4M’s of

Operations
Applied Entrepreneurship

Prepared by:
Mr. Alvin Jimenez Negrillo
 OPERATIONS MANAGEMENT
Operations Management is about delivering
products and services to customers to meet or
surpass the expectations. It is designing,
developing, and executing the Enterprise
Delivery System, from sourcing of the
necessary input to the transformation of these
input into the final output, which come in the
form of goods or services or both, must carry
all the features and attributes that customers
are looking for.
 OPERATIONS MANAGEMENT
All operations managers must
therefore, begin with the
customer’s wants and desires in
mind. These wants and desires
can be classified into customer
outcome expectations that are
crucial to the operations
function.
 4M’s of Operations
4M’s of Operations mainly represent factors that influence on results of any
concern process. This was used to make product design and quality defect
prevention to identify potential factors on cause and overall effect. In
manufacturing industries this method was used to apply on production control,
improvement, overall efficiency measurement, processes, and design. Let us
now describe the 4 major domains of 4M’s of Operations in relation to
business opportunity.

The 4Ms of operation in relations to business opportunity means that the four critical
domains, usually attributed to manufacturing, those are: man, machine, material and
method work together. These four critical domains are also applicable to business
opportunities since business is in essence tied to manufacturing as well. When
putting up a business, manpower is critical as well as the other elements. The
businessman must take all of those into account. Let us look at each one in detail.
Method
is a detailed procedure for accomplishing
something. It is a systematic way of doing a
particular job. Method was used in business when
developing or innovating a new products or
services, expanding your business enterprise,
searching for skilled workers to include in the
workforce, and for improving the efficiency of its
process. All of this activity was documented as
reference for every development of the business
including notations that identifies product or service
and customer preferences. This will result to a
standard operating procedure in all activities that the
business will implement.
 In analyzing this method, an entrepreneur must do these steps:

1. Identify the operation to 4. Chart the operation, whether you

analyzed. are analyzing an existing operation
or a new operation.
2. Gather all relevant information
about the operation, including 5. Evaluate each step in the
tools, materials, and procedures. existing operation or proposed
new operation.
3. Talk to employees who use the
6. Revise the existing or new
operation or have used similar
operation as needed.
operations. They may have
suggestion for improving it.
 METHOD
Method - refers to the system and step by
step process in the business. Without a
scalable process, it would be difficult to
expand the business. This means that the
methods used in the main branch must be
documented and must be replicated as
well in other branches. If it is difficult to
implement at another site, find what needs
to be improved.
 MANPOWER
A wise selection of manpower to join in your
workforce provides strategic solutions in promoting a
sustainable competitive advantage that quickly adapts
changing demands in business and its operations.
These are employees that processes and give insights
on how to reduce cost, increase productivity to
achieve a better business result. Finding an honest and
capable people is always a challenge in business. To
have them work happily and satisfied, an employer
should always take good care and treasure them by
providing the right salaries and benefits as they are
integral to the growth of the business.
To look for the right employee for the business operation, the
following are the kind of staff one should have:

1. Skilled

2. Well qualified and well verse in business

3. Responsible

4. Dedicated and committed to work

To look for the right employee for the business operation, the
following are the kind of staff one should have:

5. Honest and with integrity

6. Able to attain targets and set goals

7. Not indulge in wasteful expenditure

8. Loyal

9. Team player
 How to maximize the staff contribution to work?

Motivate the staff.

It helps to improve their morale.

Make sure they are comfortable in their

workplace.
They must be provided with the required amenities so
that their work does not appear burdensome.

Staff should be provided with necessary benefits.

They must feel that their work is worth performing. Not only the
entrepreneur should gain, but also the employee should benefit.
 How to maximize the staff contribution to work?

Self-respect is very essential.

The employee should be treated well. He
must not be treated as a slave.

The staff should also share in the profits if

possible.
Yearly bonus apart from his or her salary is added
income for him or her.

Appreciation.
Hard work and dedicated effort should be appreciated.
 How to maximize the staff contribution to work?

Leisure time should be provided for extra-curricular

activities.
He or she should also be given time to take off from
work so that he or she can go on a holiday. A change
of scene refreshes the mind.

One must listen to the woes of the employees.

Understanding their difficulties n performing the task

is essential.
 MACHINES
Machine plays a vital part in operating a
business. Aside from manpower the use of
machinery is important nowadays to make
the process of production more effective and
efficient. A machine is a mechanical structure
that uses power to apply forces and control
movement to perform an intended action. It is
controlled by people or a machine itself to
produce the necessary or required number of
productions needed.
 MACHINES
You may be able to use the manpower
to do a particular job but it is usually
more efficient if machines are able to
automate the work. The right machine
equipment can improve your processes,
productivity, and capacity to innovate.
Not only will you save time and
resources, but you’ll also avoid costly
quick fixes.
 The following are the right equipment to purchase in starting a
business:
8. Keep it green.

