STEVE BRADLEY OWINO ACHOLA

CI/O5O36/14
MANAGEMENT PROCESSES ASSIGNMENT

BUSINESS MODELLING
This is the plan implemented by a company to generate revenue and make a profit from operations. The
model includes the components and functions of the business, as well as the revenues it generates and
the expenses it incurs.

In theory and practice, the term business model is used for a broad range of informal and formal
descriptions to represent core aspects of a business, including purpose, business process, target
customers, offerings, strategies, infrastructure, organizational structures, sourcing, trading practices,
and operational processes and policies including culture. The literature has provided very diverse
interpretations and definitions of a business model. A systematic review and analysis of manager
responses to a survey defines business models as the design of organizational structures to enact a
commercial opportunity. Further extensions to this design logic emphasize the use of narrative or
coherence in business model descriptions as mechanisms by which entrepreneurs create extraordinarily
successful growth firms.

OBJECTIVES OF CAPACITY PLANNING IN MANAGEMENT PROCESSES

Budgeting
Capacity planning outlines the personnel and equipment your small business will need in order to
maintain current operations and reach goals. That information becomes important when developing
annual budgets and the spending portions of business and marketing plans. When you can closely
estimate how much your expenses will be, it becomes easier to develop financial projections.

Scalability
Scalability is the process of planning for expansion. For example, when you buy computers for your small
business, you want to make sure the memory, processor and other important parts can be upgraded for
future use. It prevents you from having to buy new computers each time one of your major software
titles requires a hardware upgrade. This concept can apply to personnel planning, facilities planning and
manufacturing projections as well. For example, your capacity plans for the next three years indicate
that you will be expanding your staff by 20 percent. Your office facility needs to be able to accommodate
that change or else you need to find a new facility.

Growth
Planning for the growth of your small business requires several important considerations. You need to
determine if your company will need to add more physical locations, more personnel to run those
locations and how much capital you will need to raise for your expansion and growth. Capacity planning
becomes an integral part of business planning because it helps you determine how your company will
grow based on your projections. For example, if you anticipate a 20 percent increase in revenue each of
the next three years, then capacity planning can let you know what you will need in terms of personnel,
facilities, raw materials and product distribution to accommodate that growth.

Dynamic Change
The process of capacity planning collects a significant amount of data on how your company currently
operates. One of the ways in which you can stay competitive in the marketplace is to use that capacity
data to make changes to your organization to keep up with your competition. For example, if your prime
competitor expanded its customer service staff by 20 percent, then your capacity planning information
can let you know exactly what you would need it terms of money, facilities and personnel to keep up
with the competition's level of support.

Production Cycles
Your company can use capacity planning to maintain proper production levels during expected business
cycles. For example, if your company traditionally sees an increase in orders during the summer in
anticipation of the Christmas season, then you can use historical data to plan production capacity and
have ample staff on hand to handle the rise in demand. Your capacity planning also identifies when the
cycle starts to head downwards so that you can lay off seasonal workers and avoid the added personnel
expense.

The importance of scheduling in business processes

Financial
Project scheduling impacts the overall finances of a project. Time constraints require project managers
to schedule resources effectively. This is particularly true when resources must have highly specialized
skills and knowledge in order to complete a task or when costly materials are required. Completing a
project in a short time frame typically costs more because additional resources or expedited materials
are needed. With accurate project scheduling, realistic estimates and accurate projections prevent last-
minute orders that drive up costs.

Documentation
Creating a comprehensive work breakdown structure allows you to create a chart, such as a Gantt chart,
that lists the project tasks, shows dependencies and defines milestones. Management consultant Henry
Gantt designed this type of chart to show a graphic schedule of planned work. Its role in business
projects is to record and report progress toward project completion. Your project schedule also allows
you to assign human resources to the work and evaluate their allocation to ensure you have the
appropriate levels of utilization. You may also develop a program evaluation and review technique chart,
or PERT chart, to help you analyze project tasks.

Management
Effective project managers conduct regular meetings to get status reports. They use project scheduling
meetings to check in with their team members and prevent costly misunderstandings. These regular
meetings ensure that work flows from one process to the next and that each team member knows that
he needs to do to contribute the projects overall success.

Quality
Project scheduling ensures one task gets completed in a quality manner before the next task in the
process begins. By assuring that quality measures meet expectations at every step of the way, you
ensure that managers and team members address problems as they arise and don't wait until the end.
No major issues should appear upon completion because you’ve established quality controls from the
very beginning of the scheduling process. Effective project managers understand that ensuring quality
control involves managing risks and exploiting opportunities to speed up the schedule when possible to
beat the competition and achieve or maintain a competitive edge with a more reliable product.