TwinEngines created the Industry Insights blog for companies who
participate in the manufacturing value chain. Our goal is to help
organizations increase their competitiveness by optimizing their
manufacturing value chain. So what is a manufacturing value chain
and how can TwinEngines help you optimize it?
First we start with the basic idea of the value chain. The
Wikipedia definition says a value chain is a chain of
value-adding activities of a business. Michael Porter
introduced the generic value chain model common to a broad range of
organizations in his 1985 book, Competitive Advantage. By
separating the business processes and systems into the value-adding
activities, companies can start to find opportunities to become
more competitive.
When a business can offer a product or service at a greater
value than the cost of the activities, the result is the profit
margin. Put another way, how much more customers are willing to pay
above the cost of the activities in the value chain determines how
much profit businesses can achieve.
TwinEngines describes the manufacturing value chain as the chain
of value-adding activities organizations perform to make,
distribute and sell things. It includes the supply chains and
distribution channels, and covers the business systems and
processes from sales and marketing, through manufacturing to
logistcs and repair and warranty. The operations performed in
many companies include some, if not all, the value-adding
activities that are found in the manufacturing value chain.
Organizations can become more efficient and increase their
competitiveness by optimizing the activities and synchronizing the
flow of information in the manufacturing value chain. Business
systems must communicate with each other to enable customers,
vendors, the front office, the shop floor, customer service and
dealers and partners to work together in the most efficient manner.
When this happens companies are competitive and profitable.
Optimizing the manufacturing value chain does not happen
overnight. It is a journey with goals and milestones along the way;
a continual improvement program focused on increasing profits.
TwinEngines has learned that small and mid-market companies need a
strategic plan to outline the journey and define the goals and
milestones. Often times, custom applications are the most
economical way to extend information found in core business
systems, like ERP and MRP, throughout the organization and with
customers and partners. A result of the many journeys we have made
with small and mid-market firms, is a proven method to defining the
strategy combined with a technology infrastructure for a jump-start
on the business applications.
Whether your business is eCommerce, repair and warranty or
made-to-order manufacturing, consider the following questions about
your manufacturing value chain activities. Do you have a strategy
for optimizing the value-added activities? Does your strategy align
business systems and processes with the business goals? Who is
focused on analyzing and implementing tactical applications to
ensure they fit in the strategic framework?