• Home
  • blog
  • What is a value chain? A comprehensive explanation of the roles of each department that make up a manufacturing company | Business + IT

What is a value chain? A comprehensive explanation of the roles of each department that make up a manufacturing company | Business + IT

Open/close button User menu User menu content
Login

Solve business problems by integrating IT and management

What is Business + IT?

Login

New member registration

Newsletter Registration

What is Business + IT?

  • Sales Strategy
  • Cost Reduction
  • Organizational Reform
  • Production and Manufacturing
  • Crisis Management
  • Compliance
  • Energy-saving/environmental response
  • By industry/scale
  • Core system
  • Information system
  • Operation management< /li>
  • Security
  • Network
  • Mobile
  • Hardware
  • Development
  • Related genre

    What is a value chain? A comprehensive explanation of the roles of each department that make up a manufacturing company

    The value chain is a tool and way of thinking for analyzing how much added value is created in which business department in the business process of the company's business. That said, it would be difficult to imagine how each division of a company actually contributes to the creation of added value. From a part of the contents of "All Illustrated Maker's Work" (Diamond Publishing), I will explain what the value chain is in the first place and concrete examples of initiatives.

    Yudai Yamaguchi, Akira Yukimoto, Keisuke Izumi, Shigenobu Kohashi

    Yudai Yamaguchi, Akira Yukimoto, Keisuke Izumi, Shigenobu Kohashi

    Yudai YamaguchiAfter engaging in logistics operations such as warehousing and shipping, he was in charge of demand forecasting at a cosmetics manufacturer for over 10 years. He led the design of the demand forecasting system and the development of the demand forecasting AI (see below). In 2020, under the guidance of Professor Akie Iriyama of Waseda University, he announced a demand forecasting model that utilizes intuition and is based on the “global standard management theory” (Yamaguchi, 2020). In addition to being in charge of the business course "Connecting SCM and Marketing! Fundamentals of demand forecasting" (Japan Logistics System Association), he also served as a demand forecasting advisor at a consulting firm and gave lectures on demand forecasting at various companies and universities. His publications include "Basics of Demand Forecasting" (Nippon Jitsugyo Publishing), "Strategic Use of Demand Forecasting" (Nippon Hyoronsha), and "Techniques to Prevent Out-of-Stock and Excess Inventory" (Kobunsha Shinsho). Demand forecasting innovation imagined by the fusion of knowledge” (Logistics systems) is being serialized. Ken Yukimoto works for a major domestic consumer goods manufacturer. Responsible for corporate planning, finance, legal affairs, overseas procurement and production control. Since 2010, he has been in charge of S&OP at a distributor in the United States. Former banker. Master of Laws. Qualifications (CPIM-F, CSCP-F, CLTD-F) of ASCM (Association for Supply Chain Management), a global SCM standard development and promotion organization. As a certified instructor of the same organization, he is in charge of several SCM courses such as "APICS Subject Review Course", "Introduction to Super"! World Standard SCM Seminar", "S&OP Seminar", etc. at Japan Productivity Center and Japan Logistics System Association. . In 2020, announced "Logistics Concept 2030" (JILS) with researchers and practitioners in each field. Since the same year, he has been a member of the JILS Research Committee. From 2021, he will also serve as a JILS advisor. In the book "Learn from the basics! World Standard SCM Textbook” (co-author, Nikkan Kogyo Shimbun) and “APICS Dictionary 16th Edition” (co-author, Productivity Publishing). Keisuke Izumi is in charge of SCM at a foreign chemical manufacturer. Experienced production planning, demand forecasting, supply and demand adjustment, etc. for various categories such as industrial products, construction products, and healthcare products in B to B business. He was also involved in the standardization and development of production planning operations for domestic and overseas group companies. Acquired ASCM qualification, CPIM (knowledge of inventory management and supply and demand adjustment) and CSCP (knowledge of overall supply chain management). Instructor certified by the same organization. Since the 14th edition, he has also been a member of the translators of the APICS Dictionary, which explains supply chain terms. The latest edition is "APICS Dictionary 16th Edition" (co-authored, Productivity Publishing, 2020) Shigenobu Kobashi, President and CEO of Links Co., Ltd., which specializes in logistics consulting. He was in charge of MD (merchandizer) and brand management at an apparel maker, and experienced listing and bankruptcy. After that, he worked in network construction sales at SONY's telecommunications service division, and as a marketing executive officer at a 3PL company before taking up his current position. He gave lectures on the theme of logistics at IFI (educational institution specializing in apparel), ECzine, and EC Mikata. He is the leader of the Logistics Subcommittee of the Japan Omni-Channel Association. Currently serializing the column “Aggressive Logistics, Defensive Logistics” (https://lplanners.jp/blog/kobashi-05/) on the website of Logistics Warehouse Planners.

