4 M’S OF OPERATIONS IN

RELATION TO THE BUSINESS

OPPORTUNITY AND DEVELOPING
A BUSINESS MODEL
INNOVATION AND CREATIVITY

 An entrepreneurial venture may either be a sole

proprietorship, a partnership, or a corporation, engaged
in merchandising, manufacturing, or service.
 Thus, the concept of innovation or creativity must, in
almost all instances, be introduced and practiced. An
entrepreneur finds way to introduce innovation from
the production process to the marketing stage, while an
ordinary businessperson simply imitates business
practices and procedures.
INNOVATION AND CREATIVITY

 The concept of innovation or creativity can easily

be practiced and highly noticeable in a
manufacturing operation since raw materials are
transformed to finished goods through the
production process. Innovation can be introduced
from the production phase up to packaging and
delivery.
INNOVATION AND CREATIVITY

 The three important elements in the production system are; the

input, the transformation of production process and the output.

INPUT PRODUCTION
OUTPUT
PROCESS
INPUT

 The Input includes the following:

1. Manpower
2. Materials
3. Machine
4. Design
5. Instructions
PRODUCTION PROCESS

 The Production process, also referred to as the

transformation or conversion process, is the stage
of production where the materials are
transformed into the final product with the aid of
manpower and machine.
 4 M’S OF PRODUCTION
 The most serious issues in the whole production system are the
inputs and the transformation process. Their quality determines the
quality of the output.
 The factors involved in the input and the production process are
usually referred to as the Four M’s of production, namely Manpower,
Method, Machine, and Materials.

4 M’s
Manpower
Method Output
Machine
Materials
MANPOWER

 Manpower talks about human labor force involved in the

manufacture of products. It is measured as the most serious
and main factor of production. The entrepreneur must
determine, attain and match the most competent and skilled
employees with the jobs at the most appropriate time
period.
 Educational qualifications and experience, status of
employment, number of workers required, skills and
expertise required for the job are some of the manpower
criteria that must be highly considered by the entrepreneur.
MATERIALS

 It simply refers to the raw materials necessary in the

production of a product. Materials mainly form part of
the finished product. Just in case the resources are
below standard, the finished product will unsatisfactory
as well. The entrepreneur may consider cost, quality,
availability, credibility of suppliers and waste that the
raw materials may produce.
MACHINE

 Machine is about manufacturing equipment used in the

production of goods or delivery of services. In the
process of selecting the type of equipment to purchase,
the entrepreneur may consider types of products to be
produced, production system to be adopted, cost of the
equipment, capacity of the equipment, availability of
spare parts in the local market, efficiency of the
equipment and the skills required in running the
equipment.
METHOD

 Method or production method is the process or way

of transforming raw materials to finished products.
The resources undergo some stages before it is
finalized and become set for delivery to the target
buyers. The selection of the method of production is
dependent on product to produce, mode of
production, manufacturing equipment to use and
required skills to do the work.
OUTPUT

 The output represents the final product from the

production process and distributed to the customers.
 The product is the physical output of the whole
production process. It should be valuable and beneficial
to the consumers and should satisfy their basic needs
and wants. A product can be heterogeneous or
homogeneous.
HETEROGENEOUS PRODUCT

 A heterogeneous product has dissimilar

characteristics, parts, and physical appearance. It
can be easily Improve Process Equipment
identified from other products. Entrepreneurial
ventures that produce heterogeneous products
include makers of furniture, bags, and home
decors.
HOMOGENOUS PRODUCT

 On the other hand, a homogeneous product has a

physical appearance, taste, or chemical content
that can hardly be distinguished from that of the
other products. Businesses that produce
homogeneous products include makers of soft
drinks, and medicines.
PRODUCT DESCRIPTION

 After knowing the production process and system, and

how the product is being processed, not it is important
to know about product description, wherein product
description promotes and explains what a product is and
why it’s worth buying. The purpose of a product
description is to provide customers with details around
the features and benefits of the product so they’re
obliged to buy.
TARGET MARKET

 Know who your target market is, focus on the product

benefits, tell the full story, use natural language and
tone, use power words that sell, and use good images.
These are guidelines for you to have a good product
description; since some customers are very particular
with it since they consider the welfare of their family, if
it is safe to use.
 PROTOTYPES

 Prototype is created before the massive production of such

product; an entrepreneur must consider prototyping. One of the
important early steps in the inventing process is making a
prototype.
 A prototype is a duplication of a product as it will be produced,
which may contain such details as color, graphics, packaging and
directions. Benefits are the reasons why customers will decide to
buy the products such as affordability, efficiency or ease of use.
The features of the product or service merely provide a
descriptive fact about the product or service.
 PRODUCT TESTING

 Most importantly, it is better to test your product prototype to meet

customers’ needs and expectations; and for your product to be known
and saleable. Pretesting of the product or service is similar to a sample
of the product or service given to the consumer free of cost in order
that he/she may try the product before committing to a purchase.
 The entrepreneur’s main concern is the satisfaction of a customer, for
they are the life blood of the business. Without them, all the efforts, will
be wasted as well as the chance to venture into a new business
SUPPLIER

 In a manufacturing venture, the supplier plays a vital

role. They are your business partners, without them
your business will not live. You need them as much as
you need your customers to be satisfied.
 But as an entrepreneur you have to choose a
potential supplier who has loyalty and values your
partnership: a supplier who would lead you to the
fulfillment of your business objectives, mission and
vision.
SUPPLIER

 This entity is part of a supply chain of a

business, which may offer the main part of
the value contained within its products.
 Certain suppliers may even involve in drop
shipping, where they ship goods directly to
the customers of the buyer.
VALUE CHAIN OR SUPPLY CHAIN?

 A supply chain is a structure of organizations,

people, activities, data, and resources involved in
moving a product or service from supplier to
customer.
 The main objective of supply chain management
includes management of a varied range of
components and procedures, for instance, storing of
raw materials, handling the inventory, warehousing,
and movement of finished product from the point of
processing to the point of consumption.
 VALUE CHAIN OR SUPPLY CHAIN?

How do supply chain management systems coordinate

planning, production, and logistics with suppliers?
 Supply chain management systems automate the flow
of information among members of the supply chain so
that they can use it to make better decisions about when
and how much to purchase, produce, or ship.
VALUE CHAIN OR SUPPLY CHAIN?

 Supply chain management decreases

purchasing cost. Retailors depend on supply
chains to quickly distribute costly products
to avoid sitting on expensive inventories.
Any delay in production can cost a company
tens of thousands of pesos. This factor
makes supply chain management ever more
important.
VALUE CHAIN OR SUPPLY CHAIN?

 Value chain is a method or activities by which a

company adds value to an item, with production,
marketing, and the provision of after-sales
service.
 The main goal and benefit of a value chain, and
therefore value chain analysis, is to make or
support a competitive benefit.
VALUE CHAIN OR SUPPLY CHAIN?

 When value chain management is implemented

effectively, the flow of products and materials is
improved through the accurate forecasting of
sales and demand as well as improved inventory
management.
 Delays are also minimized and products are
visible and traceable throughout the supply chain.
VALUE CHAIN OR SUPPLY CHAIN?

 Value chains help increase a business's

efficiency so the business can deliver the
most value for the least possible cost. The
end goal of a value chain is to create a
competitive advantage for a company by
increasing productivity while keeping costs
reasonable.
SEATWORK

1.Site situation wherein you will need:

a)Manpower
b)Machine
c)Materials
d)Method