ENTREPRENEURSH

IP
Quarter 2

4Ms of
The 4Ms of Operations (Batisan, 2016)
The operations plan is an important part of the
business plan because it simply states the details in
operating the business. Operations management, on
the other hand, controls the implementation of the
business plan. A strong operations plan should have the
four operational aspects _ called the 4Ms of operations:
the methods, or the processes to be followed in
effectively manufacturing or delivering a product or
service; the manpower, or the right human resources
who will handle certain business operations; the
machines, or the technology used in efficiently operating
the business, and the materials to be used in creating a
product or performing a service, which includes supply
Methods
The methods aspect represents the day-to-day
operations of a business. It describes how an
entrepreneur will run the business from all facets of the
business such as the manufacturing of goods, service
delivery process, distribution of goods and services,
logistics for delivery of goods, and inventory
management, to name a few. The entrepreneur has to
be very detailed in formulating these processes and
must ensure that the customer experience has to be
very detailed in formulating these processes and must
ensure that the customer experience will be pleasant
and seamless. Internally, the processes must also abide
with industry standards and policies where the
The entrepreneur must also set standard operating procedures
(SOPs) both in manufacturing goods and rendering of services.
These SOPs must be monitored to validate compliance. The
entrepreneur must also critically consider the effects of these
processes to the environment and to the public.
I.Manufacturing of Goods (Schaper and Volery, 2004)
The entrepreneur who will engage in producing his or her own
products will have to consider the basic guidelines and principles in
manufacturing.
Manufacturing is the process of translating raw materials into
finished goods that are acceptable to the customer’s
standards. It consists of three elements:
∙Input – the materials or ingredients, skills, technology and
investment to be used in creating the product
∙Process – the transformation phase where inputs are
processed by manpower and machines to come up with the
final product
∙Output – the final product of the process stage, which is
intended to be sold to target customers
OPERATIONS MANAGEMENT IN MANUFACTURING
The entrepreneur must also consider the efficient
manufacturing site in which the manufacturing process will
take place. Depending on the entrepreneur’s objective and
capacity, he or she can opt to have any of the following
manufacturing sites:
Home-based – Most startups do not have financial capacity to
establish a manufacturing site. Thus, their only option is to
manufacture goods at home. This option is the cheapest and
highly flexible.
∙Commercial space for rent – this is advisable if the business
really requires a commercial space for processing of goods
and if the home option is not viable anymore. A commercial
space gives the entrepreneur a more specialized and suited
manufacturing site than manufacturing at home.
∙Commercial space purchase – this option requires the biggest
amount of capital expenditure, but it also provides the
entrepreneur substantial freedom and flexibility to design and
run the commercial space.
 Once the entrepreneur has chosen a manufacturing site, he or
she should consider location, where the delivery of raw
materials and finished goods will be conducted. The
transportation routes from or to the manufacturing site should
be efficient, so that the delivery of raw materials and finished
goods will be seamless. The location should also be accessible
to major types of transport vehicles. Last, the location must
operate in an environmental-friendly manner so as not
contribute to various types of pollution in the environment.
The internal layout or the floor plan of the manufacturing
site must also be critically done by the entrepreneur because it
affects the efficiency of the business operation. Each space
should be maximized to save on manufacturing costs
(specifically overhead costs). An efficient floor plan illustrates
how raw materials and finished goods can efficiently be
transferred, processed, and released from one processing unit
floor plan: (1) the product- based layout where the facilities,
are prearranged according to the flow_ of the manufacturing
operations, and (2) the process-based layout, where the
facilities are prearranged. The entrepreneur must prepare a
manufacturing process flow, which serves as a step-by-step
guide of the employees and the manufacturing equipment.

BAKERY KITCHEN LAY-

II. Service Delivery Process
The entrepreneur who will engage in a service business
must be more meticulous when it comes to the service
delivery process. This is because services are intangible,
and the only way the customer can appreciate the service
is by remembering how pleasant his or her experience
was. Moreover, a seamless service saves the
entrepreneur a huge chunk in operational costs.
Service entrepreneurs must prepare a detailed
flowchart of the service business, which is also called a
service blueprint. Every process in the blueprint must be
relevant to the service business to minimize wastage. The
service bottlenecks must be addressed immediately to
avoid customer complaints.
Bottleneck is a part of the process where there is an
apparent inefficiency and where the customer waits
longer. The service entrepreneur must develop scripts
that the service provider will follow to serve the
customers better and to establish standard processes. In
terms of the floor plan, the service entrepreneur must
design it according to the most efficient way in
performing the service, which can be based on the
internal structure of the service business, service
delivery requirements, or customer requirements. For
example, a barber shop should place the receptionist in
front so that customers can easily inquire of the service
that they will avail.
 III. Distribution Method

