Premium Essay

The Role of the Engineer in the Value Chain

In: Business and Management

Submitted By fassoal
Words 1567
Pages 7
The Role of the Engineer in the Value Chain

Executive Summary

In the recent past, value chain management has undergone radical transformation through various stages of automation, optimization and integration. This is based on a variety of reasons such as shortened technology and product development lifecycles, globalization, and pressures of competitive forces. This has forced organizations to review their value chain systems in order to survive and grow in such dynamic economic environments. In the field of engineering, value chains have become vital aspects of operations management when it comes to the application of engineering systems to the industrial and commercial processes. The main purpose of this paper is to disentangle the role of the engineer in the value chain. In this context, it will go further in analyzing the key elements of value chain and any accrued benefits that come with use of engineers in the value chain management. Value Chain Analysis

The inception of Value Chain is associated with Michael Porter. He gives his understanding to this concept using a model he referred to as; “Porter’s value chain model” (Sekhar, 2009: 115). This model evaluates the strategically vital activities in a firm that boost its competitive advantage. Such competitive advantage is usually achieved through the core competencies of the firm. According to Porter, a firm is defined by a set of processes and functions which he classified into five main activities; the inbound logistics; operations; outbound logistics; marketing and sales; and service (Hinton, 2006: 171). The activity of Inbound Logistics focuses on the receipt of goods and their distribution within the firm. On the other hand, the Outbound Logistics deals with the warehousing and external distribution of finished products. The role of Operations Function focuses on the process of…...

Similar Documents

Premium Essay

Value Chain in Engineering

...Summary The concept of value chain has attracted considerable attention of managers and researchers. This report briefly presents the value chain in manufacturing industry and then explores the leadership roles of the engineer in the management of the value chain. Furthermore, this report analyzes the benefits of using an engineer in the value chain management and points out that the engineer is best suited to perform the value chain management role. Table of Contents Introduction 2 The Value Chain in manufacturing industry 2 Role of the Engineer in Value Chain 4 Main Management Actions of Value Chain 4 Leadership Role in the Value Chain Management 4 Benefits of Using an Engineer in Value Chain Management 5 Conclusion 6 References 7 Introduction The demands of the new economy caused by globalization have changed the focus of companies from internal efficiency to the creation of value in the extended enterprise, including their suppliers, alliance partners, distributors and customers. The concept of value chain has attracted a great deal of attention from managers and researchers. Porter (1985) described the value chain as a complex series of activities through which a product or service is designed, produced, marketed, delivered and supported and these activities coordinate the nexus between supply and demand. This report explains the leadership roles of the engineer in the value chain management......

Words: 1261 - Pages: 6

Premium Essay

The Role of the Engineer in the Value Chain

... The Role of the Engineer in the Value Chain 49680: Value Chain Engineering Systems Assignment 1 LE Ngoc Thang 11187604 Table of Contents 1. Summary 5 2. Introduction 6 3. Value Chain 7 4. Engineering in Value Chain 9 4.1 Inbound Criterions 10 4.2 Warehouse management Criterions 11 4.3 Logistics Operation Specifications Criterions 11 5. Conclusion 14 6. Reference 15 Table of Figures Figure 1 Supply chain of a Router 7 Figure 2 Engineering Value Chain model 9 Summary This report focuses on the key component of a business, which is Value Chain. Value Chain, as Michael Porter's definition is those activities that add value to the products and/or service provided by the company. Additionally, to achieve advantages over competitors, those activities should be run at an optimized level with careful research and strict supervision. In the first part, Supply Chain and Demand Chain are researched and in the second part, a particular industry sector will be taken into consideration to shed light on the role of engineering and by that reveal the importance of engineering in the management of Value Chain. (Porter 1985) Introduction Nowadays enterprises are facing a number of issues to maintain and expand their business. With those that manufacture goods or provide services should be aware of the importance of Value Chain in order to deeply know the flow of raw material from suppliers to end-users for example. This report gives a brief view over Value Chain system...

