The firm as a value‐added system

Abstract

Suggests that much of the competitive dilemma experienced by US and European firms in recent years is a result of a persistent failure to manage the firm as a cohesive value‐added system. The complexity of the interactions among the firm′s value‐added abilities underlies this challenge of integrating the firm′s value‐added activities. Presents a paradigm of the firm that provides both a rationale and a starting point for the integration of the firm′s value‐added materials management activities. Suggests a framework, the essence of which is that customer value is added by the functional areas only when consistency exists among decisions made in each of four major decision areas. Addresses information and measurement issues as facilitators which link the decisions areas and bridge the gaps among the functional areas.