Value Chain Essay
Value chain management has become more and more important in industry in past decades. This report provides an insight view of value chain in automotive industry and then examine leadership role of engineer in value chain management. Furthermore, the report will analyse why engineer is so important in management of value chain. Analysis of value chain Automotive industry plays an important pillar role in the economic development of all countries. This is because the development of automotive industry will definitely drive development of new technology, development of relative industry sectors and increasing revenue of the country.
In this day and age, value chain management is becoming more and more important in automotive industry to improve their competitiveness. As value chain management is crucial part of automotive industry, how to improve the efficiancy of value chain is the key target. The value chain is aim to deliver valuable products to customer, therefore, the components involved in value chain need to integrate with others effectively to achieve high value products with less cost.
One of the components is supply chain, the supply chain in motor vehicle industry is not only the process which tramsform raw materials, parts into a finished vehicle, it also include financing, product developing, transporting, distributing to customer. Thus, many small firms may involved in the supply chain to produce a product. These organizations should cooperate closely and coordinate material, information effectively to speeding up flows in supply chain (Stadtler and Kilger, 2008). Thereby, improving competitveness of the firm. Demand chain is the other part of value chain.
Demand chain in motor vehicle industry is a process which company can anticipate customer’s demand in the vehicle market. For instance, there is a research that shows a increasingly number of young people prefer SUV cars to sedan cars, as a result, almost every car manufactors introduce fangle SUV cars to attract customers buying their cars. Advertising can be seen everywhere in order to improve the demand of vehicle market. Consequently, the purpose of demand chain is to drive and sustain customer’s demand. Marketing and sales is a way to sustain customer’s demand (Bacheldor, 2003).
However, product is the most important factor to satisfying customers’need. The product of the automotive industry is not produced by engineer without a plan, a marketing plan is necessary prior to launch a new product. The product strategy shoud be developed clearly and relisticly with the analysis of intended market, otherwise, the product may unattract to customer and the company may suffer a great of lost. Operations is all the business activities of the company, including making products and delivering to meet the goal of company.
In order to run the business more effectively, managers will make a detailed operations strategy to attain their goal. A framework is setted to carry out functions of organization. Leadership Role of engineer in value chain management The concept of how to sustain the value chain has become a hot topic within managers. One of effective way is to apply supply chain management, which is define as combine supply chain, material and imformation for the purpose of satisfying customer’s need to create net value and improve competitiveness.
According to Ayers (2001), he states that actions of supply chain management include planning, maintenance, responding to external changes and supply chain processes activities to fulfill consumer’s needs. First, in supply chain planning, engineers focus on the control of cost and satisfaction of customers’ demand, they play as a customer interface role to ensure value chain system are customer friendly and reduce cost.
Secondly, it is obivous that engineers is a maintenance role in making sure all designed system meets the specified requirements. Thirdly, they also good at respond to risk, engineers are specialists in risk management, they asess risk and control risk to minimize the loss. Lastly, engineers play vital role in value chain, especially in fulfil constomer’s demand kown as requirements role, they design products based on the requirements of consumers, considering and making sure function of all system.
Overall, engineers are significantly contribute to value creation, value mantainence and guarantee of efficiency and effectiveness, which are the characteristics of a leader (Hick et al. 1999). Benefits of using an engineer in value chain management Engineers are the core of value chain management, this is because they create and add value to the value chain. Firstly, engineers are creative, which greatly contributes to innovate and invent new products. They have professional skills to deal with complex problem and able to develop the products of what customer’s expect.
Secondly, they have responsibilities in restricting cost, making plan and strategy and guiding the process of value chain (Simchi-Levi et al. 2008). They so focus on addding value to value chain that by taking these actions can greatly improve company’s competitiveness and increase profitability of company. Lastly, engineers are required in mantaining the normal operation of value chain process and improving efficiency by coordinate participants.
Conclusion his report analyzes the value chain in automotive industry and examines the leadership role in management of value chain. Engineers have the characteristic of value creation, value mantainence and guarantee of efficiency and effectiveness which determined them leadership role in value chain management. Benefits of using an engineer like possess of professional skills, guiding operation process and improving efficiency are very attractive to companies. Therefore, it is recommended that engineers used as managers in value chain management.