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.
Primary ActivitiesInbound logistics All those activities concerned with receiving and storingexternally 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 andservices to buyers.Marketing and sales Essentially an information activity - informing buyers andconsumers about products and services (benefits, use, price etc.).Service All those activities associated with maintaining productperformance after the product has been sold.
Secondary ActivityProcurement:-This concerns how resources are acquired for a business (e.g. sourcing andnegotiating with materials suppliers)Human Resource Management:-Those activities concerned with recruiting, developing, motivating andrewarding the workforce of a businessTechnology Development :-Activities concerned with managing information processing and thedevelopment and protection of "knowledge" in a businessInfrastructure:-Concerned with a wide range of support systems and functions such asfinance, planning, quality control and general senior management
ACTIVITY TOOL OUT-BOUND Lean LOGISTICS Run- charts Pareto chart MARKETING AND Pareto chart SALES Fish bone diagram
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
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.
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.
Cause and Effect , Fishbone, IshikawaDiagram:- o The diagrams 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 aset of data.o Can be analyzed to draw conclusions about the dataset.
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.
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