1. Assess your business reality. 7. Think safety first.

2. Get an external point of view. 6. Keep training in mind.

3. Invest in digital technologies. 5. Shop around for suppliers.

4. Create a technology roadmap.

 MACHINES
Machinery is also important.
Without the proper equipment, you
will not be able to perform the
needed tasks efficiently. You may
be able to use the manpower to do
it but it is usually more efficient if
machines are able to automate the
work.
 MATERIALS
Sourcing raw materials is critical in
any business endeavor as the
businessman would want to have
the cheapest possible at the highest
quality.
 MATERIALS
Once the production process is in
place, an entrepreneur shifts to the
daily activities of materials
management, which encompass the
following activities: Purchasing,
Inventory control, and work
scheduling.
 PURCHASING AND SUPPLIER
SELECTION
The process of acquiring the materials
and services to be used in production is
called purchasing (or procurement). For
many products, the costs of materials
make up about 50 percent of total
manufacturing costs. Not surprisingly,
then, materials acquisition gets a good
deal of the entrepreneur’s time and
attention.
 As a rule, there’s no shortage of vendors willing to supply parts and other materials, but the
trick is finding the best suppliers.
In selecting a supplier, an entrepreneur must consider such questions as the following:

Can the vendor supply Is the vendor reliable Is the company easy to
the needed quantity of (will materials be work with?
materials at a reasonable delivered on time)?
price?

Is the quality good? Does the vendor have a

favorable reputation?
Getting the answers to these questions
and making the right choices—a process
known as supplier selection—is a key
responsibility of operations management.
 E-PURCHASING
Technology is changing the way businesses buy
things. Through e-purchasing (or e- procurement),
companies use the Internet to interact with suppliers.
The process is similar to the one you’d use to find a
consumer good—say, a forty-two-inch LCD high-
definition TV— over the Internet. You might start by
browsing the Web sites of TV manufacturers, such as
Sony, Samsung, TCL, or Skyworth. To gather
comparative prices, you might go to a comparison-
shopping Web site, such as Lazada or Shopee. Once
you’ve decided where to buy your TV, you’d
complete your transaction online, even paying for it
electronically.
 INVENTORY CONTROL
If a manufacturer runs out of the materials it needs for production,
then production stops. In the past, many companies guarded
against this possibility by keeping large inventories of materials
on hand. It seemed like the thing to do at the time, but it often
introduced a new problem—wasting money. Companies were
paying for parts and other materials that they wouldn’t use for
weeks or even months, and in the meantime, they were running up
substantial storage and insurance costs.
Most manufacturers have since learned that to remain competitive,
they need to manage inventories more efficiently. This task
requires that they strike a balance between two threats to
productivity: losing production time because they’ve run out of
materials and wasting money because they’re carrying too much
inventory. The process of striking this balance is called inventory
control, and companies now regularly rely on a variety of
inventory-control methods.

Just-in-Time Production
The manufacturer arranges for materials to arrive at
production facilities just in time to enter the
manufacturing process. Parts and materials don’t sit
unused for long periods, and the costs of “holding”
inventory are significantly cut. JIT, however, requires
considerable communication and cooperation between
the manufacturer and the supplier. The manufacturer
has to know what it needs, and when. The supplier has
to commit to supplying the right materials, of the right
quality, at exactly the right time.
Inventory Control Methods
Material Requirements Planning
Another method, called material requirements planning (MRP), relies on a
computerized program both to calculate the quantity of materials needed for production
and to determine when they should be ordered or made. Let’s say, for example, that you
and several classmates are planning a fund-raising dinner for the local animal shelter.
First, you estimate how many people will attend—say, fifty. Next, you plan the menu—
lasagna, garlic bread, salad, and cookies. Then, you determine what ingredients you’ll
need to make the food. Next, you have to decide when you’ll need your ingredients.
You don’t want to make everything on the afternoon of the dinner; some things—like
the lasagna and cookies—can be made ahead of time. Nor do you want to buy all your
ingredients at the same time; in particular, the salad ingredients would go bad if
purchased too far in advance. Once you’ve made all these calculations and decisions,
you work out a schedule for the production of your dinner that indicates the order and
timing of every activity involved. With your schedule in hand, you can determine when
to buy each ingredient. Finally, you do your shopping.
Work Scheduling
As we’ve seen, manufacturers make profits by transforming
inputs (materials and other resources) into outputs (finished
goods). We know, too, that production activities, like all
business activities, have to be controlled: they have to be
monitored to ensure that actual performance satisfies planned
performance. In production, the control process starts when
operations managers decide not only which goods and how
many will be produced, but when. This detailed information
goes into a master production schedule (MPS). To draw up an
MPS, managers need to know where materials are located and
headed at every step in the production process. For this
purpose, they determine the routing of all materials—that is, the
workflow of each item based on the sequence of operations in
which it will be use
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