One of the basic processes to be considered thoroughly is the

distribution process. Distribution is the process of bringing the products
or services to customers. In selling physical goods, the entrepreneur
location, the processes, and the distribution of the products
to the customers. The entrepreneur may also buy the
finished goods from the manufacturers and plan how to
distribute them efficiently to target distribution centers or
the customers. Distribution is not a straight process from
the entrepreneur to customers; thus, the term supply chain or
distribution channel was coined. The manufacturer will deliver
the products to the distributors, to the wholesalers, to the
retailers, and then finally to customers. Each member in the
supply chain will have a fair share in the profits, which may
be squeezed if the supply chain grows longer. This is why
there is a tendency to impose higher markups on the
product price. It is now up to the entrepreneur on what
distribution channel strategies he or she will employ
depending on the product or service he or she will offer.
IV. Payment Process
The entrepreneur must also establish a seamless payment
process. Generally, there are no problems if the customers pay
in cash. But there are instances when they do not want to pay
in cash and are usually attracted by flexible and customer-
friendly payment terms such as credit cards, installment plans,
pautang. The entrepreneur must ensure that credit payments
are seamless and that the customers are aware of the terms
and conditions of the credit. Some entrepreneurs put point-of-
sale (POS) machines in their shops to accommodate those who
will pay through their credit or debit cards. For traditional
ones, they put the credit purchase in a ledger and indicate the
due dates. Once the due date arrives, the entrepreneur has to
collect payments from the customers. The objective for all
entrepreneurs is to ensure efficient collection of accounts
receivables and avoid bad debts. He or she must conduct due
diligence first before allowing a customer to purchase via
credit.
TYPE OF PAYMENT
Manpower
Manpower is one of the highest costs of operating a business
but is also the most instrumental to its success. Having the
right people encompasses a myriad of advantages.
I. Job Description
Job description enumerates the duties and responsibilities of
the potential employee, including the scope, limitations, and
terms and conditions of employment. The heading of a job
description is the job title, which is the summary of what the
employee will do. The entrepreneur should devise a
respectable and decent job title because the title boosts the
self-confidence of the employee.
II.Employee Qualification

In hiring suitable employees for the job needed,

entrepreneurs will have to lookfor the following criteria:
1.Educational background — This gives the entrepreneur an
idea on the degree of the candidate's knowledge of basic
things. However, it is not the sole factor in selecting a
candidate.
2.Work experience — This will tell him or her what to expect
from the applicant and what he or she can potentially
contribute to the business based on his or her past positions
and experiences. This will also establish the training needs
of the candidate.
3.Specific skill or knowledge - This one is important especially on
technical jobs that require high proficiency. It will be easy
4. Work attitude - These deals with the worker's integrity and
how he or she deals with his or her coworkers, bosses, and
customers. Entrepreneurs also need people with
relationship skills because communication is important in
applying their expertise.

III. Selection of Job Applicants

Here are some common questions being asked in an
interview. However, it will be up to the entrepreneur or the
HR personnel to ask relevant questions to the interviewee.

1.What are your strengths that you can contribute to our

organization?

2.What are your weaknesses that can prevent you from

3. What exactly did you do in your previous job(s)? How will
these past experiences contribute to our
organization?

4. What were your significant milestones in your previous

job(s), and why do you consider them as such?

5. Can you discuss the things you know about our

organization? Why are you interested to join our
organization?

