The 4Ms of Operations

The 4Ms of Operations

• Four crucial aspects of a strong operations plan are methods, manpower, machines, and materials.

Objective

• Students should be able to describe the 4Ms (method, manpower, machine, materials) of operations in relation to the business opportunity.

Operations Plan

• Is an important part of the business plan as it states the details clearly in operating the business.
• Operations management controls the implementation of the business plan.

Methods

• Are the processes to be followed to effectively manufacture or deliver a product or service.
• It describes how an entrepreneur will run the business, from manufacturing goods to inventory management.
• Entrepreneurs must set Standard Operating Procedures (SOPs) for manufacturing goods and rendering services.
• Refers to how an entrepreneur will run the business, covering areas like goods manufacturing, service delivery, distribution, logistics, and inventory management.
• Standard Operating Procedures (SOPs) is required to maintain standards in goods manufacturing and service delivery.

Manufacturing of Goods

• Should translate raw materials and turn them into finished goods that are acceptable to customers.
• Includes three elements: inputs, process, and output.
• Inputs are the materials or ingredients used.
• Processes involve the transformation phase using manpower and machines.
• Output is the final product intended for target customers.

Product Development

• Involves development, testing, and commercialization to solve the target market's problem.
• Comprises four sequential steps: creating a prototype, testing the prototype, developing a product/service description, and validating the market.

Product or Service Description

• Specifies how a product or service works and its benefits, acting as a blueprint for all business operations.
• Should include details that will address the market while providing personal manner using everyday terms.
• Highlight the features that will cater to the customer's need to address an underlying problem
• Should use realistic superlatives for a fitting product depiction.

Creating a Prototype

• Is a challenging part of product or service development being a preliminary model to test a product or service idea
• Entrepreneurs can see their idea turn into a tangible reality due to creativity and ingenuity used.
• Lessens implementation/commercialization risks.
• Creating prototypes enable trial-and-error, offering room for improvements while refining the functionality of the product design or service process.
• Prototypes provide entrepreneurs with a window to examine different material specifications.
• Prototypes helps entrepreneurs to effectively describe said service or product.
• Prototypes give credibility to entrepreneurs and elicit repsect from investors.

Testing the Product Prototype

• It is vital before launching to the market to uncover any loopholes.
• Allows entrepreneurs a leeway to examine and scrutinize the product while providing feedback to improve.
• Testing processes includes focus group discussions, legality and ethical tests, safety tests, component tests, product costing tests, and competitor's tests.
• Safety tests makes sure products and services are safe for all customers.
• Component testing identifies component failures for goods/services, while the costing test aligns manufacturing with the budget.
• Also includes testing against similar competitor products to compare and find the bext applications to the product/service.
• For already refined prototypes, final testing validates their readiness for commercialization.
• Ensured that products/services will not fail customers and will deliver its definite purpose
• Improvements should be fixed before commercialization.

Validation of Market Acceptability

• Finding out if the intended primary market will be willing to avail of the service, or buy the product.
• Validation should answer objective questions around how the primary market will behave.

Manpower

• Is the right human resources to handle business operations and one of the highest costs to operating one.
• Involves developing job descriptions and job specifications, and setting the process of recruitment.
• Is essential to develop Job Descriptions, which includes the title, to whom they report, a summary overview.
• It is a must to establish what competencies are needed like communication and leadership qualities.
• Also includes job duties that need to be actioned like creating schedules.
• Consists of employee qualifications such as education skills, specific skills, work experience and attitude.
• Larger firms often establish a Human Resource (HR) department to handle the selection and recruitment of candidates.
• Preparing a list of potential candidates as part of preliminary selection, whether from within or outside the organization.

External Recruitment

• Relates to locating potential applicants and encouraging them to apply outside of an organization.
• Advertising job openings (websites, newspapers, and trade journals), unsolicited applications and internet recruiting.
• Using executive search firms, educational institutions, and referrals are also great options.
• Once potential candidates are identified, a difficult screening process begins.
• Preliminary tests, interviews, as well as qualitative exams allow the company to find the best options.
• Once a candidate is selected, a contract is prepared, summarizing the terms and conditions of employment, including salary.
• A Job Contract should contain rank, responsibilities, duration, pay and resignation procedures.

Employee Development

• Is a major thrust for entrepreneurs because employees are their best assets
• Providing training to people is one of the biggest investments of an entrepreneur.
• Begins with employee orientation, one or two-day sessions about the business, its vision, procedures, and culture.
• There are key performance indicators to rate employee performance
• Most practical in training is On-The-Job-Training(OJT) supervised by a team lead.
• There should be a program to assist a new employee, such as a buddy system.
• Mentorship Programs are also encouraged for supervisors.
• Succession plans ensure business operations can continue even when employees are not present.
• Webinars offer easy to learn education for employees, and don't requite travelling.
• Internal training programs led by competent subject matter experts are also invaluable.
• This can be accomplished with salary and non-monetary perks

Machines

• Comprises of equipment, facilities and new technologies used to help business operations.
• The entrepreneur must economically manufacture their product or service by using facility placement.
• Considerations include well-ventilated sites and ensuring fire exits exist.
• Employees must be well trained with facilities to ensure safety.
• Information and technology like landline phones, laptops, accounting tools and websites are key.

Materials

• Entrepreneurs must pinpoint a solid number of dependable raw supplier materials.
• There are number purchasing practices including, manufacturing products, outsourcing, or purchasing own products.
• Outsourcing relies upon a third-party doing manufacturing operations, where no changes to branding are made.
• A patent can protect the product, with trademarks can distingush itself from others.
• All confidetial information should be kept under nondisclosure agreements.
• Outsourcing should also include several third parties as backup.
• Finished products are not branded, and similar can also take longer to build their own.

Logistics

• Entrepreneurs and manufacturers are also able to venture into distributing their products on their own to remove distributors.
• Entrepreneurs are responsible for manufacturing to vending for the product or service.
• Warehousing stores finished goods until their point of distribution.
• There are distribution hubs to combine deliveries.
• Transportation is needed to get raw materials to the manufacturing sites.
• Inventory keeps track of the historical demands while avoiding unecessary costs.

Business Model

• Can be described by dynamics of traffic lights.
• Green Lights include target high value customers and offer value.
• Red Lights include costly customers or being unable to sustain market leadership.