CHAPTER 9
Plan Section 4: Manufacturing or Methodology I
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I N V O L V E S A W I D E V A R I E T Y O F A C T I V I T I E S dedicated to the commercial production of the company’s physical goods in quantities and at rates consistent with market demand for the products. Although research and development can be quite expensive, manufacturing also represents a significant cost to the company, and every effort should be made to reduce manufacturing costs so that the company can obtain a pricing advantage over competitors. Some of the activities during the manufacturing and production stage include:
MANUFACTURING
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The construction of manufacturing facilities and related equipment The design and implementation of quality control procedures The development of a distribution system (i.e., shipment and warehousing processes) The creation of customer assistance schemes Contracting for procurement of parts, raw materials and other production items A service provider will be faced with many of the same issues as a manufacturer. The primary distinction will be the focus on the methodology of services instead of the manufacture of products. A service provider may need training facilities, educational procedures, continuing support for improvement of services and quality control, a distribution system, customer assistance program and a means for procuring the materials necessary to support the provision of the services. Often, a service provider also sells goods in connection with the services, in which case, manufacturing issues also will come into play.
Business Plan Disclosure Issues The business plan should describe how the company intends to manufacture its goods or establish its service methodology, and how it will distribute its products to customers or into appropriate distribution channels. The following issues should be addressed: ■
Will the company retain its manufacturing of goods or methodology of services internally or subcontract with others for all or part of the process? If the company will be subcontracting, does it plan to develop internal capacity in the future?
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