6. What are your career plans for the next five years if given
the chance to work with our organization?

7. Can you describe your work ethic? How do you work with
a team and withyour superior?
IV. Job Offer
Once the entrepreneur or the hiring manager has been
convinced already of the credentials and the interview
answers of the candidate, the job contract is now
prepared. A job contract generally summarizes the terms
and conditions of the candidate's employment with the
business. It usually includes the following details:
(1) rank or position of the candidate, (2) a list of
responsibilities or deliverables and its scope and
limitations, (3) the salary and benefits including vacation
and sick leaves, and qualifications to become (4) work
schedule, (5) probationary period if any a regular
employee, (6) the duration of the contract, and (7)
resignation procedure (e.g., 30-day notice or leave
 V. Employee Development
Training people is one of the biggest investments of an
entrepreneur or a businessman. Therefore, he or she
must devise strategies on how to keep employees
satisfied working in the company. Training starts with
employee orientation.
 Employee orientation is usually a one--to two-day session
that summarizes the history of the business, its vision and
mission, policies and procedures, culture, and norms of
the business This also includes introduction to the co-
employees and superiors, the tour of the work place, and
the discussion of daily responsibilities and accountabilities
including key performance indicators (KPI) and key result
areas (KRA) of the employee. KPIs and KRAs are the
bases of the entrepreneur for rating the. performance of
the employee—if the employee is exceeding meeting
expectations, or seldom meeting expectations.
Machines
Machines are not only limited to physical equipment but can
also pertain to new technologies that help business operations
become standardized and seamless. Without machines,
business operations will be cumbersome, costly, and with low
quality.
I.Equipment and Other Facilities
Depending on the product that the entrepreneur produces or
the service that he or she offers, the facilities must be
strategically placed in the manufacturing site or in the service
delivery area. The entrepreneur must prepare a facility plan
that details the most economical way to manufacture the
product or offer the service by placing the facilities where they
can be efficiently used.
 The sizes and shapes of the facilities and equipment affect the
entire operations process, so the site must adapt to how big or small
the pieces of equipment are. The site must also be conducive, well-
ventilated, and well-lit, so that the employees can manage the
machines efficiently. There should be fire exits and safety reminders
on how to use the facilities to ensure safety of the employees. The
equipment to be used should all be compliant with safety ensure
safety requirementsto prevent accidents.

FACILITY PLANNING KITCHEN LAY-

II. Telecommunications and Information Technology
Regardless of any business the entrepreneur will venture
into, telecommunications and information
technology equipment is mandatory. These pieces of
equipment include mobile phones or smartphones, tablet
computers, phablets (phone and tablet in one), landline
phones, laptops or desktop computers, POS machines,
software programs, and business Web sites. These tools
aid the entrepreneur in making business processes fast
and convenient. Here are the advantages of having
telecommunications and information technology
equipment ina business:

•Landline phones — order-taking, telemarketing, and

•Mobile phones (smartphones, tablet computers, phablets)
— mobile application for order-taking, mobile application
for payments, mobile marketing, social media marketing,
teleconferencing with business partners and customers,
marketing research, mobile banking, and Internet
promotions.
•Laptop and desktop computers — order-taking, Internet
marketing, making conference calls with business
partners and customers, marketing research, online
banking, preparing reports such as financial statements,
business case, inventory reports, and legal and
compliance reports.
• POS machines — charging customers' debit or credit
card, tracking analyzing purchases sales, storing data,
• Accounting and inventory software — accounting all
business transactions and profitability, monitoring
sales and inventory

• Web site — order-taking, 24/7 marketing, having

online conversations with customers, tracking
customer activities online, collecting customer
information.

The responsibility of the entrepreneur is to protect

these pieces of equipment physically and against
fraudsters who will be using this information to align or
steal from the business. These machines carry
confidential information. Therefore, they should be
protected with strong passwords and used only by
every piece of important information confidential,
including passwords. Software programs must always
be updated and checked against viruses and hackers.
POS machines must always be in working condition and
must be referred to the banks when not properly
working. Equipment should be covered in the event of
loss of property due to accidental events and accidents,
machine breakdown, manual faults, or interruption of
business.

Materials

Whether the entrepreneur will offer products or cater

services, he or she has to pinpoint a number of
dependable suppliers of quality raw materials and
must have a consistent and sufficient number of raw
materials and supplies that can accommodate the
demand of the entrepreneur. In short, the selection of
suppliers depends largely on how the suppliers will not
cause interruptions in the production of goods or
serving the customers. From the onset, the
entrepreneur should decide on what route to choose
when it comes to materials requisitioning. Options
include the following:

(1) Manufacturing own products or offer services

A huge chunk of capital must he prepared because all
the expenses in manpower, machines, and materials will
be borne by the entrepreneur. The entrepreneur must
have studied the business feasibility thoroughly, as the
option. A set of competent employees can be augmented
because the machines or service the customers. But these
challenges entrepreneurs can be very specific in the details
that he or she wants for the product or service lie or she can
also closely monitor the quality of products or services,
strategically design the production or service blueprint, as
well as its schedule, and be more flexible in deciding on the'
production quantity.

