Within the Discussion Board area, write 200-300 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.
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The line managers in the production department have heard a lot of good things about value chain management. They heard that you have done considerable research on this topic. They have come to your office today to discuss value chain management with you. Complete the following:
- Summarize 3 examples of how value chain helps companies become more competitive. You are presenting these to the administrative team from the production department.
- Discuss how value chain management helps companies create and build value for their clients and partnering organizations by answering the following questions:
- How do you believe value chain management works?
- How do you think value chain management can help companies be more competitive?
- How do you think value chain management helps companies create and build value?
Be sure to include your references, and format your submission in APA format.
This course uses a simulation (separate from Intellipath) to support student learning of operations management, with real world scenarios and issues. In units 2-4, you will be completing various ‘modules’ in the simulation and tasked with including content in your submitted work that reflects lessons learned while in the simulation. The following video will help you prepare a bit for what is to come.
Watch this video explaining operations management.
- Discuss 2 items that caught your attention in the video. Write 100 words on Part II
Responses to Other Students: Respond to at least 2 of your fellow classmates with at least a 100-word reply about their Primary Task Response regarding items you found to be compelling and enlightening. To help you with your discussion, please consider the following questions:
- What did you learn from your classmate’s posting?
- What additional questions do you have after reading the posting?
- What clarification do you need regarding the posting?
- What differences or similarities do you see between your posting and other classmates’ postings?
*********THESE ARE THE TWO STUDENT POST THAT NEED RESONSES.*********
STUDENT POST#1 STEPHEN:
The intended goal of a value stream assessment is to improve efficiency, profitability, and competitiveness. The idea is to separate the various functions of production into five main categories: 1) inbound logistics (receiving, warehousing, and inventory management of raw materials) 2) operations (all efforts to produce a finished product from raw materials) 3) outbound logistics/consumer delivery 4) marketing and sales 5) Service/customer experience. We will focus solely on the operations value stream.
First we will need to create a value stream map. We will document the cycle times, the amount of time required to start and end an operation, of every process required to produce a deliverable product. This will allow us to understand where lags occur and implement strategies to optimize our use of time. The first critical target is to focus on waste. Waste is a broad category that encompasses more than physical was. Since time has been addressed, we will focus on materials and effort. The simplest way to effectively determine effort required to perform a task is to use a drawing of an area, then create a spaghetti model of an employee’s movements within their area of operation. This will highlight unnecessary steps that could be avoided by organizing an area, increase/decrease storage capacity for raw materials/components, new tools/equipment, etc. Determining and reducing/eliminating physical waste/scrap is the last example we will address at this time. This one is obvious, but is also often overlooked. Scrap is often measured in weight, but we are going to look into the dimensions of waste. Are these dimensions usable for another process? Can we purchase a product closer to our required dimensions? Based on the findings, we can offer the best course of action to reduce waste. Each of these categories translates to money. Reducing the cost of scrap, wasted time, and wasted effort will result in a product that is produced more efficiently at a lower cost, therefore making the company more competitive.
This is only adding value in one of the five categories. Still, the value added is significant. Improving the value stream within all categories of production will greatly improve cost and efficiency. Value chain management seeks to analyze each area to create an entire process value stream map, similar to the one created for the operations group. They will then be able to determine inventory requirements and turnover rates for receiving and inventory. Make improvements in the operations segment like those I’ve mentioned. Delivery options can be reviewed to determine where costs can be saved. Sales and marketing improvements can determine how to cost effectively present the product to the customer more effectively. Customer service improvements may include reduced wait times on the phone, improved receipt of defective product and delivery of replacement, a staff that is more knowledgeable of the product that can assist customers will issues that would typically result in a warranty replacement. There are many ways that value can be added within each segment of production and to truly discover where value can be added, a proper analysis must be conducted.
While watching the video, something early on caught my attention. When they were discussing new product and process design, two questions were raised. 1) What process is needed to make a product that will fit our customers’ needs? 2) How can we make a quality product and still make a profit? While this is critical for a new business, these are also fundamental questions that are asked in value stream management. The question is not exactly the same because the processes are in place and profits can be being made, but the fundamental ideas are the same. It is essentially continuous improvement for the value stream specifically.
