Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur

Table of Contents Executive Summary....(i) 1.0 Introduction ............................................................................................................ 1

1.1 Company background...1 1.2 Purpose.........................................................................................................................1 1.3 Definition of customer values..1 1.4 Methodology3 1.5 Limitation.3

2.0 Value Chain of the product/service ...................................................................... 3

2.1 Cost.5 2.2 Quality6 2.2.1 Total Quality6 2.2.2 Six Sigma.7 2.3 Response time.8 2.4 Dependability of delivery...9 2.5 Convenience9 2.6 Style and fashion...10 2.7 Ethical issue..11 2.8 Technology...11 2.9 Flexibility..12 2.10 Personalisation13

3.0 Survey Result ........................................................................................................ 13

3.1 Demographic data .........................................................................................................13

Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur
3.2 Customer satisfaction ....................................................................................................14 3.3 Customer Expectation ...................................................................................................15

4.0 Recommendation.................................................................................................. 15 5.0 Conclusion ............................................................................................................ 15 6.0 Glossaries......17 7.0 References.18 Bibliography.23 Appendixes24
Appendix 1: Ethical approval Appendix 2: Pro-forma Appendix 3: Value transfer model Appendix 4: Six Sigma phases- DMAIC Appendix 5: Demographic data Appendix 6: Interview question and answer Appendix 7: Interview question (clean sheet) Appendix 8: Questionnaire

8.0 9.0

Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur

Executive Summary
This report is to analyse the importance of customer value and how does it influence the each of the operation activities in Kia Power Sdn. Bhd. The first part of the report explained in generally about the customer value toward organization and also customers. In this section also explained how the customer value will influence the operation activities of an organization. The second parts of the report explained the value chain in the product or service and how an organisation provides each of this value by their operation activities. In this section also each of the value had listed out and explained in general and applied how KP arrange their operation activities on each of the value in order to add value to their customers. The method use to do survey in this research is quantitative approach which collection and analysis of data in numeric form. 25 sets of questionnaire consist of close ended and open ended questions to understand their satisfaction toward value provided by KP and their expectation toward each of the value are prepared for the chosen respondent. The result of the survey shows their satisfaction level towards the product provide by KP and how important of each value to the customers. Other than that, the result also shows that the operation activities provided by KP will satisfy on one side of the customers and also will make dissatisfaction to some of the customers as different people will have different point of view toward the value that they had received. Some of the recommendation had been given by customer and the researcher himself to KP in order to improve in the operation activities to provide more satisfaction and superior value to their customers. In the end of the report, the researcher had show his understanding on the importance of the value for the operation design of an organization.

Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur

1.0 Introduction
1.1 Company Background Kia Power Sdn. Bhd. or in short KP is an organisation created by Mr. Low Sar Yan at 11 July 2007 to replace Express Genuine Parts Sdn. Bhd., which started from 1 January 2000 that is one of the leading corporate that selling automobile spare parts in Malaysia. KP can be said as had survived more than 10 years in the automobile spare parts industry. Kia Power is authorized to distribute the automobile spare parts for Naza, Kia, Mazda and Ford for all car models such as van, truck, saloon, bus, MPV and etc. (Kia Power, 2011)

1.2 Purpose The purpose of the report is to analyse the importance of customer values and how does it influence the operation activities of an organisation.

1.3 Definition of Customer Values Customer value is one of the important challenges that faced by most of the managers nowadays. According to Cravens and Piercy (2006), customer values can be divided into business view and customer view which for business view customer values are a result of a business strategy that depends on the understanding toward customer needs while for customer view, customer value consists of benefits and costs resulting from the purchased and use of a product. This means that for business view, customer values are created from business activities after understanding customer needs while for customer view, customer values are the benefits and costs upon a buying experience. (Christopher, 2005)

Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur Besides that, Doyle (2008) claimed that values comes from knowledge but not product which profits of any businesses are comes from solving customer problems and the product is only vehicles for offering customers solution. This means that the values created by solving the customer problems and the products or services offered by any businesses are only the tools that helping their customer to solve their problem. For example is that restaurant creating values by offering foods to solve customer hungry problem. Hill et. al. (2007) also claimed that customers consider customer value with four basic categories which are low price, what is wanted in a product or service, the quality received for the price paid and that which is received for what is paid for. This also can be explained as value will be created for customers as the benefits that the customer perceived from a product or services are greater than what it cost. The diagram below shows an example on how each of the activities of a company from input resources transforms toward an output of products or services adding value to the customers (Slack et. al.,2001).

