Leaders outline expectations

It is important that leaders outline expectations for what’s involved in the organization’s pursuit of value chain management. Ideally, articulating expectations should start with a vision or mission statement that expresses the organization’s commitment ton identifying capturing and providing the highest possible value to customers. For example when American standard companies began its pursuit of value chain management the CEO attended dozens of meetings across the country explaining the changing competitive environment and why the company needed to create better working relationships with its value chain partners. Throughout the organization, then managers should clarify expectations regarding each employee’s role in the value chain. Being clear about expectations also extends to partners. For example managers at American standard identified clear requirements for suppliers and were prepared to drop any that couldn’t meet them. The company was is serious about its expectations that it did cut hundreds of suppliers from air conditioning baht and kitchen and vehicle control systems businesses. The upside was that those suppliers that met the expectations benefited from more business and American standard had partners that could deliver better value to customers.

Employees /human resources

We know from our discussions of management theories and approaches throughout this textbook that employees are the organization’s most important resource. So, not surprisingly employees must play an important part in value chain management. Three main human resources requirements or value chain management are flexible approaches to job design an effective hiring process and ongoing training.

Flexibility is the key description of job Design in a value chain management organization. Traditional functional job roles such as marketing, sales, accounts payable customer service representative and so forth — are inadequate in a value chain management environment. Instead jobs need to be designed around work processes that link al functions involved in creating and providing value to customers. This type of flexible job design job design supports the company’s commitment to providing superb customers value. In designing jobs for a value chain approach, the focus needs to be how each activity performed by an employee can best contribute to the creation and delivery of customer value, which requires flexibility in what employees do and how they do it.

The fact that jobs in a value chain management organization must be flexible contributes to the second requirements: Flexible jobs require employees who are flexible. In a value chain organization employees may be assigned to work teams that tackle a given process and are often asked to do different things on different days, depending on need. In an environment focusing on collaborative relationships that may change as customer needs change employees’ ability to be flexible is critical. Accordingly the organization’s hiring process must be designed to identify those employees who have the ability to quickly learn and adapt.

Finally, the need for flexibility also requires a significant investment in ongoing employees training. Whether the training involves learning how to use information technology software, how to improve the flow of materials throughout the chain, how to identify activities that add value, how to make better decisions faster, or how to improve any number of other potential work activities managers must see to it that employees have the knowledge and tools they need to do their jobs. For example, Maruti has designed a mandatory training program for the sales and service staff of its dealers that focuses on customer’s orientation in its drive to increase the sales satisfaction index (SSI) of its customers through its dealers. These employees receive continuous technical training, as well as attitudinal development training, which allows them to respond better to customers’ needs.

At TISCO, during the customer week, large customers are taken through the entire production process, and employees are encouraged to directly interact with customers to understand their specific requirements.

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