The Smart Chips Company, Essay Example

The value chain describes how a business receives raw materials and subsequently adds value to this as it proceeds through the manufacturing process to the time it is sold as  finished goods.  Robbins outlines six core requirements for value chain management:

1. coordination and collaboration.
2. Technology investment.
3. Organizational process.
4. Leadership.
5. Employee/human resources.
6. Organizational culture and attitude.

Coordination and collaboration is really about the logistics.  Within smart chip company it’s about looking at the quickest routes to market and avoiding buildup of high inventory levels.  As such producing goods , just in time,  to order.  Hence speed up decision-making by improved coordination.

Technology investment is essential if you want to remain on top of the game with your competitors and therefore have competitive advantage.  Information technology would be important  for smart chips in the areas of research, manufacturing and production control.  In 1999 spending on technology the US topped $1.4 trillion.  [Fig 1 refers] source :  (Strassman, 2003).

Figure 1 : Illustration of technology spend in USA

Organizational processes by looking towards continuous process improvement in the business.  This is accomplished by process mapping and eliminating any redundant procedures.  Equally placing more efficient processes, i.e. three steps likely to be replaced by one or more efficient step.  [Termed streamlining or optimization].  Techniques of business process engineering have three main aims.  [1], cost reduction [2]  process improvements, and [3] increased profitability.  “In today’s world of intense demanding competition, no organization has the luxury of costly business processes or broken supply and value chains”  (LX Consulting, 2008)

Figure 2 : Value Chain system for smart chips

There needs to be more leadership synergy  within the value chain management process.  In Japan they operate the Kaizan strategy providing  the employees the opportunity to become  an integral part of the process.  The lean enterprise system embraces the leadership philosophy that focuses on: improved quality, increased  flexibility, increased speed and just-in-time inventory control.  Figure 2 illustrates a leave value production system for a for Smart chips (Kotelnikov, 2010)

Equally human resources need to become more empowered in the process to assist in waste reduction, improved customer service levels and better supplier relationships.

“Traditional organizational firms  and ways of managing organizational of becoming obsolete”. (STEYN, 2010)

Rigid organizational structures are no longer viable with the demands of the global economy.  The new approach being to a line program and project management with a clear strategic direction.

Works Cited

Kotelnikov, V. (2010). Managing your value chain. Retrieved 5 21, 2010, from Business Coach: http://www.1000ventures.com/business_guide/im_value_chain_main.html

LX Consulting. (2008). Process intensification and Redesign. Retrieved 3 21, 2010, from LX Consulting: http://www.lxconsulting.com/process_intensification_continuous_improvement_value_chain_management_business_process_mapping_flowcharting_cycle_time_definition_knowledge_management_toronto.html

Steyn, P. (2010). The Bspm System for Leading and Managing the Organizationalvalue Chain. Gauteng SA: Cranfield College SA.

Strassman, T. P. (2003). IT Value Chain Management : Maximizing the ROI from IT investment. Conneticut, USA: Information Economics Press.