The discussion about product quality and how suppliers can affect the final product intrigued me because I have had personal experience with this. The company I worked for made several machined products, but this one in particular was a brass orifice for an Amerex wet-down system that was used in Mine Resistant-Ambush Protected military vehicles. We received a shipment of brass that had a high lead particle distribution and ratio. This resulted in over three months of production being returned by Amerex. This being said, it is critical to build your relationships with your suppliers. Allow them to visit your facility and understand your mission and your goals. It may also be necessary for your supplier to meet with your customer so that, along with transparency, there is an understood expectation between all parties which promotes accountability from each party as well.
STUDENT POST #2
·How do you believe value chain management works?
Value chain management is similar to supply chain management in that it is concerned with the flow of products from raw material until it reaches the customers hands. However with value chain management the focus is placed on the consumer and finding ways to increase the value of the product to the customer. “To properly manage the value chain, companies often split operations into primary activities, such as logistics and production, and support activities, such as human resources, marketing and information technology. Creating a profitable value chain requires a connection between what customers value, or want, and what the company produces.” (Florida tech 2018).
·How do you think value chain management can help companies be more competitive?
The goal of value chain management is to help a company become more competitive and gain customers. “If a company can create an advantage … through a value chain analysis, it captures a competitive advantage and increases its overall profit,” the article explains. “To capture a competitive advantage, a company maps out its specific activities within the five generic value chain activities and looks for ways to create efficiencies.” (Harrison 2018).
·How do you think value chain management helps companies create and build value?
Value chain management helps companies create and build value by looking at what is valuable to the consumer and then finding ways to make a product that fits those needs. The focus of value chain management is to find what is valuable and then doing whatever they can in order to build as much value in the end product so it is desirable to consumers.
·3 examples of how value chains helps companies be more competitive
Many companies utilize value chain management in order to increase their competitive advantage. One example of a company that utilizes value chain is Starbucks. Starbucks focuses on adding value through every step of their operations including inbound logistics, operations, outbound logistics, marketing and sales, and service. “The concept of value chain helps to understand and segregate the useful (which help in gaining a completive edge) and wasteful activities (which hamper market lead) accompanying each step during the product development process. (Bajpai 2018)
McDonalds is another company that utilizes value chain in order to try to create a competitive advantage. They are constantly looking for ways to increase value to customer in order to increase their competitive advantage. Recently they have added mobile ordering and even delivery in certain areas utilizing UberEats in order to make the experience easier for the consumer. They have also been making changes to the menu in order to provide a higher quality product which adds value to the customer.
A third company that utilizes value chain is Pizza Hut. “Pizza Hut is leading the market in producing pizza that is both affordable, and can be delivered to your door in under 30 minutes (in most cities). This convenience is what sets them apart from many other competing options for meals, like going out to dinner or preparing a meal at home yourself, and they use a strong campaign and marketing focus to entice customers to use them over similar competitors in the fast food delivery industry.” (Bennet 2014).
I found the video on operations management to be very interesting and informative. One of the things that stood out the most was how important operations management is to the overall health of the company. Operations management is constantly working to improve on operations of the company in order to deliver a product or service that has the highest quality for the lowest price in order to improve profit margin and customer loyalty. Another thing I found interesting was all the real world examples of how operations management works in real companies. I especially appreciated the part on McDonalds since I work for that company and see first hand how operations management works in order to try to produce a quality product.
Florida Tech (2018) Supply Chain Management vs. Value Chain Management Retrieved from https://www.floridatechonline.com/blog/process-imp…
Harrison, Kayla (Sept 2018) What is a Value Chain Anaylsis? Retrieved from https://www.businessnewsdaily.com/5678-value-chain…
Bajpai, Prableen (April 2018) Starbucks as An Example of the Value Chain Model Retrieved from https://www.investopedia.com/articles/investing/10…
Bennett, Travis (May 26, 2014) Value Chain Analysis: Example Case Studies to Get You Started Retrieved from https://blog.udemy.com/value-chain-analysis-exampl…