The 4Ms of

Operations
 Manpower

Materials 4Ms Method

Machine
 If Sales is the engine
that powers Auto Salvage
yards then Production
is the drive train that gets
us where we are going.
Can you please explain!

Give me a number
Ms./Mr 6
 Production
Driven by Sales
The buyer buys vehicles based on statistics of what
has been sold and what has been searched. By the
same token, production managers should decide
how many and what parts to take off a vehicle based
on statistics of what has been sold and searched for
on the vehicle. Why put labor into parts that make
up less than 20% of sales? Why spend pesos chasing
nickels? With todays inventory management system,
the production managers have an unprecedented
amount of information at their fingertips and they
need to learn how to use it.
 4 Ms of
Production
 WHAT IS

METHOD ?
OWN OPINION
PLEASE CHOOSE ME !
IKAW ANG SASAGOT
NUMBER 12 NGUNIT
KAILANGANG HINDI
IKAW ANG SUMAGOT
KUNDI YANG
PARTNER MO !
 4 Ms of
Production
 1. Use the Inventory
Management System to
establish what is needed
and at what inventory
stock levels impacts the
first M-METHOD.
Based on what is known, the manager can
determine the volume of cars that need to be
processed and who will be the responsible
for each step of the process. The manager
will determine the most efficient way for
each part of the process to be done to
eliminate damage to the product and to
eliminate areas where time and manpower
are wasted. Controlling waste is the key to
efficient and profitable production.
The second M is MANPOWER
When examining the methods which
are now in place, what is the ideal
number of people it will take to
perform these methods and what
positions should they be in? how will
the personnel be trained and
measured for performance? What is
the “cycle time” of each part of the
Method?
Kung na intindihan mo paki explain nga
ulit yung MANPOWER?
 NUMBER 14
KUNG WALA 11
KUNG WALA 20
Machine is the third M in the sequence.
When examining the facilities, vehicles and
tools, is everything needed in place to ensure
the safety of the employees while maximizing
the efficiency and productivity of the
department? Do all employees have access to
the same tools and equipment, if needed? Do
the tools enable them to perform task
independently? Are they trained on how to
maintain the machinery and tools?
 Nakinig kaba ? Paki explain pls!
Don’t worry kung hindi
pinakinggan ng EX MO ung mga
explanation mo nuon , ‘wag kang
magalala PAKIKINGGAN KA NAMIN
NGAYON.
NUMBER 17
Materials is the last portion of the Ms
of Production. Are the materials needed is
in place to perform all parts of production
and they conveniently located to minimize
waste? Examples; All materials needed to
clean and package are always available
and are in place to minimize effort. Does
the layout of the production department
minimize wasted movement? Example;
Does the part flow go in one direction or
does it zigzag throughout your facility?
 Alam kong MATALINO ka’t
naintindihan mo lahat ng
pinagsasabi namin .
Dahil dyan SABIHIN MO NGA
SAMIN KUNG ANONG
PAGKAKAINTINDI MO TUNGKOL SA
PINAGAARALAN NATIN
P.S
(KUNG SINONG SASAGOT NITO MAY PRIZE )
 Measuring Production
Once the new processes are formalized and
employees are trained on how to perform, you
can begin to measure for expected
performance and begin enforcing minimums.
Do get also production standards and
implementation procedures. Once these
standards are known, the manager is
responsible in figuring out how to motivate (by
means of money/recognition) and train the
employees to reach these new standards.
 Production or Technical Feasibility
Once an entrepreneur has found
information about potential
consumers, their requirements and
likely share of the market could be
obtained for a new product, it is
then necessary to assess weather
production at this scale is
technically feasible.
Contents of Production or
Technical Feasibility
1. Production Planning
this plan should indicate how the
different stages in a process are
linked together. It should identify
any ‘bottlenecks’ in the process,
the equipment that is required for
each stage and where quality
assurance producers should be
used.
2. Raw materials and ingredients
there are two stages involved in planning
the amounts of materials that are needed
to produce the required weight of
product. It is necessary to calculate the
amount of each ingredient that will be
needed to formulate a batch of product.
Further, it is necessary to calculate the
amount of losses that cam be expected
during preparation.
 3. Equipment required
the decisions on equipment requirements
are influenced by the:
3.1. the cost and availability of
machinery
3.2. the availability of people who are
skilled in maintenance and repair;
3.3. the availability and cost of spare
parts and the possibilities of local
equipment fabrication.
4. Packaging
selection of packaging materials
frequently causes the largest
problems for small producers and is
often the main cause of delay in
getting a business established.
Considerations include the following.
4.1. the technical requirements of the
product for protection against light,
crushing, air, moisture etc.;
 4.2. the promotional and
marketing requirements ; and
4.3. the relative cost and
availability of different types of
packaging. Professional advice
should be sought from
packaging specialists or agents
of packaging manufacturers.
5. Staffing levels
decisions on the number
and types of workers that
are required to operate the
proposed business are
taken in conjunction with
decisions on equipment
procurement.
 Sa “Contents of Production or
Technical Feasibility” mamili ka nga ng
isa lang then explain mo.
ISA LANG ! MAKUNTENTO KA SA ISA!
WAG KANG TIMER !