Figure 1: Operation Management and Strategy Source: http://www.flickr.com/photos/drawpack/5514849176/sizes/m/in/photostream/

Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur According to the interview done with the entrepreneur of KP, they are aware and knowing that the customer value will promote better business relation. The feedback given by the customer help KP to know that the value that they are giving to their customer is the quality assurance, favorable price and the full range of stock supply and complete supply that suit to the market demand.

1.4 Methodology In preparing this report, a survey was conducted to some of the KP customers through email. This survey is to determine the satisfaction and expectation of the customers toward the customer values of the products and services provided by KP. On the other hand, one interview had been conducted with the entrepreneur of KP in order to determine whether they understand the customer values they had provided to the customers and how does it influence their business decision making.

1.5 Limitation The major limitation of this research is that some information given is limited due to sensitivity issues. Other than that, entrepreneur has limited time for the interviewer to perform his study.

2.0 Value Chain of the products/services

Chopra and Meindl (2007) claimed that the value chain emphasized the close relationship between the functional strategies within a company. This means that company strategies created should fit in and supporting each other strategies within the company in order to success in value chain activities. Porter (1985) had came out a value chain concept which consist of 5 primary activities and 4 support activities to best

Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur illustrate the strategy executed in an organisationin order to add value to the customers (Dess et. al., 2008; Breyfogie, 2010).

Figure 2: Porters Value Chain Management Source:http://www.smartersolutions.com/blog/forrestbreyfogle/2010/07/31/enhancementto-michael-porter%E2%80%99s-value-chain/ Besides that, Porter (1985) also introduced 5-Forces Model to analyse the strength and influences of rivalry among existing firm, threat of new entrants, threat of substitute, bargaining power supplier and bargaining power of buyer to a particular industry in order to know a company position in that industry and to forecast future strategy plan to offer competitive advantages (Fred, 2007; Hitt, 2001; Hitt et. al., 2009).

Figure 3: Porters 5-Forces Model Source: http://www.mindtools.com/pages/article/newTMC_08.htm

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur Although an organisation had came out different strategies for different activities in order to add value to the customers but the customer will not concern about it and only concern about the result which is the benefits that they could gain after all these activities (Malaysian Institute of Management, 1999). The benefits that could gain through the adding value of company activities by the customers included cost, quality, response time, dependability of delivery, convenience, style or fashion, ethical issue, technology, flexibility and personalization.

2.1 Cost Cost can be simply explained as the value that spent in order to obtain something and which can be divided into company view and customer view. In company view, cost is amount that spent to produce a product or to perform a service while in customer view, cost can be called as price that they need to pay to purchase a product or service (Economic, 2011). Other than that, Goetsch and Davis (2006) also claimed that cost or price of a same characteristic product or service is the characteristic that most easy to be compare by the customers. Besides that, according to Reid and Sanders (2010), cost also one of the important elements in competitive priorities among organization in same industry. According to the above authors, it can be concluded that cost is an important value that not only will influence the purchase decision of customer but also the operating strategies of an organization. This is because lowering the cost not only creating value and give benefits to the customers but also will reduce an organization cost of production which will lead to maximize the profitability. In term to reduce the product cost for KP and their customers, KP had selected few suppliers that provide a more favorable price that they had experienced and sell them with lower price compare to the market price. In the other hand, customer will always demand for lower price from KP although they had provided their goods with low price.

Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur 2.2 Quality Quality is word that able to name its attribute but is hardly to be defined and if want to precisely create a definition for quality, yet the language is limited (Straker, 2011). Hanson (2011) also defined that quality is the overall value that someone might gain from product or service that they had purchased. Other than that, Goetsch and Davis (2006) also defined quality as a dynamic state associated with products, services, people, processes, and environments that meet or exceed expectations. On the other hand, Sebastianelli and Tamimi (2002) claimed that quality had different definition in different dimension which included the transcendent approach, product-based approach, user-based approach, manufacturing-based approach and value-based approach. According to the above authors, it can be concluded that quality is a value that cannot be clearly define as different people have different view point, opinion and expectation toward quality on defining a same product or service. 2.2.1 Total Quality The approach that uses by organization nowadays in order to control the quality of their products or services is the total quality approach. Choppin (1994) defined total quality approach as making the provision of quality as priority in order to meet the customers expectation and become a self-improving organization which everyone in the organization take responsibility on improving their own work. Goetsch and Davis (2006) also claimed that total quality approach focus on customer focus, obsession with quality, use of scientific approach on decision making and problem solving, long-term commitment, teamwork, employee involvement and empowerment, continual process improvement, bottom-up education training, freedom through control and unity of purpose that supporting the organization strategy. Other than that, Evans and Lindsay (1999) also claimed that there are three principles of total quality which included focus on customer, participation and teamwork and continuous improvement and learning. This also can be explained as to maintain and

Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur improve the quality of a product or service by using the total quality approach, other process that involve in producing the product or performing a service needed to be improve as well. 2.2.2 Six Sigma Six Sigma is another important approach that used by organization nowadays in quality management to improve the business processes. Six Sigma is developed by Motorola to improve the performance of processes to reach the defect rate 3.4 per million or less (ISixSigma, 2011; McCarty & Fisher, 2007; Wiele et. al., 2010). Six Sigma not only can be used in improving the production process but also available to use in other department process such as account and finance, operation, marketing and other (Reid & Sanders, 2010) According to Reid and Sanders (2010), the people involved in the Six Sigma are given martial arts titles to represent their skills level. The top rank of the title is champion which responsible for the overseeing the whole process and provide direction to the lower rank people. The second and third rank is master black belts and black belts which are those who have extensive experience and responsible to carry out implementation of the Six Sigma process. The fourth rank is the green belts which is the individual who have sufficient experience and responsible to serve on team or on small projects. Reid and Sanders (2010) also stated that Six Sigma approach is organized around a five-step plan known as DMAIC. The Six Sigma DMAIC process is an improvement system for those processes which are falling below specification and looking for incremental improvement (ISixSigma, 2011). DMAIC stand for define the quality of measure process, measure the current performance of the process, analyze the process to identify the root cause of the quality problem, improve the process by eliminating the root cause of the problem and control the process to ensure the improvements continue All the steps in Six Sigma help an organization measure their current performance and identify the main causes of the problem occurs (Reid & Sanders, 2010).

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur KP only adopt total quality management because they did not produce its own product so in order to add value to customer on the quality of product, KP had to choose from the suppliers that are able to provide more reliable product to their customers. Other than that, KP only promoted and hired those who had experienced on spare parts as salesman in order to provide better quality services. In the other hand, some of the customers think that the product quality provided by KP is only moderate but still acceptable.

2.3 Response Time Response time can be defined as the time gap between the request from a customer and the instant response received by at the application (RPM, 2004). Colantonio (2010) in the other hand also defined response time as the measurement that measure how long do the request take for a response return from it application. Other than that, according to Heizer and Render (2008), response time is a strategy that provide by company in order to provide a quick response to their customers. Based on the authors above, it can be concluded that response time is an important value for company in order to provide competitive advantage to their customers as customer would not choose to wait for a long period to receive the goods or services they asked for (Fitzsimmons & Fitzsimmons, 2004). KP able to provide quick response to the customers questions on the product price and features and also answering the phone call but according to the survey done to the customers of KP, some of them giving bad feedback on the response time when they want to retrieve goods from the shop.

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur 2.4 Dependability of delivery Slack had defined delivery dependability as keeping the delivery promises (Cooper, 2011). Simon (2011) also defined dependability of delivery as the guarantee to deliver an goods or services to the customer on the time and date that is promised. This means that dependability of delivery is to deliver goods or services to the customer on time or date that is promised. (Sarmiento et. al., 2007) Based on the authors above, it can be concluded that dependability of delivery is important value for organization to run it operation and keeping their customers as organization needed the accurate delivery from their suppliers to perform their business operations and deliver their products or services to their customers on right time and in the right quantities to prove they are reliable. According to the survey to customer, they are satisfied that KP can always perform well in delivery the right product and in the right quantities to their customers. In order to add value to the customers, KP pack their product in good condition to avoid fragile and delivery goods by themselves to the local customers and appointed for transport or carriage services company to deliver goods to the outstation customers.

2.5 Convenience Convenience can be categorize into few category which included the geographical area of business, way of transaction, varieties of products and services provided and other convenience service provide by the business such as delivery and after sales services (Fitch, 2004). Convenience is one of the values created by organization in order to provide competitive advantage. The benefits that can be gain by organization to offer convenience to their customers included time saving, cost reducing, increase in profit and others (Chen et. al., 2011). In the other hand, Chen et. al. (2007) also stated that the

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur inconvenience service provide by a business will affect the customer satisfaction and the customer behavior when purchase products or services. Convenience not only provides benefits to the customers but also considered as one of the benefits that can gain by a business to retain their profitable customers if they are doing well. KP add value with convenience to their customers by locate their shop at easily accessible place and giving credit term for their customer bought in large quantities and also giving grace period after end of the payment period. In the other hand, the customers feel neutral to the credit period given by KP as the customers always hope for a longer period to pay their debt and using the money to expand their business.

