Customer-Oriented Organizational Charts LO23190
Thu, 11 Nov 1999 09:54:03 EST

Replying to LO23165 --

>Once you know how you are going to create value, this is often done
>practically in a "value chain", where at each step "value is added".
>...Whether value has been added in a certain step can only be determined
>AFTER the customer bought the final product....Think if over and decide
>whether you want to distinguish between (mainstream internal oriented)
>adding value and (revolutionary customer oriented) creating value.

Your use of the word "creating" certainly offers a more noble picture than
"adding." It also implies a degree of authority and ownership over one's
actions. But, I don't think I agree with your conclusion that adding
implies an internal view. We have always talked about adding from an
outside view. Simply speaking we try to use the following questions. What
did your suppliers do before it came to you (they may be internal or
external to an organization), where does it go afterward and how does it
get used?

Another holistic phrase is value-stream vs. value-chain. I first heard
the expression used by Womack and Jones in their "Lean Thinking" book.
They use an example of manufacturing soda (or pop as we say in Chicago) in
aluminum cans.

Womack and Jones follow one value stream (the can) all the way back to
bauxite mining operations pointing out that the entire value stream takes
close to two years for the minerals to move from the mine to the
customer's home. One of the opportunities found during the course of this
analysis for a small bottling operation was the can manufacturer stored
empty cans in a warehouse. Once the bottler realized this, they were able
to produce "pop" ahead of seasonal peaks and store the filled containers
at their suppliers warehouse. One could argue that the can manufacturer
should have been moving toward a J-I-T (just-in-time) process, but they
were not a client.

The learning from understand the overall value-stream and how one creates
or can create new value is very powerful. The broadbased perspective
helps to generate many new ideas.

PS If it is OK I will use your "create value" expression in the future.

Michael Bremer
Flow-Works, Inc.


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