Ch4
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Value Chain Thinking
Xiaomeng Su 7th,November
Outline 4.0 Introduction 4.1 The value chain principle 4.2 R/3 and the value chain 4.3 Overview of part two:value chain thinking. 4.4 Examples.
1
Introduction z R/3 provides cross-functional integration of business process. z Functional versus process-bassed structure. z This chapter will examine key scenarios in the value activity areas. y y y y y y y y y
Sales and distribution Production planning Procurement Financial accounting Business planning and controlling Organization and human resources management. Capital asset management Finance management Customer service
Organisational functions A function is a unit in an organisation that carries out a set of related activities. Usually, these activities require special competence or equipment. Examples: Marketing Sales Procurement R&D
Systems Janitor administration
Course registry
Teaching
2
Processes
A business process is a sequence of activities that result in value for a customer Typically resources from several functions are required to carry out a process
Processes cross functions
Course
Systems Janitor administration
Course registry
Teaching
3
Function oriented
IT systems
Functions in an organisation Personnel
R&D
Market/ Sales
Production
Service
Financials
Each IT system supports its own function
Process-based structure
Orderhandling Productdevelopment Customerservice Financial reporting
Financials Personnel
R&D
Market/ Sales
Production
Service
4
4.1 Value Chain principle z The concept of value chain.
y Professor Michael E. Porter y Value chain as a tool for ascertaining a company’s competitive advantage.
z Value activities y Primary y Support
z A better organization structure can be created around the value activities that can most improve a company’s competitive advantage.
The Value Chain - Activities
Firm infrastructure Support activities
Human Resource Management Technology development Procurement
Primary activities
Inbound logistics
Operations
Outbound logistics
Marketing & Sales
Service
5
ERP means integration
•ERP definition Software solution that addresses the enterprise needs taking the process view of an organisation to meet the organisational goals tightly integrating all functions of an enterprise. •PP 64 figure 4-3
4.2 R/3 and the value chain z SAP provides over 800 best business practise(scenarios) in Business Blueprint. y Logical models for the optimisation of specific business processes. y Both primary and supportive value activities. y Reflect the experience of a wide range of industries. y R/3 logistics applications are effective for the streamlining of value activities.
6
4.3 Overview of part 2 z Part 2 (process design) will cover events from the request of a order to the delivery of product to customer. z Part 2 overview, pp 65 figure 4-4.
Example1: order-to-delivery of copy machine Customer
Sales rep.
Supplier
Order Customer info Purchase order Quote
Plant
ERP Production order Accounting
General ledger
7
The value chain Support
Order Administration
Competitors & Products Mailings Calendar etc
Contracts Returns Delivery Schedules Product proposals Availability & Credit check Completion check
Pricing Configuration EDI Follow-up etc
Shipping
Invoicing
Picking/Packing Pricing Credit check Follow-up etc
Pricing Bonus Grouping Invoice List Debit/Credit etc
Copy Machine
Sales Support
Inquiry
Quotation
Sales Order Processing
Delivery
Production Project Financial update Human Resource
Service
Transport planning
Purchase
GI
Invoice
Financial update Profit. Analysis Quality
Corporate Plan
Example2: AMCC z Applied Micro Circuits Corporation delovepes circuits. z The main reason for reengieer was to better meet the customer needs. z SAP was chosen. z Main benefits: y Respond to customer inquiries immediately y Break down functional barrier and achieve integration.
8
Xiaomeng Su 7th,November
Outline 4.0 Introduction 4.1 The value chain principle 4.2 R/3 and the value chain 4.3 Overview of part two:value chain thinking. 4.4 Examples.
1
Introduction z R/3 provides cross-functional integration of business process. z Functional versus process-bassed structure. z This chapter will examine key scenarios in the value activity areas. y y y y y y y y y
Sales and distribution Production planning Procurement Financial accounting Business planning and controlling Organization and human resources management. Capital asset management Finance management Customer service
Organisational functions A function is a unit in an organisation that carries out a set of related activities. Usually, these activities require special competence or equipment. Examples: Marketing Sales Procurement R&D
Systems Janitor administration
Course registry
Teaching
2
Processes
A business process is a sequence of activities that result in value for a customer Typically resources from several functions are required to carry out a process
Processes cross functions
Course
Systems Janitor administration
Course registry
Teaching
3
Function oriented
IT systems
Functions in an organisation Personnel
R&D
Market/ Sales
Production
Service
Financials
Each IT system supports its own function
Process-based structure
Orderhandling Productdevelopment Customerservice Financial reporting
Financials Personnel
R&D
Market/ Sales
Production
Service
4
4.1 Value Chain principle z The concept of value chain.
y Professor Michael E. Porter y Value chain as a tool for ascertaining a company’s competitive advantage.
z Value activities y Primary y Support
z A better organization structure can be created around the value activities that can most improve a company’s competitive advantage.
The Value Chain - Activities
Firm infrastructure Support activities
Human Resource Management Technology development Procurement
Primary activities
Inbound logistics
Operations
Outbound logistics
Marketing & Sales
Service
5
ERP means integration
•ERP definition Software solution that addresses the enterprise needs taking the process view of an organisation to meet the organisational goals tightly integrating all functions of an enterprise. •PP 64 figure 4-3
4.2 R/3 and the value chain z SAP provides over 800 best business practise(scenarios) in Business Blueprint. y Logical models for the optimisation of specific business processes. y Both primary and supportive value activities. y Reflect the experience of a wide range of industries. y R/3 logistics applications are effective for the streamlining of value activities.
6
4.3 Overview of part 2 z Part 2 (process design) will cover events from the request of a order to the delivery of product to customer. z Part 2 overview, pp 65 figure 4-4.
Example1: order-to-delivery of copy machine Customer
Sales rep.
Supplier
Order Customer info Purchase order Quote
Plant
ERP Production order Accounting
General ledger
7
The value chain Support
Order Administration
Competitors & Products Mailings Calendar etc
Contracts Returns Delivery Schedules Product proposals Availability & Credit check Completion check
Pricing Configuration EDI Follow-up etc
Shipping
Invoicing
Picking/Packing Pricing Credit check Follow-up etc
Pricing Bonus Grouping Invoice List Debit/Credit etc
Copy Machine
Sales Support
Inquiry
Quotation
Sales Order Processing
Delivery
Production Project Financial update Human Resource
Service
Transport planning
Purchase
GI
Invoice
Financial update Profit. Analysis Quality
Corporate Plan
Example2: AMCC z Applied Micro Circuits Corporation delovepes circuits. z The main reason for reengieer was to better meet the customer needs. z SAP was chosen. z Main benefits: y Respond to customer inquiries immediately y Break down functional barrier and achieve integration.
8
