As desirable as the value chain management benefits can be, managers must deal with several obstacles in managing the value chain. The primary obstacles to having an efficient and effectively operating value chain management process include organizational barriers cultural attitudes required capabilities and people.
Exhibit: Obstacles to successful value chain management
1) Organizational barriers
2) Cultural attitudes
4) Required Capabilities.
Proprietary information that is critical to a firm’s efficient and effective operation.
An absence of cultural attitudes, especially trust and control also can be obstacles to value chain management. The trust issue is a critical one from the perspective of both lack of trust and too much trust. To be effective partners in a value chain must trust each other. Effectiveness requires mutual respect for and honesty about, each partner’s activities all along the chain. When that trust doesn’t exist, the partners will be reluctant to share information, capabilities and processes. But too much trust can also be a problem. For instance many organizations are vulnerable to theft of Intellectual property the proprietary information that’s critical to a firms’ efficient and effective operation. A study by the American Society for industrial Security found that those cultivating a trusting relationship with a company pose the most serious threat for intellectual property loss. Although value chain partners need to trust each other, the potential for theft can be minimized by better understanding each other’s operations and be being careful with proprietary intellectual property.
Another cultural attitude that can be an obstacle to successful value chain management is the belief that when an organizations collaborates with external and internal partners it no longer controls its own destiny. However, this needn’t be the case. Even with the intense collaboration that must take place, organizations can still control critical decision including what customers value, how much they value what they desire an what distribution channels.
We know from our earlier discussions of requirements or successful implementation of value chain management that value chain partners must have a number of capabilities including extreme coordination and collaboration the ability to configure products to satisfy customers and suppliers, and the ability to educate internal and external partners. These elements are essential to capturing and maximizing the value of the value chain but often are difficult to achieve. Many of the companies we’ve described throughout this discussion – American Standard, Deere Dell, McDonald’s, Maruti Udyog, and Tata Motors – endured critical and often difficult self evaluations of their capabilities and processes to become more effective and efficient at managing their value chain.
The final obstacles to successful value chain management can be an organization’s members. Without their unwavering commitment and willingness to make it work, value chain management isn’t going to be successful. If employees refuse or are reluctant to be flexible in what work they do, and how and with whom they work, critical collaborations and cooperation throughout the value chain will be hard to achieve.
In addition, value chain management takes an incredible amount of time and energy on the part f an organization’s employees. Managers must motivate those high levels of effort from employees.
Contemporary issues in operations management
Capitalize on e-manufacturing technology. Make sure the parts arrive just in time. Make sure what is produced is of highest quality. These issues are at the top of every manager’s list for improving operations management. While the previous discussion has focused on the external aspects such as collaborating with supply chain partners’ internal matters just also be addressed, because managers consider them essential for making products and services competitive in global markets.