Paper P5Business Structure

Mark Fielding-Pritchard

Porters Value Chain

Porter’s Value Chain 1

Inbound logistics

Operations

Outbound logistics

Marketing and sales

After sales

Porter’s Value Chain 2

Firm infrastructure

Technology development

Human Resource Development

Procurement

Advantages of Value Chain

Focuses on each activityEmphasises critical success factorsExamines primary and support

functionsHighlights links between activities

Disadvantages of Value Chain

More suited to manufacturing than service

Quantitative analysis, can be time consuming and expensive

McKinsey 7s

Business Process Re-engineering

BPR is a fundamental rethinking and radical redesign of business processes

Features include Jobs combined Workers empowered Work is performed more logically Checks are reduced Reconciliations reduced Point of contact created

BPR b

Work with operation managers to ‘divide up’ processes

Show link between production & IT system Provide financial information Show alternative costing approaches Work on presentation Provide balance between departments

BPR c

Advantages Speed up the manufacturing cycle Eliminate unnecessary procedures Reduce cost Can be spread across several departments Encourage positive review and criticism

BPR cBPR Disadvantages Cost of making and identifying improvements is

greater than benefit of improvement May be seen as one off process May engender a culture of change for change’s sake Department improves but overall performance falls Too much process reduction may take place May hit serious resistance from some staff

Briggs a

Strategy Structure Systems Staff Style Shared values Skills

Briggs b

Strategy Structure Systems Staff Style Shared values Skills

Briggs c

Performance indicator- customer satisfaction, staff utilisation, staff retention (not immediately)

Success factorsAttracting qualified local staffSetting up performance review

systems