工业工程与管理

The Plan-Do-Check-Act Cycle of Value Addition

Abstract

Gidey E, Jilcha K, Beshah B, Kitaw D

Value addition has only been measured as the difference between output and input prices and the critical roles of all functions in the process of value addition were not clearly known. Moreover, some core functions that inherently exist in the process of value addition were ignored until recently. The process of value addition and enhancement is continuous in its approach. Despite the fact that the value addition process is a continuous process, only its absolute measures were used for evaluating the intensity of value addition. Usually, value addition to a product was considered to happen only in the shop floor. In reality however, value addition is not only the responsibility of manufacturing function; rather, other functions before and after manufacturing also add significant tangible or intangible value to a product. The continuous characteristics of the value addition process can be visualized and evaluated in terms of the PDCA continuous process cycle so that value addition can be enhanced in a continuous basis. The PDCA cycle is a renowned continuous quality improvement approach and has been widely used by many successful companies as a strategic weapon for enhancing organizational performance. Hence, this paper roots its core idea towards the conceptual design of continuous value addition process using the PDCA cycle. The study also intends to identify the potential functions that were ignored and their respective roles. Thus, six core functions in the value addition process are identified and categorized into the four distinct phases of the PDCA cycle. The findings of this paper will, at large, help academicians and practitioners care for the respective roles of functions in the process of value addition and easily know how these functions interact in a continuous basis.