    * This article is a reconstruction of "All Illustrated Maker's Work: Demand Forecasting, Product Development, Inventory Management, Production Management, Logistics Mechanism (Author: Yudai Yamaguchi, Akira Yukimoto, Keisuke Izumi, Shige Kobashi)".
    1. What is the value chain?
    2. Internal functions that support the value chain
    3. Departments that indirectly support the work of manufacturers
    4. Creative departments
    5. Research and development that creates sources of value
    6. Changes in R&D
     Depending on business scale (sales scale), industry, and company strategy , organizational designs vary. It is no exaggeration to say that organizations are constantly changing in line with changes in the business environment. In fact, the authors also experience large and small organizational changes almost every year. On the other hand, all manufacturers have the same structure of providing value to customers along the value chain, and there are many commonalities in the division of roles of the organizations that support it. The term "value chain" is essential to understanding the business of manufacturers. ASCM/APICS, an organization that promotes global standardization of terms and definitions related to manufacturing operations, defines the value chain as follows. A value chain is a function within a company that increases the value of the goods and services that the company sells to consumers and receives payment from. (Source: "Supply Chain Management Dictionary APICS Dictionary 16th Edition")  In other words, manufacturers create new value such as products and services, communicate it, stably deliver it to customers, and respond immediately when there is a problem. It refers to a series of flows such as protecting the value by The value chain consists of various functions working together as shown in Figure 1, and each function is carried out by specialized organizations. Products and services that meet customer needs are developed by the department responsible for marketing, but new knowledge and technology are required to provide new value. It is the research and development department that creates it, and it is accumulated through continuing basic research that does not directly aim at product and service development. Of course, research is sometimes conducted with the aim of satisfying a certain need, but research often takes a long period of time, so continuing research and development from a long-term perspective always leads to the competitiveness of manufacturers. However, many apparel manufacturers do not have their own R&D departments. A common structure is that materials for clothes are researched and developed by textile manufacturers, sewing is also researched and developed by equipment manufacturers, and apparel manufacturers adopt it. In other words, one of the competitive strengths of apparel manufacturers can be said to be the creation of new value through these combinations. The raw materials for the products and services designed in this way are arranged by the Purchasing/Procurement Department. The purchasing/procurement department and the marketing department confirm the quality, price, and delivery date of the raw materials, and decide on the suppliers to do business with. Products are manufactured at the factory using the procured raw materials. At this time, it is important to stably produce a quantity that satisfies the demand (mass production) with quality products that meet the standards. This is separate from the product design and must be confirmed by the production department or factory. Mass-produced products are stored at distribution centers and shipped according to orders from retailers and wholesalers, and the logistics department is responsible for this operation. Although the actual delivery of products may be carried out by subcontractors, this negotiation and management is also the job of the logistics department. When products are shipped to retailers and wholesalers, who are the customers of manufacturers, there is an exchange of money involved, so there is a sales department in charge of these transactions. Complaints from customers and consumers, response to returned goods, and inquiries about products are handled not only by the sales department, but also by the department that specializes in customer service. In addition, IT, human resources, public relations, IR (Investor Relations), auditing, finance and accounting support departments (back offices) that cross these value chains, and corporate planning departments that determine the direction manufacturers are aiming for. is also available (Chart 2). These are not manufacturer-specific and are also installed in other industries. [Next page] What are the roles of the IT, HR, IR, finance, accounting, and corporate planning departments that support manufacturers? Whole Commentary

    Recommended Articles

    To list

    To list

    To list

    PR

    SB Creative Co., Ltd.

    Business + IT is operated by SB Creative Corp. of the SoftBank Group.

    Copyright © SB Creative Corp. All rights reserved.

    By registering as a business+IT member, you can subscribe to members-only content and e-mail newsletters, and be invited to special seminars!

    Registration benefits Membership registration (free)