34

SUMMARY –RAW MATERIALS AND PROCESSING TO

2) Outsourcing of manufacturing or service activities to a
third party

Outsourcing is the process of appointing a third-party

manufacturer to do the manufacturing operations of the
business. These third-party companies already have an
expertise in handling and manufacturing these products,
supplies, or inventories, and because they manufacture, they
produce goods in bulk. These drive the companies to create
products or services tailored to the entrepreneur's needs at
a lower cost. Some outsource companies offer to provide the
services for the entrepreneur.
3) Purchasing own product or service from present suppliers

Purchasing finished products from a manufacturer or offering the services of

another company is another viable option for the entrepreneur. In this setup,
the entrepreneur cannot own the brand name of the product or service.
Moreover, the manufacturer or the original service provider is allowed to sell
to the entrepreneur's competitors. In short, the entrepreneur is just one of the
many distribution hubs of the manufacturer or the original service provide.
This setup is prevalent in distribution businesses, finished retailers, sari-sari
stores, and franchises.
 Logistics
Entrepreneurs/manufacturers can also venture into distributing
their products on their own without the aid of a distributer or agent.
This is where the entrepreneur must understand and implement
efficient logistics management. As discussed earlier, the
entrepreneur/manufacturer is responsible for manufacturing,
warehousing, transportation, inventory management, marketing, and
selling the product or service.
 Warehousing is storing the finished goods manufactured
in a facility until they are distributed to end users.
Warehousing cost is usually substantial. Therefore, the
entrepreneur should think of ways on how to reduce the
cost of warehousing by either buying an economical
warehouse or renting an inexpensive space.
Transportation will also be a major cost in logistics
management. It is the process of efficiently transferring
the products to retailers or consumers. The
entrepreneur/manufacturer must purchase energy-
efficient vehicles that can carry a reasonable amount of
merchandise to prevent inefficient trips. The
entrepreneur/manufacturer can also use the presence of
distribution hubs. The distribution hub is where the
before delivery to retailers or end consumers.
Consolidating different products in the distribution hub
elicits efficiency because, more often than not, a
manufacturer carries multiple products. Instead of
delivering per product to retail outlets, the
entrepreneur/manufacturer can consolidate all the
products needed by the retail outlet and deliver just
once.

Inventory should also be tracked religiously by the

entrepreneur/manufacturer. Each of the inventories in the
warehouse, distribution hubs, and manufacturing sites
should be monitored. The law of supply and demand must
always be taken into account. There shouldn't be a
surplus of inventory especially if the entrepreneur is
products that will be sold. The
entrepreneur/manufacturer must also ensure that there is
enough space to store and stock inventory, depending on
storage requirements (e.g., product is required tobe
stored in cold temperature).
 ACTIVITY
Instruction: In this time of pandemic, people buy only the most
needed products. Identify those basic needs. Find suppliers available
in your area using theformat below.
INGREDIENTS SUPPLIER PLACE PRODUCT SPECIFICATION PRICE ( Php )
Anna's Store Minglanilla Small 6.00
Ben's Store Minglanilla Small 8.00
#1. Egg Charlie's Store Minglanilla Small 7.00

#2.

#3.

#3.
 Assessment

1.What is the asset and the most significant factor in

the production?
A.Machine
B.Method
C.Manpower

2.What is the equivalent term of Process in 4Ms?

A.Material
B.Machine
C.Method
3. Which one does not belong to 4Ms?
A.Method
B.Marketing
C.Manpower

4. Which of the following is not considered as

qualification of the employee?
D.Work experience
E.Curriculum Vitae
F.Educational Background

5. What is the equivalent term of People in 4Ms?

G.Material
H.Machine
I.Manpower
6. What is the term that controls the implementation of
the business plan?
A.Business Operation
B.Bottleneck
C.Distribution Method

7. What is recruitment?
D.Hiring staff
E.Training staff
F.Rewarding staff

8. What purpose of job description classified as

specific?
G.Job Title
H.Job Duties
11. What are activities involved in logistics?
A. Procurement of resources
B. Distribution of products
C. All of the above

12. What is the main purpose of any supply chain in

terms of pleasing customer needs?
D. Profit
E. Expenses
F. Commercial

13. What is the management of the flow of goods?

A.Distribution Method
11. What are activities involved in logistics?
A.Procurement of resources
B.Distribution of products
C.All of the above

12. What is the main purpose of any supply chain in

terms of pleasing customer needs?
D.Profit
E.Expenses
F.Commercial
13. What is the management of the flow of goods?
A.Distribution Method
B.Supply Chain Management
C.Standard Operating Procedure

14. What is SOP stands for?

D.Sale of Point
E.Sales of Product
F.Standard operating Procedure

15. Is outsourcing increases costs of the products?

G.True
H.False