, technicians are highly qualified to conduct the quality control and reach the aimed capacity in 50,000 bottles per month within the first three months. From this point, the competitive advantage depends on the strategies used to reduce operational costs in order to increase the company’s potential for branding and raising the level of quality because the produced beverage is of the premium class.
Problems Addressed and Overcome
Much attention should be paid to improving the inventory control and reducing costs associated with supplied inventory and ingredients and distribution approaches. Suppliers and retailers are local, and the turnaround time is minimal. However, to improve the quality of products and the inventory control, it is necessary to plan developing partnerships with more suppliers to receive the most quality products within the shortest period of time to increase the brand propositions.
Research and Development Activities
Three technicians form the research and development team in Liquid Innovations in order to expand the assortment of proposed flavors and contribute to the company while attracting more customers. The first launched product is GraviTea Honey-Lemon Ginger, and researchers work to launch GraviTea Honey-Ment with the associated advertising campaign during the next two months. This launch will guarantee attracting more customers and increases in their interest, as well as the statement of the brand within the local market.
Technology Plan
Software Needs
Liquid Innovations needs software for developing a logo and labels, creating a website, and for online marketing. As a result, the company needs to purchase the graphic software in order to develop the required logo for the brand recognition and to propose effective labels making the product recognizable. The additional software is needed for creating the company’s product for providing the information for customers and contacting retailers and suppliers. The effective online marketing also needs to be based on utilizing efficient programs and web technologies. The software is also necessary for receiving and working on orders and for organizing and managing the work of the personnel with the help of creating the database (“clouds”) and sharing the company’s inside information. The management of operations and control is realized with the appropriate management and operations software. The appropriate software is also purchased for organizing telecommuting for administrators in Liquid Innovations.
Hardware Needs
In spite of the fact that labeling as the element of the production process is outsourced at the current stage, the company plans to purchase printers in addition to labeling machines in the future. Currently, the needs of the company in data analysis and management are satisfied with the help of using only three computers. It is planned to lease more computers for marketing and customer service departments in the future as a result of the company’s development. Marketing and operations departments need more computers to decrease the proportion of telecommuting in the future.
Telecommunications Needs
The main focus is on the development of the website functioning in order to provide the target audience with the update information on new products and propositions to attract more customers. The connection with suppliers and retailers is also realized with the help of the website and e-mail communication. More attention should be paid to the development of advertising opportunities and the creation of communities with the help of social media. It is also planned to organize the call or support center for working with customers, suppliers, and retailers in the future. Telecommuting is a significant part of Liquid Innovations with the focus on decreasing operations costs (Hartley & Claycomb, 2013).
Personnel Needs
The current number of personnel working for the company is minimal, and this fact depends on the limited financial resources to pay for the work of the larger staff. As a result, the in-house operations including the managerial work and the actual production of beverages is provided by 12 employees. Labeling and the final operations are outsourced. Therefore, Liquid Innovations is required to address the needs of the in-house managers and technicians and the needs of outsourced professionals. The problem of limited financial resources was resolved with the focus on flexible scheduling and part-time work for administrators and technicians (Hollensen, 2015, p. 121).
Additionally, a manager, a marketer, and an IT professional are also expected to perform a range of tasks from home; therefore, much attention is paid to telecommuting. It is appropriate for the start-up company to reduce operational costs while focusing on opportunities for telecommuting and part-time work. Another group of employees are technicians who work while labeling and guaranteeing the storage of the produced beverages. These professionals are also hired as part-time workers (Abrams, 2014). This strategy is effective to decrease the costs of outsourcing because of the necessity to provide complete compensation packages for outsourced workers.
Management and Organization
Key Management and Employees
John Smith, President. Mr. Smith, a founder of Liquid Innovations, holds the Master’s Degree in Business Administration and the Bachelor’s Degree in Marketing. Mr. Smith performs the wide responsibilities of a coordinator and strategic leader in the company, as well as the financial director. The professional background includes the work for Pepsi as a marketer in the regional departments.
Jane Stone, Vice President, Marketing. Mrs. Stone has the wide working experience in the field of marketing. Mrs. Stone worked as a sales representative for Coca Cola and Pepsi, and she was a director of the sales department in the regional office of Pepsi in Arizona. Prior to working for Liquid Innovations, she was an assistant of marketing director in Arizona Beverages.
Board Members and Advisors
John Smith is the Chairman of the Board. The Board is only at the stage of its organization, and it includes only two advisors who are the direct investors of the company. These persons are John Richards and Tom Stanford. These persons are professionals in production of beverages as technical specialist, and their guidance is necessary for the technical staff of the company to develop the most efficient operations cycle with the focus on the available equipment and technologies.
Management Structure and Style
President John Smith as a founder of the company is responsible for the administration of operations and for decision-making in Liquid Innovations. President also performs the functions of Financial Director in the company and works to attract more investors. Mr. Smith coordinates the work of two vice presidents in the areas of marketing and operations, and Human Resource Director also reports to President. The marketing department is developing, and now it includes the marketer responsible for all marketing, advertising, and sales activities and a graphic designer sharing responsibilities for advertising and the work of the website. The Operations Department includes the technical staff and IT professionals providing the support for the work of remote employees. It is important to state that the focus is on the cooperation of President and vice presidents in order to achieve the highest results within the shortest period of time, as the company is a start-up, and it needs the coordinated efforts and effective collaboration of the staff (Lusch & Vargo, 2014). In this case, the main focus is on the leadership of President and vice presidents.
Figure 1 represents the management hierarchy in the company.
These particular management structure and style are chosen for the start-up company because of limited resources and many duties that need to be performed by high-class professionals. Thus, President as a founder and the main investor is responsible for all strategic and financial decisions in the company, influencing its growth directly. The division of responsibilities between two vice presidents is also a necessity because of needs to develop high-quality products responding to the premium standards, as it is declared according to the company’s mission and goals. As a result, the focus is on hiring the qualified marketing professional and skilled technicians responsible for the production of beverages. The small size of an organization allows the development of the democratic leadership and management style to contribute to the company’s profitability.
References
Abrams, R. (2014). Successful business plan: Secrets & strategies. Palo Alto, CA: Planning Shop.
Hartley, R. F., & Claycomb, C. (2013). Marketing mistakes and successes. New York, NY: Wiley.
Hollensen, S. (2015). Marketing management: A relationship approach. New York, NY: Pearson Education.
Jobber, D., & Ellis-Chadwick, F. (2012). Principles and practice of marketing. New York, NY: McGraw-Hill Higher Education.
Lusch, R. F., & Vargo, S. L. (2014). The service-dominant logic of marketing: Dialog, debate, and directions. New York, NY: Routledge.
Wilson, A., Zeithaml, V. A., Bitner, M. J., & Gremler, D. D. (2012). Services marketing: Integrating customer focus across the firm. New York, NY: McGraw-Hill Higher Education.