Value-Added Benefits Promote Corporate Success
Value Added Benefits
Four Types of Value Added Benefits and How to Quantify Them
Adding Value to Your Supply Chain
When companies need to streamline their production process and improve the efficiency in their manufacturing process, they often look for Value-Added Benefits (VAM) to add to their overall cost structure. VAM is generally related to the concept of cost reduction. It is a means to improve the bottom line for the business. In a Value-Added Benefits approach, a company can evaluate how their production can be improved through the addition of a new process, product or technology. This means that the company may choose to remove one process or equipment or to introduce a new process or product. There are four main categories of VAM; supply chain management, product engineering, manufacturing processes and logistics.
The goal of Value-Added Benefits is to make sure that your production is efficient and your service workers understand what is being changed and why. In this way, you can improve your customer experience and make sure that your service is top notch. The ultimate goal of Value-Added Benefits is to improve the service level.
If you are considering implementing a Value-Added Benefit assessment, your first step is to ask your customers for feedback on existing processes and if they are satisfied with their current level of service. You should then go back into your budget and create a baseline value-added benefit measurement for each department or unit. From your baseline value add measurement, determine where you want to take your department or units next. You should also decide whether you would like to use a tool to determine what departments and units are weak and what departments and units are strong. Once you have determined where you want to implement value-added benefits within your organization, you should go back in your budget to define how much money you need to invest in your implementation plan.