2. VALUE CHAIN
Proposed by Michael Porter of Harvard.
Tool for identifying ways to create more
customer value.
Every firm is a synthesis of activities
performed to design , produce , market
, deliver and support its product.
Products pass through all activities of the
chain in order, and at each activity the
product gains some value.
3.
4. Primary Activities
Inbound logistics
All those activities concerned with receiving and storing
externally sourced materials.
Operations
The manufacture of products and services - the way in which
resource inputs (e.g. materials) are converted to outputs .
Outbound logistics
All those activities associated with getting finished goods and
services to buyers.
Marketing and sales
Essentially an information activity - informing buyers and
consumers about products and services (benefits, use, price etc.).
Service
All those activities associated with maintaining product
performance after the product has been sold.
5. Secondary Activity
Procurement:-
This concerns how resources are acquired for a business (e.g. sourcing and
negotiating with materials suppliers)
Human Resource Management:-
Those activities concerned with recruiting, developing, motivating and
rewarding the workforce of a business
Technology Development :-
Activities concerned with managing information processing and the
development and protection of "knowledge" in a business
Infrastructure:-
Concerned with a wide range of support systems and functions such as
finance, planning, quality control and general senior management
7. ACTIVITY TOOL
OUT-BOUND Lean
LOGISTICS Run- charts
Pareto chart
MARKETING AND Pareto chart
SALES Fish bone diagram
8. TQM Tools
Here follows a brief description of the basic set of
Total Quality Management tools. They are:-
• Pareto Principle
• Scatter Plots
• Control Charts
• Flow Charts
• Cause and Effect , Fishbone, Ishikawa Diagram
• Histogram or Bar Graph
• Check Lists
• Check Sheets
9. Pareto Principle:-
o The Pareto principle suggests that most effects
come from relatively few causes.
o In quantitative terms: 80% of the problems come
from 20% of the causes.
Scatter Plots:-
o Use to define the area of relationship between two
variables.
o A scatter plot is effectively a line graph with no line.
10. Control Charts:-
o Control charts are a method of Statistical
Process Control, SPC. (Control system for
production processes).
o They enable the control of distribution of
variation rather than attempting to control each
individual variation.
Flow Charts:-
o Enables modeling of processes;
problems/opportunities and decision points.
o Develops a common understanding of a process
by those involved.
11. Cause and Effect , Fishbone, Ishikawa
Diagram:-
o The diagram's purpose is to relate causes and
effects.
o Excellent for capturing team brainstorming output
and for filling in from the 'wide picture'.
Histogram or Bar Graph:-
o A Histogram is a graphic summary of variation in a
set of data.
o Can be analyzed to draw conclusions about the data
set.
12. Check Lists:-
o It needs to be designed for the specific data it is to
gather.
o Used for the collection of quantitative or qualitative
repetitive data.
o Adaptable to different data gathering situations.
Check Sheets:-
o Their primary purpose is for guiding operations, not
for collecting data.
o A Checklist contains items that are important or
relevant to a specific issue or situation.
13. Poka Yoke:-
o It is a technique for avoiding and eliminating mistakes.
o Generally this technique is used in manufacturing
process but has much wider uses.
o Poka-Yoke is fool proofing, which is the basis of the
Zero Quality Control (ZQC) approach.
Kaizen:-
o “Improvement", or “Change for the better" refers to
practices that focus upon continuous improvement.
o kaizen aims to eliminate waste (see lean
manufacturing).
o It also applies to processes, such as purchasing and
logistics, that cross organizational boundaries into the
