I am teaching one course this Summer, an MBA-level course on Operations and Supply Chain Management. Operations and Supply Chain Management focuses on how companies create and deliver products and services to meet customer demand. At the heart of the operations of a firm are the processes required to produce its goods and deliver its services. Therefore, for more than half of the course, we focus on how to design, manage, analyze, and improve a firm’s processes. Basically, a process is a series of steps or actions taken to achieve a specific result. For these steps to be considered a process, a transformation or major change must take place; in which a series of inputs are transformed into an output. In the case of a manufactured product such as an automobile or computer, various inputs such as raw materials and parts are put together by other inputs such as labor and machines, to create the final product that is valued by a customer. In the provision of services, it is often the customer who is transformed. For instance, in health care, the patient is transformed from sick/injured to healthy by doctors, nurses, medical equipment, and pharmaceuticals, while an airline is responsible for transforming its customers’ location from one city to another.
In order to best teach my students about processes, I provide them with two assignments early in the course, which allow them to better understand the context of business processes and to better understand processes themselves. In today’s column, I want to share the first of those assignments with you and allow you to complete the assignment, initially about another company and then about the company you lead or are employed by, to better understand your most important processes.
The goal of this first assignment is to show the students (and you!) how processes play a key role in a firm’s strategy and how the firm markets its products to its potential customers. As most of you know, firms typically provide “value propositions” to the prospective customers in their target markets. A value proposition tells a firm’s target market how and why its product (good or service) provides the best unique benefit and value to the customers it is trying to attract. The company is telling its potential customers that its product does better than its competitors with the things the customers value the most.
Firms provide their value proposition to their potential customers through marketing messages, most often through advertising. However, while advertising is the most common means of communicating a firm’s value proposition, it is not the only way. For instance, if a dry cleaner decided to name its store “Speedy Cleaners,” it is clearly using its name to let potential customers know that its value proposition is to have a fast turnaround in cleaning your clothes. Whether you make your value proposition in your store or product name, or you do it in your advertising, like Wal-Mart, whose various taglines over the years have focused on saving money/low prices, your processes are going to have to deliver on the value proposition you make. That is why Wal-Mart invests so much in its supply chain to ensure its low prices, and “Speedy Cleaners” would need to make sure its process for cleaning your clothes is fast.
So, the first assignment of the class is for the students to do the following:
- Find marketing or advertising from a company that indicates its value proposition. Post a link to the marketing/advertisement (website, video, etc.) and then provide a brief explanation as to what the firm’s value proposition is. Please be sure to include what the firm indicates it does better than its competitors.
- After you have identified the value proposition and competitive dimensions in which the firm promises to excel, briefly discuss what the firm’s processes must do well to deliver on the value proposition.
So, the first thing I would like you to do is to attempt this assignment for any company except yours. Whether you are watching television, listening to the radio, or a podcast, or reading a newspaper or website online, pay close attention to advertising. Choose an advertisement and complete the assignment above. Be sure to first understand the firm’s value proposition, fully comprehending why the company is saying you should buy from them. Then, consider what processes they need to perform and how they need to perform them to deliver on their value proposition.
Once you have completed this “practice round,” do it for your own firm and/or one of its products. Audit your marketing and sales materials to determine what your value proposition is, and then reflect on your processes and determine which of those are key to delivering on that value proposition, and ask yourself if they are doing so. If not, it is time to focus on improving those processes, and later this Summer, I will walk you through some process improvement techniques. Next week, I will share with you the course’s second assignment, which will allow you to better understand processes and possibly improve your life. Stay tuned!
