VALUE CHAIN MAPPING

PRESENTATION BY:

SAURAV SINGHPGDM-2012-1450037

INTRODUCTION• Value chain as a term was created by Michael E Porter (1985)

• A value chain “disaggregates a firm into its strategically relevant activities in order to understand the behavior of costs and the existing and potential sources of differentiation”.

• Value chain mapping approach is adopted to analyze a process to identify steps that can be improved.

Waste and Elimination of Waste“ anything other than the minimum amount of equipment, materials, parts , and workers (working time) which are absolutely essential to production” Fujio Cho

Seven prominent types of waste are:1.Waste from over production 2.Waste of waiting time.3.Transportation waste.4. Inventory waste.

5.Processing waste6.Waste of motion7.Waste from product defects

Value Chain Mapping

Stage 1

Stage 2

Stage 3

•Developing a baseline map of the current situation of a company’s external and/or internal operations.

• Applying Value Chain principles.

• Developing future state map with improved operations.

Value Chain Mapping-Cont.

• Value Chain Principles 1.Keep value chain moving at maximum velocity. 2.Eliminate waste that stops, slowdown, or diverts the value chain. 3.Concentrate on removing waste rather than speeding up value adding operations. 4.Look for waste in factory, office ,physical, procedural and technical operations.Begin End

Redo Loop

Redo Loop

Lead Time

Value –added act.

Non-Value –added act.

Waiting

Thank You!!!