Words: 1541 - Pages: 7

Premium Essay

The Role of the Engineer in the Value Chain

...independent estimates (as evaluation criteria) will be obtained How procurement will be coordinated with project schedule and budget What a subcontracted Statement of Work includes Potential sources of goods and services RESOURCE MANAGEMENT The Prime Contractor will produce a Resource Management Plan that will document the following: • All materials and services to be delivered as part of the project along with cost estimates and quality information • Which materials and services will be obtained from sources outside the Prime Contractor’s organization SECTION V: OUTSTANDING ISSUES • • Prime contractor will be responsible for all work and workmanship Incentive approved for early delivery—5% of contract value Penalty approved for late delivery—5% of contract value • Temperature expected to average below 20◦ F beginning September 15, 2015 SECTION VI: APPROVALS All funding has been preapproved and placed in a reserve account against which the primary contractor may draw. Contractor may draw quarterly payments of equal amount beginning with the second quarter following start of work. Buyer will withhold first quarterly payment until all work is completed and approved at end of project close and turnover. Pending satisfactory acceptance of project close and transition, buyer will provide final payment to contractor. Note: Invoices will be generated by contractor at the close of each construction quarter. 184 • • • • PROJECT SCOPE STATEMENT EXAMPLE......

Words: 1561 - Pages: 7

Premium Essay

Value Chain

...Value Chain Can be understand how goods and services move through an organization and value is added to them. We can see above the horizontal line activity center they´re called support activities. Below the horizontal line are primary activities. Inbound Logistics which have to do with the getting raw materials into the company. Raw materials are not only one of the company´s success factors, its largest input. Suits&Co doesn´t use the fabric of domestic manufacture – because they don´t offer right products. In Portugal there are few vendors which offer quality raw materials which mostly coming from suppliers from Italy, Spain and Germany. Operations which performs operations on those raw materials. The quality of the raw materials is key factor to success. But also important part is technological level in the production process. Suits&Co invests 4 million euro per year in fabric. Outbound Logistics is the process of moving finished goods in to the hands of customers. It is distribution of finished goods. Only 25% of its sales coming from Portugal, Suits & Co are mostly focusing on American and European market. Company is planning to open new factory and office in US because of increasing demand in this market. It can help to avoid transportation costs and also be closer to Americans. Within increasing of scale Suits&Co developed ready to wear suit, shirts and ties – these accessories product are outsourcing by partners from the textiles......

Words: 580 - Pages: 3

Premium Essay

Value Chain

...Value chain analysis at air asia Air Asia is the second Malaysian national airline which provides a totally different types of service called low cost no frills. Their vision is to provide affordable price to all worldwide travellers with minimum in-flight service.thier price is slightly lower than to any other full service airlines. Before 2001 Air Asia fails to capture market or attract new customer due to its poor operation against the full fledge service given by Malaysian airlines which was supported by Malaysian government. Turning point of Air Asia was in 2001 when this loss making company bought by Tony Fernandez. Air Asia re-launched in Malaysia in late Air Asia re-launched in Malaysia in late 2001, with low cost domestic airlines. Value Chain Analysis: PRIMARY ACTIVITIES: The primary activities in Porter’s Value Chain are as follows INBOUND LOGISTICS: As inbound logistics involves different categories in air line industry for example how to schedule flights, keeping an eye on their competitors that what strategy they are adopting how to sustain in market, and how to cut off their price as they manage fuel efficiency by purchasing it advance when prices are low, and how to plan routes as they mostly plan short routes so that their costs are low. OUTBOUND LOGISTICS: As air Asia mostly uses their operations through online as their ticketing process is totally online and customer can get their tickets book online and they can also print their boarding card from......

