Value Navigator – Who pays my salary?
In a shared work environment, tasks are distributed to all participants within a process and you can calculate the added value with the Value Navigator. The added value of each employee or process must always be seen in the light of the business purpose and is defined based on this. The business purpose is always the one who pays the salary check of all participants at the end of the month. The added value of a position or function should and must be aligned with it. With the Value Navigator ADCONIA shows exactly this for the function of Supply Chain Management.
Value added calculation with the Value Navigator
The world of work is easy to describe in a one-man business. The person makes his or her manpower available to the customer and he or she pays for it. The added value is evaluated directly, if you work one hour longer, you earn more. The Value Navigator is uniquely defined here. This becomes more difficult in larger companies. There are the salesmen and the workers in the production who have a direct relation to the sale of products and services. And there are the supporting processes: Controlling, supply chain and HR management. Bad tongues speak of the additional overhead costs that have to be passed on to the product or service for the customer.
Value Navigator in Procurement and the Supply Chain
The tasks of supply chain management include purchasing, procurement logistics, warehousing and shipping. But how do you determine the added value of the individual functions in such a distributed work environment? The employee who makes purchased material available to production first generates costs. As a solution, one could reduce costs if the employee only performs his tasks once a week, but then production would be full of material or material would be missing for production. A production interruption for self-sufficiency by the production employees will also not be a solution. The employee who supplies the production with material is therefore an important wheel in the overall structure and thus generates added value. With the Value Navigator, this can be displayed.
You can say something comparable about procurement. Often the prejudice exists that the purchase would spend only money. First, also correctly, the sales department must earn money. But the supply at the right time at the optimal cost level is an added value that benefits the entire value chain.
Value Navigator in the Value Chain
How to determine the added value in a value chain? The Value Navigator is based precisely on this basis: Who pays for the output of a value chain and according to which criteria does the customer select exactly this value chain? This determines the key figures that are decisive for the added value of the value chain. With the Value Navigator, these can be broken down into a process, a function or a position and determined. And the ratio of different key figures is always considered and passed on to the individual position.
If, for example, the uniqueness or competitiveness of the value chain is based on the high availability of an innovative product at good conditions, the employee must ensure a smooth supply for the production. In order to minimize the risk, the corresponding safety stocks at the production facilities must be increased accordingly. The added value of the position does not consist in the elimination of stocks, but in a 100% supply of the production so that it produces without interruption. The procurement department must find the appropriate supplier and structure the contracts with him in such a way that a supply is secured. Perhaps even with regional buffer warehouses but in any case, with a transparent forecast system.
ADCONIA’s consulting is based on precisely this premise, the Value Navigator. Our first concern is always to understand on what basis the value chain works successful and what added value the supply chain has to deliver. This determination of added value determines the processes, the strategies up to the organisational structure and the individual job descriptions.
Managing Director, ADCONIA GmbH (Oberhausen)
Cossutltant, ADCONIA GmbH (Oberhausen)