Smart Chips Company, Essay Example

VCM analysis

The SmartChips Company, a specialist in cutting-edge, new first-phase microchips has conducted the following Value Chain Management (VCM) assessment and analysis toward interpretation of competitive challenges faced by competitive product innovation copying. In response to the near saturation of the company’s niche market microchip product placement, and lowering of the manufacturer’s top-of-the-line price point standard by those competitors, the SmartChips VCM is intended to provide a multi-scale recommendation for securing market share while retaining high end value. From our suppliers to our retailers, with information, materials, labor, management, and logistics the company seeks to streamline operations and add value to chain wide resource optimization, and improve revenues by 50% within the forthcoming three years.[i]

An Untraditional-Traditional Approach

Unlike older industries, the microchip business emerged in a relatively horizontal landscape of business logistics. Throughout the years, SmartChips has been reliant upon numerous vendors and partners in development of its products. In our efforts to maintain control over the quality of our products and compensate the most skilled talent, we were willing to incorporate additional costs into our product price point. The drawback to incorporation of costs, without the traditional model of vertical management in resource accountability had a two-fold impact on the corporation’s ability to offer first-of-its-kind products at a reasonable price, and according to a time schedule that met high demand for those new releases. In response to our analysis of approach to organizational systemization, SmartChips has made the decision that the company requires a new decentralized or ‘untraditional-traditional’ approach to microchip manufacturing and distribution, with more, not less, control over materials and other inputs, as well as logistics management at our various locations. Our new materials and transportation divisions will allow the company to curb costs through offset of tariffs and excessive fees in overdue shipments.

Global Linkages

On the international front, logistical linkages pose additional challenges. SmartChips found that much of the cost and time lapse in shipping to our distribution centers abroad could be reconfigured within the new model of decentralized regional locations, where manufacturing to market in fact is put into a new centralized system, controlled at all points in the chain of command by regional oversight. It is at the level of regional management, that operational diversification offers much in terms of local agreements on everything from materials (i.e. plastics) to transportation. Thus, we have eliminated the distance between downstream suppliers and our consumers. Competition must now negotiate localized markets of existing and trusted vendors whom add to the SmartChips mark of advertised credibility already recognized on those markets. Although not always adding to reduction of cost, more often than not, we are actually saving money through those regional agreements. Even in the cases where operations cannot achieve full resource management, disintermediation of third party external resources into a limited set of SmartChips microchip partnerships reduces randomness toward complete integration.

Cycle Time Management

Measure of cycle-time of SmartChips microchip from innovation to release of the company’s new products revealed that improvements could be made at all points in the infrastructural decision making process. This includes time spent between engineering proposals, and review of those procedures and protocols for by the Research and Development Management Staff. In addition, capacity building in all areas where updated technologies will contribute to better time management should be addressed immediately. Robotic workers require consistency at all locations.

Chain wide Resource Optimization

The overall recommendation to Executive Management at SmartChips by the consultant firm, VCM ProStandards, is in the area of optimization. Amendment of the Company’s Five Year Strategic Plan is currently underway. With strong market recognition and existing operational management and production systems, the enhancement of the various divisions within the corporation will be met by advancement of current procedures to include finance based management incentives. Other employees will be offered several ‘equity value’ shareholder options to promote a culture of employee ownership. Performance evaluations by management will serve to enhance product quality control, and monitor time interruptions in the work further. What the VCM reveals is that previously invisible issues resting in the way in which employees were told to prioritize their time resulted in lost revenues. Human resource management will also be involved in this effort, with training scheduled for all employees. Demonstrated results on behalf of financial management staff concluded in revision of auditing measures for a significant savings on materials and other costs. Ongoing quality control is of key interest to SmartChips. Qualitative review assessment of operations by both regional and global management teams, and SixSigma statistical sustainability reporting on internal (e.g. technical) and external (e.g. market) variances as the VCM projects mature will enable SmartChips to address chain wide resource challenges.[ii] The probabilistic data will serve to inform financial decision making important to strategic planning and our stakeholders.

Informational Sharing

As the market expands and the globe contracts, data sharing amongst all partners within the SmartChips value chain has become increasingly important. Our new inventory and logistics network is intended to improve quality of product, to market timing, and ultimately customer satisfaction and financial performance. Optimization of the entire supply chain through knowledge sharing eliminates discrepancies between service performance to our purchasers and enhanced perception of first-of-kind product as interpreted by their customers whom are utilizing the original, high quality SmartChips name in the original phase of the new chip.[iii] Control and monitoring of the system, with adequate legal counsel on distributive information flow in the various global regions, will be important to stem against competitor information stealing and trademark breach. Identity management of SmartChips microchip releases through high profile advertising and employment of media analysts will: 1) call attention to our exclusive and reliable, albeit oft hidden products; and 2) enable the company to scan international media for copyright infringement by “clone” microchip manufacturers.

[i] Value Chain Management. Reference for Business, Encyclopedia of Business, 2^nd Ed. Retrieved from: http://www.referenceforbusiness.com/management/Tr-Z/Value-Chain-Management.html

[ii]Edgeman, R.L.(2006). Six Sigma from Products to Pollution to People: Migration from Engineering and Business to Natural Social Environments. Moscow: University of Idaho.

[iii] Leigh, P. et al. (1999). Knowledge Management Strategies that Create Value. Outlook, 1.