Operations Realities

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From the course by University of Pennsylvania

Social Entrepreneurship

111 ratings

University of Pennsylvania

Social Entrepreneurship

111 ratings

Course 3 of 4 in the Specialization Business Strategies for A Better World

How do we create innovative and effective solutions to social problems around the world ? This course was designed for individuals and organizations who want to identify and bring about transformative societal change. Professors Jim Thompson and Ian “Mac” MacMillan help you develop both a strategy and a framework for your social enterprise based on their years of experience and expertise teaching social entrepreneurship and advising entrepreneurs. You’ll learn how to define a social problem, understand contextual realities, develop a solution, and plan for effective deployment. By the end of this course, you’ll have a deep understanding of the realities of launching an enterprise, be prepared for every step of the process, and put your social entrepreneurial venture on the path to success.

From the lesson

Module 3

In this module, you’ll examine the details and operational realities of your social enterprise. You’ll identify deliverables, needs of beneficiaries, and expected costs. You’ll explore key concepts such as Unit of Business, Social Impact and Financial Goals, and the Deliverables and Cost Table to assist in operationalizing the venture. By the end of this module, you’ll be able to better assess how success will be defined in your venture and the key deliverables and capabilities required to maintain your social enterprise.

Defining Performance Criteria11:15

Framing and Scoping the Venture17:50

Operations Realities8:53

Meet the Instructors

James D. Thompson
Director, Wharton Social Entrepreneurship Program
Entrepreneurship
Ian "Mac" MacMillan
Dhirubhai Ambani Professor of Innovation and Entrepreneurship
Management

Welcome back everybody.

This is a really important session because this is the linkage between the work

you've done with respect to the problem articulation, the solution design work.

And what's going to happen later when you think about,

does this makes sense from a social impact and also a financial cost perspective.

And what we're going to talk about in this session is the operations realities, or

the reality of operating, or

operationalizing this idea that you have to solve this problem for

the beneficiaries that you've chosen to focus on.

We're going to apply this to Zambia Feeds.

And we're going to use it as a framework with which to think through each of

the required deliverables that you will need to have in place for your venture.

Such that, it can be delivered at an appropriate time,

at an appropriate cost, at the appropriate place by the appropriate

people such that the venture can actually operate on the ground.

So the framework we've developed to help you do this

is called the Deliverables Table, and it's articulated in the book.

What it does is help you think through what the organization or

your social enterprise is actually going to have to do, step by step,

in order for it to be successful, and in order for

it to deliver the value to the beneficiaries that you've chosen.

The purpose of this is then to set up the capabilities that

you're going to need to require.

And later on, we can then think through the costs,

the assets, etc., that you will need to have this operational on the ground.

So let's think about Zambia Feeds, and

the solution they have which is to provide higher quality,

lower cost feed to farmers or poultry rearers, in this case,

chicken rearers in northwestern Zambia.

Before the business can even start,

they need to be farmers who are willing to rear chickens.

In other words, they need to be recruited.

So the first step that Zambia Feeds will need to make sure

they have in place is recruitment of farmers.

In other words, which farmers, are they in the appropriate segment?

How will they be reached?

In other words, consider what it's going to take to get them on board to say yes,

in terms of participation in the program.

Now, one can't assume that they know how to rear poultry.

So they're going to have to be trained.

How do you rear poultry, more specifically,

how do you rear healthy poultry?

What's involved?

And the three primary considerations here, the economics.

In other words, the beneficiary must know that it's an economically attractive

opportunity for

them, if your statement is that they will get income as well as nutrition.

They will need to know what health means for poultry.

In other words, how do you treat poultry in terms of temperature,

feed, water, the appropriate environment, etc., or the production system.

And how do you recognize diseases?

So, these things need to be planned for because they're going to take resources

that will take people, that will take time.

And without them, the beneficiary will fail, and if the beneficiary fails,

then they will not continue to participate in the program.

Once the farmers are in place, or the poultry rearers,

what Feeds needs to do now is make sure they can procure the bags for

the feed as well as all the raw materials that are going to be put in the feed.

For example, corn, soy, vitamins, minerals, etc.

Once the raw materials are purchased, they may need to be transported

to the factory or the production site, where Feeds will do the mixing.

Once there, it needs to be stored.

In other words, the bags need to be stored,

the raw materials need to be stored, then they need to be mixed.

So if you go back and think about storage, what does that mean for raw materials,

in this case, food stuffs and minerals?

How do you manage the safe storage free from pests,

free from parasites, free from moisture?

In other words, it has to stay dry until it's used.

Free perhaps from theft, and ready to use when the mixing process demands it.

If we think about mixing the feed, will it be done by hand,

will it be done using machinery?

In the Feeds case, it was done by hand to start, so

as to keep the cost of the venture as low as possible.

Until such time, if they were convinced that there were sufficient farmers who

would grow sufficient numbers of poultry to warrant the expenditure on equipment.

Once it's been mixed, it needs to bagged.

Once it's bagged it needs to be sewn closed.

Is this done automatically, is it done by hand?

Then it needs to be stored prior to shipment.

Once it's ready to ship, and by the way, Feeds needs to have arranged for

the delivery to wherever it's going.

It needs to be transported from the production site or

the mixing site to the distribution center.

How is that going to happen?

Will Feeds need their own transport?

Can they lease or rent vehicles to do it?

Will some of the farmers actually come and

collect it with the appropriate price incentives in place?

All of these things need to be thought through.

Once it's at the distribution center, Feeds also needs to make sure that

the distribution center is able to store under the right conditions, their feed.

In other words, is it safe from pests, is it dry, is it stored on pallets?

All of that needs to be planned beforehand.

And Feeds needs to be comfortable that the distribution center is able

to do what needs to be done until the customers are able to buy or

have delivered the feed to their sites, where they're going to raise the chickens.

If we think beyond that, and this case is a little bit different,

but Feeds requires their beneficiaries to be successful.

And small-scale poultry rears typically do not have the ability to arrange for

chicks.

So Feeds looking beyond even their own direct actions is going to need to make

sure that there is a supplier for chicks, day old chicks for Feeds on beneficiaries.

Because without them the beneficiaries can't buy the feed in order to rear

the poultry.

Feeds will also need to make sure

that the delivery of the chicks infrastructure is in place.

The chicks must get to the poultry rearers healthy and safe.

Furthermore, Feeds will have to arrange the vaccination,

the appropriate medical considerations need to be accounted for,

and practices put in place.

So, for example, Feeds will have to arrange for their farmers,

their beneficiaries, their customers, that the vaccinations are available

at the appropriate time in the growing cycle of the poultry.

If Feeds doesn't do this, they know before they even start that there is a high

likelihood their beneficiaries will fail.

And failure by the beneficiaries will result in failure of the Feeds company.

So this all needs to be thought through beforehand.

So if we think about the Deliverables Table, we can think of it as a framework

for operationalizing the solution that we have arrived at, or

comparing different solutions before we choose one.

And it's important because it allows us to begin to flesh out

all of the detail inside this business model or this venture model, if you will.

And it gives us a guide with which to think about what

capabilities will be required where, when, by whom, etc.

And this ultimately will set up the financial considerations of

this enterprise or

this venture versus any one of the others we might be considering at that time.

So with that, we'll close out this session, and

we'll come back with a follow on from this framework.

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