Words: 3546 - Pages: 15

Premium Essay

Value Chain

...Contents Coursework Header Sheet 2 Introduction 5 Week One 6 Week Two 6 Week Three 6 SUPPLIER RELATIONSHIP 6 CUSTOMER RELATIONSHIP 7 IMPORTANCE OF TEAM WORK 7 Evaluation of Mass vs. Lean Production 8 REFERENCES 9 VALUE STREAM MAP 10 Coursework Header Sheet201029-58            | | Course | MARK1174: Business Proj 2 (Value Chains) | Course School/Level | EN/UG | Coursework | Simulation Game Report | Assessment Weight | 7.50% | Tutor | AK Kofinas | Submission Deadline | 14/12/2012 | Coursework is receipted on the understanding that it is the student's own work and that it has not, in whole or part, been presented the University's Regulations regarding Cheating and Plagiarism. |elsewhere for assessment. Where material has been used from other sources it has been properly acknowledged in accordance with 000621315                Tutor's comments                                                           | Grade Awarded___________ | For Office Use Only__________ | Final Grade_________ | Moderation required: yes/no | Tutor______________________ | Date _______________ | Appendix 2: Assignment Check List: (You must sign below and return this with your assignment and header sheet.) I agree that: 1. Where I have included the work of others (materials, ideas, images or text etc) I have indicated clearly in every location where the work of others appears where the work comes from. 2. I have......

Words: 1682 - Pages: 7

Premium Essay

Value Chain

...developed a set of global-scale value chain linkages, and retains national and local elements as well. The paper highlights how global, regional, national and local value chains are nested to create a pattern of global integration that is distinctive to the industry. We use global value chain analysis to help explain the limits of build-to-order in the industry, the role of regional and global suppliers, the shifting geography of production and how the characteristics of value chain linkages in the industry favour tight integration and regional production. We describe how industry concentration focuses power in the hands of a few large lead firms and discuss the implications of this for value chain governance and the geography of production. Keywords: globalisation; automotive industry; vehicle assembly and parts; GVC; global value chains. Copyright © 2009 Inderscience Enterprises Ltd. 8 T.J. Sturgeon et al. Reference to this paper should be made as follows: Sturgeon, T.J., Memedovic, O., Biesebroeck, J.V., Gereffi, G. (2009) ‘Globalisation of the automotive industry: main features and trends’, Int. J. Technological Learning, Innovation and Development, Vol. 2, Nos. 1/2, pp.7-24. Biographical notes: Timothy J. Sturgeon is a Senior Research Affiliate at the Industrial Performance Center (IPC) at the Massachusetts Institute of Technology (MIT). He has a PhD in economic geography from U.C. Berkeley, and is Co-Organizer of the Global Value Chains Initiative......

Words: 7992 - Pages: 32

Premium Essay

Value Chain

...Value chain analysis Value chain From Wikipedia, the free encyclopedia Jump to: navigation, search Popular Visualization The value chain, also known as value chain analysis, is a concept from business management that was first described and popularized by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.[1] Contents[hide] * 1 Concept * 1.1 Activities * 2 Significance * 3 SCOR * 4 Value Reference Model * 5 References * 6 See also | [edit] Concept A value chain is a chain of activities for a firm operating in a specific industry. The business unit is the appropriate level for construction of a value chain, not the divisional level or corporate level. Products pass through all activities of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of added values of all activities. It is important not to mix the concept of the value chain with the costs occurring throughout the activities. A diamond cutter can be used as an example of the difference. The cutting activity may have a low cost, but the activity adds much of the value to the end product, since a rough diamond is significantly less valuable than a cut diamond. Typically, the described value chain and the documentation of processes, assessment and auditing of adherence to the process routines are at the core of the quality certification of the......

Words: 1126 - Pages: 5

Premium Essay

Value Chain

...IT and the Executive: Value Chain Analysis Question: What is a Strategy(1) ? The Oxford English Dictionary defines a strategy as follows: 1: The art of war. 2a: The management of an army or armies in a campaign. 2b: the art of moving troops, ships, aircraft, etc into favourable positions 3: A plan of action or policy in business or politics So let us now ask this question again, and this time attempt to answer it using a more information systems and business oriented language. “Strategy is a rule for making decisions under conditions of partial ignorance, whereas policy is a contingent decision. Business strategy is the broad collection of decision rules and guidelines that define a business’s scope and growth direction.” [1] “Strategy is the pattern of objectives, purposes or goals and major policies and plans for achieving those goals stated in such a way as to define what business the company is in or to be in and what kind of company it is or is to be.” [2] “Strategy formulation involves the interpretation of the environment and the development of consistent patterns in streams of organisational decisions.” [3] “Strategy is a broad based formula for how business is going to compete, what its goals should be, and what policies will be needed to carry out those goals. The essence of formulating competitive strategy is relating a company to its environment.” [4] “ Strategic decisions are......