NUMBER 9
 Developing a
business model
7 steps recommended
in establishing the
right business model
 1. Size the value of the solution in the target
segment
customers often complain that existing
approaches are not intuitive or integrated, but
old solutions may be familiar and locked in.
estimate your costs, including a 50 percents
gross margin, as a lower bound on a price.
Products too expensive for the market wont
succeed, and prices too low will an exposure.
Match with competitors prices and market
demographist.
 2.Confirm that the product or
service solves the problem.
Once the prototype or alpha
version are available , expose it to
real customers to see and feel the
same excitement and delight.
Look for feedback on how to make
it a better fit. If it doesn’t relieve
the pain, or doesn’t work, no
business be saved.
 3. Test the channel and support the
strategy.
Now is the time to pitch the entire
business model to a group of
customers or a specially selected
focus group. This is not just a product
pitch, but must include all of
elements of your pricing, marketing,
distribution and maintenance. Here
again is a chance to make a pivots for
almost no cost
 4. Talk to industry experts and
investors.
A small advisory board of outsiders
with experience in the domain can
give the unbiased needed feedback,
as well as connection s for setting up
distribution and sales channels. Its
also valuable to talk to potential
investors for their views and possible
sources of capital, even if it is for a
bootstrapping effort.
 5. Plan and execute a pilot or local
rollout.
Good traction on a limited rollout is
great validation of a business model.
It allows to test costs, quality and
pricing in few stores or a single city,
with minimum jeopardy and
maximum speed for recovery and
corrections. Save your viral campaign
and major inventory build up for later.
 6. Focus on collecting customers
references.
Give extra attention to those first few
customers, and ask for publishable
testimonials and word-of-mount
support in return. If there will be no
support, even with the personal
efforts, take it as a red flag that the
business will probably not scale at the
rate you projected.
 7. Target national trade shows
industry association groups.
There is a need for positive visibility,
credibility and feedback from these
organizations as a final validation of a
business model, as well as a product
model, I the context of major
competitors. This may also a great
source for leads as a key part of that
final roll-out and scale-up effort.
Forecasting the revenues
of the business and the
costs to be incurred
1. Start Up costs
the start-up capital is the amount of money
that is needed to buy the facilities and
equipment, to register and license the business
and get the necessary certificates.
Working capital includes the costs of raw
materials, packaging, staff training, product
promotion etc. that have to be made before
the business begins to generate income from
sales of the product.
 The start-up capital and initial working
capital are calculated to determine
whether the entrepreneur’s savings
(known as the owners equity)will be
sufficient to start the business w/o a loan.
The requirement for working capital also
continues as the business develops and a
‘cash flow’ should be prepared.
Requirements for working capital will
differ among types of business. This is
because of the seasonal nature of the raw
materials needed and other ingredients
 2. Operating costs
there are two types of operating
(or production) costs. Those
expenses that have to be paid
even if no production takes place
are called fixed cost and those
that depend on the amount of
food that is produced are the
variable costs
 3. Income and profit
from the market survey, the estimated
market size and share enable you to
calculate the expected sales. The gross
profit (or gross loss) is the difference
between the expected income and the
total operating costs over the first year,
including any loan repayments.
Income is therefore calculated as follows:
income= selling price per unit x number of
units sold