Productivity improvement, business values

A number of companies in the chemical industry were among those which discovered the enormous value that could be created by improving their PSM capabilities, a value typically in the same order of magnitude as a major new product or business. They also discovered, however, that they needed to be continually innovative in their PSM if that value was to grow year after year. New initiatives in the area have spread so fast that techniques like cross-functional teams - a novelty only a short while ago - have now become almost like a commodity, and are no longer sufficient on their own to enable a firm to distinguish itself from the competition. 

In 2002, the industry reviewed the performance of the Responsible Care program and decided to make endorsement of a new set of management principles mandatory for its members (90 percent of U.S. chemical manufacturing capacity). The objective was to realize greater business value from improved EH S performance, higher product yield, enhanced operational efficiencies and better community and stakeholder relationships. 

Quality is not merely a regulatory requirement it is also a crucial determinant for business success or failure in modem performance-oriented markets. The business strategic value of quality relates inter alia to improvement of the enterprise s competitive position, increased productivity, improved risk management and increased profitability. 

The evolution of extranets and content standards alters the bases of competitive advantage by increasing the quality of information and its access. These technologies diminish the value of established business processes and relationships because most buyers can easily find suppliers— worldwide—who offer the best product. Higher-quahty information will allow companies to improve business processes by supplementing internal capabilities with the needed skills and technologies from others—worldwide. 

Results could then be compiled, and combined, to gain further insights into services. Roth and Menor (2003) proposed that business-customer service encounters may be considered as combinations of three functional areas— the customer, the service product, and the service delivery system. Hence, enhanced business-customer service encounters could possibly be induced when one or more of these functional areas improved. In particular, an improved business-customer service encounter may arise where the customer perceived improved customer value with the services provided or in the services package being delivered. 

The QC monitoring processes described above, if supported, were limited in their ability to support improvements and could only lead to action that was reactive in nature. Process integration is weak or nonexistent. Neither process maturity and development nor proactive system management is achievable. In the past, QMS enhancement was viewed as an expense and not seen as a relational contributor to the value chain. Aware management now realizes, through regulatory action, penalty and fines, delayed product approvals, recalls, and the like that establishment of a comprehensive QMS is essential to survive in the current regulatory environment and remain competitive in the business environment. 

Process innovations occur behind the scenes and provide more value to the customer in the form of expedited service and higher quality. Wal-Mart s everyday low prices are really a conglomeration of behind-the-scenes business process innovations, as is Amazon s Buy Now with 1-Click feature. At the same time, such process innovations provide great value to businesses in the form of higher productivity, lower lead times, improved employee morale, and increased profitability. 

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