Words: 1554 - Pages: 7

Premium Essay

Value Chain

...According to the M. Porter Value chain is the chain of activities that a firm operating in specific industry performs in order to deliver a valuable product or service for the market. He introduced concept of value chain in his book "The Competitive Advantage" in 1985. Now this concept is one of the best known and widely applied. Value chain analysis helps to identify a firm's core competencies and distinguish those activities that drive competitive advantage. According to Porter: “Competitive advantage cannot be understood by looking at a firm as a whole. It stems from the many discrete activities a firm performs in designing, producing, marketing, delivering and supporting its product. Each of these activities can contribute to a firm’s relative cost position and create a basis for differentiation” (Porter, 1985:33) A view of these activities is given in the following figure. This is simplistic representation of company's value chain. In this figure you can see that activities fall in two categories: Primary and Secondary. Firstly, companies should identify core (primary) activities that would give them sustainable competitive advantage and secondly, identify the assets needed to achieve this advantage. Value chain activities are interrelated and represent value creation. The next figure exhibits Porter's framework of Value Chain Activities Primary Activities: relate directly to the physical creation, sale, maintenance and support of a product or service.......

Words: 573 - Pages: 3

Premium Essay

Value Chain

...ARTICLE: Value chain analysis in interfirm relationships: a field study and Interorganizational cost management and relational context. Introduction A value chain is a chain of activities for a firm operating in a specific industry. The business unit is the appropriate level for construction of a value chain, not the divisional level or corporate level. Products pass through all activities of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of the independent activity's value. It is important not to mix the concept of the value chain with the costs occurring throughout the activities. A diamond cutter, as a profession, can be used to illustrate the difference of cost and the value chain. The cutting activity may have a low cost, but the activity adds much of the value to the end product, since a rough diamond is significantly less valuable than a cut diamond. Typically, the described value chain and the documentation of processes, assessment and auditing of adherence to the process routines are at the core of the quality certification of the business, e.g. ISO 9001. Diagram 1 The goal of these activities is to create value that exceeds the costs of providing the product or service and next generating a profit margin. A Value Chain Analysis (VCA) has five parts including: a) inbound logistics; include the receiving, warehousing, and inventory control of input materials. b)......

Words: 1448 - Pages: 6

Premium Essay

Value Chain

...1. Explain the significance of integrating different quality perspectives in the value chain. A: All the perspectives together make a value chain. There are certain type of Quality perspectives namely Value perspective, Transcendent perspective, Customer perspective, Product perspective, User perspective, Manufacturing perspective. All these perspectives are primarily concentrated on the quality and performance assurance of a particular product to the customer. For a company or business of manufacturing any goods to be successful it should ensure the excellence of the product, durability for intended use, quality products for a reasonable price and of course exceeding the expectations always counts. All these qualities are assured using the quality perspectives. This is the significance of integrating different quality perspectives in the value chain. 2. Discuss the “quality revolution” that took place in the United States after 1960s. A: In USA statistical quality control was terminated after the end of the war and government contracts. At this particular time in US Japanese produced the goods with high quality and low price by “total quality” approach. Looks like they didn’t just rely on product inspection. As American mangers were unaware of this trend, Japanese manufacturers began increasing their shares in American markets. As a result manufacturers began loosing market share and the economy suffered unfavorable trade balances. At first US...

