Entrepreneurs make optimum use of 4M (Man, Machine, Material & Money)
Opening Case Study:
Optimizing the use of 4Ms: Karsanbhai Patel
Karsanbhai Khodidas Patel (K.K.Patel) is a befitting example of a self made man making the best possible use of available resources. Coming from a humble farmer family he understood the need of the masses to serve a segment that was neglected but at the same time highly profitable. He established a position for his firm in the lower income segment of the detergent market, overtaking many heavy weights and multinationals, to emerge as a winner. Literally, he made money by washing other s’ dirty linens. He is the founder of the powerful brand ‘Nirma’ which he aptly positioned using all the 4 M’s of business(viz. Man, Machine, Material & Money) to his advantage. Karsanbhai Khodidas was born in 1945, in Ruppur village in north Gujarat in a family of farmers. He graduated in Chemistry at the age of 21. Initially, he worked as a lab technician and later served the state Government. In 1969 at the age of 24, Karsanbhai started manufacturing phosphate free detergent powder, Nirma (named after his daughter Nirupama) in his backyard. He dedicated after office hours for manufacturing Nirma and sold on his bicycle while going to his work place, which was 17km from his home. The handmade detergent packets were sold at Rs. 3 per kg, which was one-third of then least priced popular detergents. At that time domestic detergent market was limited only to premium segment and was dominated by MNCs. Karsanbhai Patel started door-to-door selling of Nirma and priced it at Rs. 3 per kg. The next available cheapest brand in the market at that time was Rs.13 per kg. Nirma revolutionized the whole detergent powder segment and in a short span of time created an entirely new market segment in the domestic detergent sector market. It gave the bigger established brands a run for their money and soon occupied the top market share. To add to all this, Nirma was made of an innovative formulation, which global detergent giants were later on compelled to emulate, it was phosphate free and hence environment friendly, and the process of manufacturing was labour intensive, which offered large scale employment. The company that was started in 1969 with just one man who used to deliver his product from one house to the other, today employs around 14 thousand people and has a turnover of more than $ 500 million.
Starting a business organization has always been a challenge for an entrepreneur since it became scientific. The most basic identified accounts of business management in man’s existence were inclined to be crude, brutish and short. Any process found to be an obstacle to any growth in entrepreneurship was either ridiculed or beheaded off for ‘progress’ to be made. Then industrial revolution occurred. It welcomed machines and bid goodbye to servitude. Slavery ended as people had causes to be more ‘humane’ in business. Then came the era of mass production. Products were manufactured at the touch of a button. Materials were optimally utilized. Time became shorter and physical exertion of force required to create utility became a thing of the past.
Since man became victorious in the industrial revolution, every business has been using these four M’s: man, materials, machines and money; to operate with success. To create any venture without any one of these M’s is simply impossible. It is sheer entrepreneurial waste to even attempt to start a venture in the absence of even one of these 4Ms. No one should even contemplate doing that. Failure awaits such business. It will also be devastating for organizations not to correctly and efficiently organize the 4M’s for business success. None of the M’s is futile no matter the point of view it is viewed from. A meta-analysis of business ventures that have survived over a period of time has revealed that careless regard to any of the four resulted in economic debacles, with some even affecting global business.
Man, the first of the four M’s is the most significant. The right person for the right position is a sure gamble for organizational effectiveness and efficiency. No two ways about that. Thus, lateness and absenteeism, unsafe acts, alcoholism, poor training, incompetence are just some of the attributes of man at work that could lead a business venture to failure. Human resource decides the workings of the other three basic business resources. Man ensures that materials, machines and money are made use of in a productive manner to achieve goals or aims and objectives of organizations and enterprises. Poor employment practices are unfavorable to the existence of such ventures. With the right man in the right job, effective business management can be achieved.
Without materials, human resource is in vain. Thus every organization is aware of the fact that materials needed for any business or service must be in place before ‘man’ can be of use in any business venture. The birth of supply chain departments has grown out of this thinking and has been a very helpful and valuable aspect of business management. For instance, a group of cement factory workers awaiting supply of limestone may have nothing much to do for as long as the supply does not arrive. Even in the case it arrives, but in poor quality, the production is certainly destined for a loss. Quality compromised is business pauperized. Poor quality of materials potentially ruins entrepreneurship. This is an indisputable fact.
The invention of machines has facilitated man to fulfill effortlessly various dreams of creating things that make existence more meaningful. Machines have substituted man in tilling, planting, and harvesting. Man has been replaced with looms in cotton and fabric processing. Innumerable other ventures that need physical exertions of force has been successfully taken over by things fixed with gears, bolts and nuts and conveyor belts. Lately, computers have aided in the battle of increasing production and reduction in time used up by man for manufacturing and general production of goods and services. Yet, without man and materials, machines will be worthless. They need to be operated by man and fed with materials.
Affluence and accomplishment are what majority of entrepreneurs envisage when they start their own business venture. For an entrepreneur’s business to succeed, though, demands more than a vision of success. Funds, the money required to start, run, and grow a business is vital, as is managing personal finances while balancing the demands of an entrepreneur’s business. Devoid of money, no venture or enterprise can encourage workers, get quality and adequate materials, get the right machines and retain them or even ensure that time is properly managed. Capital management, when not properly planned has been the most acknowledged factor involved in fall down of enterprises in history. The quantity and quality of money invested in ventures have a direct bearing on the prosperity of same over time. Accounts department have evolved over the years, by man, to ensure maximum operations of surviving business organizations. Where there is not adequate money, no quality workers, materials, or machines can be engaged or purchased or acquired. In other words, such a business venture will be waste of time.
How to Make Optimum Use of Business Resources?
A business resource is valuable for the successful operation of an enterprise. For example, an employee is an enormously valuable business resource, as is a computer, software program or a book that contains information that aids in producing business income. Business resources also comprise of financial assets, including checking accounts and credit cards. Following are the steps that you can follow as an entrepreneur to make optimum use of his business resources.
Discover everything you can as an entrepreneur about a business resource so that you can make use of that resource completely. Having a complete understanding of the product, service or person at your disposal aids in deriving more value from your investment. For example, if you buy business equipment and don’t read the manual to learn that a few features can cut your production time in half, you’re wasting time and money.
Take care of your human resource; treat your employees, with reverence, appreciation and recognition. When an entrepreneur displays respect, compassion and gratefulness for the work of the employees, it facilitates in boosting worker morale and productivity. Conduct an occasional party to remind employees that you value them.
Operate your tangible business resources with care to make certain that you have them for as long duration as possible and get utmost use out of each item before having to get a replacement. Handle your computers with care and perform regular maintenance activities to keep them running at top capacity. Do the same with business vehicles and heavy equipment.
Increase the operational life of equipments by turning off business machines or place them on standby when not in use.
Bargain all business agreements to get the optimum price possible and shop around to make optimum use of your company’s financial resources. Check out at banks for the best deals for accounts and business credit cards.
Evaluate how you use your office provisions as an additional way to make best possible use of business resources. Print documents double-sided to save paper, and explore purchasing quality recycled ink refills for printers.
Prepare an inventory of all of your business resources in a spreadsheet program. Incorporate the name of each item, purchase date and estimated useful life. Make every attempt to make the most of all of those resources until the end of the estimated useful life before purchasing others.