Lesson 6

4 M’s of Operations in
Relation to the Business
Opportunity and
Developing Business
Model
Topics:
• Describe the 4M’s (Manpower, Method,
Machine, Materials) of operations in
relation to the business opportunity;
• Develop a product description;
• Create a prototype of the product;
• Test the product prototype;
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
- 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, numbers of
workers required, skills and expertise required for the job are some of the manpower
criteria that must be highly considered by the entrepreneur.

Material
- Talks about 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 be of unsatisfactory as well.
- The entrepreneur may consider cost, quality, availability, credibility of suppliers and
waste that the raw material may produce.
Machine
- Discusses 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
- Production method discusses the process or way of transforming raw materials to
finished products. The resources undergoes some stages before it is finalized and
becomes 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.
Product Description
- Is the promotion that 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.
- 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.
Prototyping
A duplication of a product as it will be produced, which may contain such
details as color, graphics, packaging and directions. One of the important
early steps in the inventing process is making a prototype. 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.
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
Supplier
An entity that offers goods and services to another business.
This entity is among of 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.

Suppliers 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
that has loyalty and value your partnership; a supplier that would lead you
to the fulfillment of your business objectives, mission and vision.
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.

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
Business model
describes the reasons 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 a part
of business plan.
It is a company's plan for 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.
There are important phases in developing your business model, namely;
1. Identifying the specific audience;
2. Establishing business process; recording a business resources; developing
strong value proposition;
3. Determining key business partners; and creating a demand for today’s
generation strategy and be open for innovations.
After developing a business model, we will proceed in developing a business
plan.

Business plan is an important tool for you to have an idea about the future of
your business. It serves as guide in implementing and operating your business
proposal.
The business plan is use in securing investment capital from financial
institutions or lenders.
It can also be used to influence people to work for your enterprise, to secure
Read the stories of Jessie, Mercy and Monna below to
fully understand the importance of having a business “Monna is a diligent student. Because of
plan: her knowledge gained from school about
“Jessie is the eldest of five children of Mr. & Mrs. business plan she was able to enhance
Natividad. The family is having difficulty to support for
her skills in business and finally found
their everyday needs. Because of this, Jessie tried to
enter selling banana cue and with his dream to make herself into his laundry shop business.”
his business grow, he put up many stalls in the Each scenario taught us that business
community without considering the advises of his
friends to make a business plan before implementing is not just about how much income or
his decision. After a few months his stalls shutdown.” profit you can get but it’s about the life of
“Mercy is the youngest in the family. She found out your business. And in having a business,
that she loves to cut hair and apply make up to her
friends. Until such time that her friends introduced her
you also have to consider technological
to their friends too for haircut and make up when there forces, Social forces, Political forces,
are occasions. Few months after, Mercy was told by Cultural forces, Economic forces and
her friends to put up a beauty parlor in their place. So
she asks her mother who is also a businesswoman to
Legal forces.
teach her how to make a business plan and eventually
ended with a successful business.”
The following are the components found in a Business
Plan.
• Introduction- this part discusses what is the business plan all
about.
• Executive Summary- is part of the business plan which is the
first to be presented but the last to be made.
• Management Section- shows how you will manage your
business and the people you need to help you in your
operations.
• Marketing Section- shows the design of your product/service;
pricing, where you will sell and how you will introduce your
product/service to your market
• Financial Section- shows the money needed for the business,
how much you will take in and how much you will pay out.
• Production Section- shows the area, equipment and materials
needed for the business.
• Competitive Analysis- is the strategy where you identify major
competitors and research their products, sales and marketing
strategies.
• Market- The persons who will buy the product or services
• Organizational chart- is the diagram showing graphically the
relation of one official to another, or others of a company.
The End