Words: 465 - Pages: 2

Premium Essay

Value Chain

...Highlights cost advantages and distinctive capabilities--the value processes But note that there is no one template. STRATEGIC COST MANAGEMENT - BA122B - Fall 2006 4-1 Value Chain and the QCT Triangle    VC allows alignment of processes with customers. This generates a quality advantage. VC focuses cost management efforts. VC provides for efficient processes which improves the timeliness of operations. STRATEGIC COST MANAGEMENT - BA122B - Fall 2006 4-2 Value Chain Benefits  Identifies value processes  Identifies areas for cost improvement STRATEGIC COST MANAGEMENT - BA122B - Fall 2006 4-3 from Michael E. Porter’s Competitive Advantage SUPPORT ACTIVITIES Firm Infrastructure (General Management) Human Resource Management Technology Development Procurement Inbound Logistics Ops. Outbound Logistics Sales & Marketing Service and Support Value Chain Model PRIMARY ACTIVITIES STRATEGIC COST MANAGEMENT - BA122B - Fall 2006 4-4 Value Chain Elements    Customer value added Margin orientation Primary activities       Support Activities  Inbound logistics Operations Outbound logistics Sales and marketing Service and support   Human resources (general and admin.) Tech. development Procurement STRATEGIC COST MANAGEMENT - BA122B - Fall 2006 4-5 Goal of Value Chain    Driven by customer perceptions Increase margins Focus on value processess   Distinctive capabilities Cost......

Words: 431 - Pages: 2

Premium Essay

Value Chain

...VALUE CHAIN – CRITIQUE/FIRM LEVEL ANALYSIS INDIVIDUAL ASSIGNMENT – UNIVERSITY OF BALLARAT CHINTHAKA ARIYAPALA – ID 30100162   Brief Content Topic Page 1. INTRODUCTION...………………………………………………………………………….. 3 2. VALUE CHAIN FRAMEWORK-CRITIQUE…………………………………………………….. 3 3. MAIN ASPECT OF VALUE CHAIN ANALYSIS…………………………………………………. 3 4. PRIMARY ACTIVITIES…………………………………………………………………………………. 4 5. SUPPORT ACTIVITIES………………………………………………………………….…………. 5 6. LIMITATION OF VALUE CHAIN ANALYSIS………………………………………………………. 7 7. COMPETENCIES……………………………………………………………………………… 8 8. INTERNAL ANALYSIS THROUGH SWOT ANALYSIS……………………………………… 8 9. VALUE CHAIN ANALYSIS……………………………………………………………………….. 9 10. CONCLUTION…………………………………………………………………………………….……. 11 11. REFERENCES……………………………………………………………………………….…………. 13 Introduction The value chain approach was introduced by Michael Porter in the 1980s in his book “Competitive Advantage: Creating and Sustaining Superior Performance” (Porter, 1985). The concept of value added, in the form of the value chain, can be utilized to develop an organization’s sustainable competitive advantage in the business arena of the 21st C. All organizations consist of activities that link together to develop the value of the business, and together these activities form the organization’s value chain. Such activities may include purchasing activities, manufacturing the products, distribution and marketing of the company’s products and activities......

Words: 2797 - Pages: 12

Premium Essay

Value Chain

...-1- The Value Chain The term ‘Value Chain’ was used by Michael Porter in his book "Competitive Advantage: Creating and Sustaining superior Performance" (1985). The value chain analysis describes the activities the organization performs and links them to the organizations competitive position. Value chain analysis describes the activities within and around an organization, and relates them to an analysis of the competitive strength of the organization. Therefore, it evaluates which value each particular activity adds to the organizations products or services. This idea was built upon the insight that an organization is more than a random compilation of machinery, equipment, people and money. Only if these things are arranged into systems and systematic activates it will become possible to produce something for which customers are willing to pay a price. Porter argues that the ability to perform particular activities and to manage the linkages between these activities is a source of competitive advantage. Porter distinguishes between primary activities and support activities. Primary activities are directly concerned with the creation or delivery of a product or service. They can be grouped into five main areas: inbound logistics, operations, outbound logistics, marketing and sales, and service. Each of these primary activities is linked to support activities which help to improve their effectiveness or efficiency. There are four main areas of support activities: procurement...

Words: 811 - Pages: 4

The Walking Dead #186A (Wk49) | Black Mirror: Bandersnatch (2018) A young programmer makes a fantasy novel into a game for a big company. Trying to keep his mind into making it right, his own reality becomes weirdly disoriented. | Fairy Tail 417