Operational Plan Of MedX Pharmacy

General Operating Hours

Discuss about the MGMT6003 Operational Plan of MedX pharmacy.

The objective of this paper is to discuss the operational plan of a pharmacy. The pharmacy, MedX would come under service and the paper discusses the operational plan and process map for MedX pharmacy. The operational plan is a great input for MedX to improve its supply chain and deliver greater value to stakeholders in the value chain. The organization does use Information Technology as a part of its operational plan and supply chain management. MedX Australia is a leading pharmacy in the country that provides number of drugs. The company has various centers across the country and operational excellence is one of the key objective of organization as operational excellence helps the company to save the commercial costs of its products and service delivery.

An operational plan explains how the organization or company achieve the strategic goals and objectives or business plan (Haksever & Render, 2018). It includes information about general operating procedure, working capital requirements and human resource of business (Brewster, 2017).

The following section determines the operational plan for online pharmacy Medx. It includes general operating process, human resources, working capital requirements, office space requirements, asset acquisition and operational workflow. The following section determines the operation plan of online medicine service by online pharmacy.

Operational Plan for Medx

The various sections of operational plan for MedX can be discusse as:

General Operating Hours

The online pharmacy will remain open from Monday to Sunday 24X7. However, delivery of medicines is made from 9:00 AM to 12:00 PM. The company will be operational.

The company is providing its services in two regions X and Y. Mr ABC will be sales executive of X region and Ms PQR will be sales executive of Y region. These two employees are qualified to handle sales call and can bring more customers on board. Ms STP will be the full time HR manager. She will handle team of two contractors. Mr KLM is the technical head of the company. His major responsibilities include managing the application, accept customer request, process it and send it to delivery team. Mr WXY is the head of delivery team. He has 5 sub-contractors who will deliver the products at desired location. Out of these 3 employees, two will handle delivery at location Y and three at location X. Mr PSL will be the finance head who will manage customer payment process and generate billing information and employees’ salary receipts. Mr ANC is the CEO of the company. He along with other heads will take strategic decisions of the company. All the employees are provided with insurance and employee benefit programs.

• Design-to-value: is an integrated approach that determines what customer wants, what competitors are offering and how much it cost to the company. The company Medx has designed it service in such a way that it provides maximum benefits than competitors.
• Portfolio Management: Medx initially is going to sell medicines through its portal. But it is planning to expand into diagnostic services and online doctor consultation as well.
• Quality: The Company follows all the government regulations and standards in delivering the product and services. The distributors are registered and are authenticated which indicates that they are reliable. All the employees were trained for their specific task in order to avoid any uncertainty.

The company will take medicine from stockist, prevalent in the region and it will pack the medicine in temper proof box and deliver the medicine to the consumer’s place after keeping good margin. For the first 3 months, to meet operational responsibility of business it is required to have sufficient working capital. It is estimated that it needs around $ 20,000 in WC to ensure that business meet all financial obligations. A long term strategy is to maintain positive cash flows.

Human Resource Management

Electricity and other supply: $500

Office Furniture: $1000

Specialised Software: $5000

Total capital cost: $6500

Medx will lease space for the fulfilling centres at location X and Y .It is desired that these two locations are in proximity to the stockist of medicines. This will reduce transportation cost and help in fulfilling orders efficiently. The necessary office equipment includes computers, fax machine, tamper proof packaging box and stationary. These facilities will be leased at 400$ per month. The associated cost includes

The P2P process is considered. It includes sub processes from sourcing, ordering, receipting and payment through relationship management. Through automation, these processes are interlinked directly. It helps in consolidating information, increased service and reduces costs.

The company aims to achieve service level of 95%.Service level is the expected probability of not hitting the stock out condition. The company is keeping minimal inventory, so it totally depends on the stockist for the availability of medicine. The stockists who are partnered with the company are largest stockist in the area. Also, maximum delivery time of medicine is 48 hours which ensures that the company have sufficient time to manage stock out condition.

Supply Chain Flows: There are majorly five flows in the supply chain: product, financial, value, information and risk flow (Jacobs & Lummus, 2014). There is downstream flow of goods and services. The company has developed its policies for reverse flow. The financial flow considers the optimization of total supply chain cost. Financial funds from the customer to the company should be managed appropriately. Medx has defined its policies for both account receivables and account payables. Informational flow is bi-directional which includes bills of materials, description, pricing, order and customer information, commercial goods, delivery status, title of goods and other parties etc. IT is incorporated in Medx to improve the efficiency of information flow. In Medx at every stage of supply chain, value is created for the end customers. From easy 3 steps online ordering to tamper proof packaging every process is designed keeping customer’ in mind. Proper training modules are designed to mitigate the risks.    

