4M’S OF OPERATIONS

ABOUT THE BUSINESS

OPPORTUNITY AND
DEVELOPING A BUSINESS
MODEL
QUARTER 4: LESSON 1
 ACTIVITY 1 GUESS THE PICTURE

ANSWER:

MANPOWER
 ACTIVITY 1 GUESS THE PICTURE

ANSWER:

MACHINES
 ACTIVITY 1 GUESS THE PICTURE

ANSWER:

MATERIALS
 ACTIVITY 1 GUESS THE PICTURE

ANSWER:

METHODS
The three important elements in the production system are; the input, the
transformation of the production process, and the output.

1. MANPOWER
2. MATERIALS The Input includes
3. MACHINE the following:
4. DESIGN
5. INSTRUCTIONS
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.

The output represents the final

product from the production process
and is distributed to the customers.
 4M’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.
MANPOWER
Manpower talks about the 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
period.
Educational qualifications and experience, status of
employment, number of workers required, and 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 for 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 be unsatisfactory as
well. The entrepreneur may consider cost, quality,
availability, credibility of suppliers, and waste that the raw
materials may produce.
MACHINES
Machines are 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 the 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.
METHODS
Method or production method is the process or way of
transforming raw materials into 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 the product to
produce, mode of production, manufacturing equipment to
use, and required skills to do the work.
 REMEMBER ME!
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.

A heterogeneous product has dissimilar characteristics, parts,

and physical appearance. It can be easily identified from other
products. (ex. furniture, bags, home decor, etc.)
A homogeneous product has a physical appearance, taste, or
chemical content that can hardly be distinguished from that of
the other products. (ex. softdrinks and medicines)
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 about the features and benefits of the product
so they’re obliged to buy.
 A prototype is created before the massive
production of such a product; an entrepreneur must
consider prototyping. A prototype is a duplication of a
product as it will be produced, which may contain such
details as color, graphics, packaging, and directions.

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 so 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 lifeblood of the business. Without
them, all the efforts will be wasted as well as the chance to
venture into a new business.
 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.

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 be involved in drop shipping, where
they ship goods directly to the customers of the buyer.
 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 is a method or activity 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.
A supply chain is a structure of organizations, people, activities,
data, and resources involved in moving a product or service from
supplier to customer.
 BUSINESS MODEL
The business model describes the factors of how an organization
creates, delivers, and captures value in economic, social, cultural, or
other contexts. The development of business model construction and
variation is also called business model innovation and forms part of
a business plan.

It is a company's plan on how it will make revenues and make a profit.

It describes what products or services the business plans to
manufacture and market, and how it plans to do so, as well as what
expenses it will incur.
 BUSINESS MODEL
There are important phases in developing your
business model, namely:
identifying the specific audience;
establishing the business process;
recording business resources;
developing a strong value proposition;
determining key business partners;
creating demand for today’s generation strategy, and
being open for innovations.
What is a business plan for?
Entrepreneurs who plan to enter any There are business plans that are
business endeavor must have a written during the first few years of
business plan on hand to guide them the enterprise to guide the
throughout the process. Different entrepreneur on which strategies
business plans are prepared for would be most beneficial for the
different purposes. There are enterprise to take. There are
business plans written before setting business plans
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STRATEGY N°3
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potential of their business. re-establishing itself.
What is a business plan for?
A business plan serves many masters. First, it
serves the entrepreneur who must set a
navigational course. Second, it serves
investors and cautious financiers. And third, it
serves the managers and staff of the
organization so that they will know the
strategies and programs of the enterprise.
 EXECUTIVE MARKETING PRODUCTION
SUMMARY SECTION SECTION

01 02 03 04 05 06

INTRODUCTION MANAGEMENT FINANCIAL

SECTION SECTION

COMPONENTS OF A BUSINESS PLAN

 COMPONENTS OF A BUSINESS PLAN
01
INTRODUCTION
This part discusses what is
the business plan all about.
 COMPONENTS OF A BUSINESS PLAN
02
EXECUTIVE SUMMARY
It is part of the business
plan which is the first to be
presented but the last to
be made.
 COMPONENTS OF A BUSINESS PLAN
03
MANAGEMENT SECTION
It shows how you will manage your
business and the people you need to
help you in your operations.

Organizational chart - is the diagram

showing graphically the relation of one official
to another, or others of a company.
 COMPONENTS OF A BUSINESS PLAN
04
MARKETING SECTION
It shows the design of your product/service;
pricing, where you will sell, and how you will
introduce your product/service to your market.

Market – refers to the persons who will buy the product or

services.

Competitive Analysis - is the strategy where you identify

major competitors and research their products, sales, and
marketing strategies.
 COMPONENTS OF A BUSINESS PLAN
05
FINANCIAL SECTION
It shows the money needed
for the business, how much
you will take in, and how
much you will pay out.
 COMPONENTS OF A BUSINESS PLAN
06
PRODUCTION SECTION
It shows the area,
equipment, and materials
needed for the business.