A process map is planning and management tool that describes the flow of work (Barbrow, S., & Hartline, 2015). It shows multiple events that are required to produce end result. It is also called process flowchart, functional process chart, process model, and workflow diagram and process flow diagram. The main purpose is to improve efficiency. It provides step by step insight into a process, improve communication, and provide process documentation. It helps new hires to understand the flow of company and organization (White & Cicmil, 2016). It is mandatory to update the flow with the necessary advancement with the approval of authorities. The clients keep special interest in process flow for the strategic and operational analysis. There is standardized way of making these process diagrams. The symbols are different for different processes. The arrow, circle, diamond, box, rectangle and oval symbols are used. The version number provides the sequences in which processes are carried out in system. There are multiple advantages of process flow diagram. The operational workflow of the business is quite simple. These are step by step outline how orders are completed in Medx

Working Capital Requirements

Step 1: The sales team will pitch the customers by asking them to order medicine from Medx portal and avail discounts.

Step 2: The customer will download the app on their mobile phones.

Step 3: The customer will place an order for medicine and attach the prescription.

Step 4: The order will be recorded by IT team and fed into database or system.

Step 5: The new customer order is updated in the database.

Step 6: The billing team generates the receipt. The medicines are delivered to the customer and payment is collected.

Step 7: The delivery team is updated with the order, pack the medicine and dispatch the order.

Medx will accept both online and offline payment. There is no cost to customer for using the Medx application.

• The company does not make medicine. It follows the buy option over make decision. However, in terms of logistics; it is not using 3^rd party logistics.
• For the first three months, the initial concept is tested on regions X and Y. Later on, the operations are expanded into other states. Medx has already done market research before entering into different regions. These first three months require regressive monitoring of the processes, taking customer feedback and provide discount to bring maximum number of customers on board.
• Based on the performance of first 3 months, if there are loop holes in the system then Business Process Reengineering will be done. It involves redesigning the core process from scratch (Kwon, Lee & Shin, 2014).
• The company will follow Just in Time process in order to reduce inventory and waste. It is necessary to maximize the output of low cost and service (Monczka & Patterson, 2015). The medicines are bought from stockist as soon as the order from customer is generated. This prevent the company in maintain stock of the medicines.
• There is increasing involvement of employees in planning processes. The opinion of staff can bring fresh ideas. They interact directly to customers, so it is necessary for company to understand company’s requirements.
• Scheduling of processes like delivery of medicine is done majorly during afternoon i.e. non-peak hours. It  helps in scheduling processes for the optimal result.
• A better model will be incorporated to forecast the demand of customers and tap potential customers. The mechanism of Total Quality control will be followed by packaging the medicine in tamper proof box (Stadtler, 2015). The customer can generate the order only if there is prescription attached with it.
• Collaboration strategy is followed whereby free flow of data and knowledge among the employees. This will help them to do a better job.
• It is necessary that finance is making payment to suppliers i.e. stockist on time i.e. on 30^th of every month and receive payments from customers within 48 hours of delivery. The business processes, finance and technology should be integrated.
• This online pharmacy industry works on push-pull strategy where sales team pushes the online app in the market and asked customers to download and use it. However, orders are entirely based on the pull strategy i.e. on the requirements of customers (Labro & Hemmer, 2017).

The strategic planning determines where the company wants to go and how it is going to get there. It is the long-term game plan of company. The operational planning is the next step after strategic plan has been formed in business planning process. The strategies which are identified in the strategic management become the starting point for operation management process (Lieberherr & Dominguez, 2016). For example, the objectives are used as performance indicator for operational management irrespective of any metrics followed for evaluation. One of the metrics used is balance scorecard. The operation management fully targets the conversion of input into output through process/processes which is fed with resources and controlled by the executives. Medx objective is to provide maximum value to customers. So, it has designed its processes considering all these aspects by providing home delivery and introducing diagnostic services. In short, strategic planning has limited importance if operational planning and implementation does not follow it. The company has strategic objective of maintaining good relations with customers, first tier suppliers and second tier suppliers. So, operation management team now consider relationship management not only with value chain providers but with value web. It is necessary that companies like Medx involve employees in multiple decisions making. This consultation will provide necessary details such as timelines of deliverables, realistic budgets and people responsible for the work items.   

References

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Brewster, C. (2017). The integration of human resource management and corporate strategy. In Policy and practice in European human resource management (pp. 22-35). Routledge.

Haksever, C., & Render, B. (2018). Service and Operations Management. World Scientific Books.

Heizer, J. (2016). Operations Management, 11/e. Pearson Education India.

Jacobs, F. R., Chase, R. B., & Lummus, R. R. (2014). Operations and supply chain management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.

Kwon, O., Lee, N., & Shin, B. (2014). Data quality management, data usage experience and acquisition intention of big data analytics. International Journal of Information Management, 34(3), 387-394.

Labro, E., & Hemmer, T. (2017). Management Accounting and Operations Management. In The Routledge Companion to Production and Operations Management (pp. 345-359). Routledge.

Lieberherr, E., Truffer, B., & Dominguez, D. (2016). The strategy/management perspective: water and wastewater. In the Routledge Companion to Network Industries (pp. 389-402). Routledge.

Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and supply chain management. Cengage Learning.

Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer, Berlin, Heidelberg.

White, G. R., & Cicmil, S. (2016). Knowledge acquisition through process mapping: Factors affecting the performance of work-based activity. International Journal of Productivity and Performance Management, 65(3), 302-323.