2.6 Style and fashion Style and fashion as a value here mean by the product and service design and the packaging of the product. The designation of a product or service is to satisfy their customers by meeting their needs and expectation will always include the term creativity which mean by the essential idea in creating or designing a product or service (Slack et. al., 2001) Heizer and Render (2008) also claimed that style and fashion which is the design of the product is one of the elements that compete between the organization in the same industry and the one who can differentiate themselves from others will gain the competitive advantages. In other words this means that which product or service able to meet the customer expectation will gain the opportunity to increase their market shares and retain the profitable customers. KP did not put much effort on the value style and fashion as it is not important in the automobile spare parts industry. In the other hand, the customers of KP also rated style and fashion is not an important value compare to others.

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur 2.7 Ethical issue Ethical issues is the value that must be considered by all the business to take care the welfare of their employees, customers, government and other parties that related to the business (Crane & Matten, 2007). According to Mintz (2010) ethics can be simply defined as the right and wrong action. This means that ethics can be explained as the right or wrong decision made by an individual in an incident. Heizer and Render (2008) stated that it is important to be ethics in controlling the quality by delivering healthy, safe, and quality product and service to the customer. Crane and Matten (2007) also claimed that in order to become an ethical organization, the organization should perform well in the Corporate Social Responsibilities or in short CSR. CSR can be defined as the responsibilities that should be taken by the business to take care of the whole society to maintain the reputation of the business and to act as one of the promotion strategy (Boatright, 2011). According to the survey, the customers agreed that KP is taking good care to their employees as well as customers. According to the author observation in the KP office, there are lot charity certificates given by other associations to KP to thanks their help in donation.

2.8 Technology Technology can be defined as both the artifacts that created by human such as machines and tools and the methods that used to create those artifacts (Anissimove, 2011). Heizer and Rander (2008) also stated that technology is one of the important value that used by organization in the manufacturing process and also in the service sector. Slack et. al. (2001) claimed that technology is one of the challenges faced by all the operation managers as technology is rapidly changing from time to time and this had made difficulties to the managers to predict and arrange the operation management

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur activities. In the other hand, the benefit that could gain by the customers from the value technology is that, they could get the product or service more cheaper, convenient and simpler as the technology improve will improve the performance of the product and service as well (Slack et. al., 2001). KP had computerized their customers database and makes it easily to trace with invoice and receivable systems. Other than that, KP also set up a webpage in order to receive comment and feedback from their customers toward their satisfactions in order for KP to improve.

2.9 Flexibility Heizer and Rander (2008) had defined flexibility as one of the elements that added value to the customers by the ability to respond with little penalty in time, cost or customer value. Slack et. al. (2001) also stated that flexibility is the competitive advantage that having ability to cope with the unexpected circumstance or to give customer treatment. In business operation, flexibility can be use in producing new or modified product and service, producing wide range or mix of product and service, changing the output of product and service over time and changing the timing of delivering product or service (Slack et. al., 2011). This means that customer could get advantage by having what they are expected and wanted if the business provide the flexibility value such as sufficient number of stock, providing wide range of services and others to their customers. In term of flexibility, KP always checks up on their stock in order to make sure it is always enough to fulfill market demand. In the other hand, the customers also agreed that KP able to provide any goods in any quantity to them.

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur 2.10 Personalisation Personalisation or customization is mean to adding value to the customers by producing different product or performing different services for different customers (Slack et. al., 2001). Although personalization could add value to the customer but produce different things for different customers will lead to increase in production cost as personalization could not produce in large quantity due to different requirement from the customers (Slack et. al., 2001). In the other hand, personalisation is an important value that wanted by customer as it will fulfill the customer satisfaction and made them happier if they could receive special product or service or treating them special by the business. According to the survey, sometimes KP will give personalization to some of their customers with giving lower price compare to the price that had been fixed. This value can be considered as moderate important that not much expect by the customers as automobile spare parts business does not have need specialize from each other besides than cost.

3.0 Survey Result

Questionnaire had been sent out by using email to 25 respondent using Kia Power customer database.

3.1 Demographic data Out of the 25 companies, 12% companies had 1-3 years experience, 32% companies had 4-6 years experience, 44% companies had 7-9 years experience 4% companies had 9-12 years experience and 8% companies had more than 12 years experience. Other than that, 20% companies had 5-10 workers, 44% companies had 11-15 workers, 24% companies

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur had 16-20 workers and 8% companies had 21-25 workers. 12% of the companies are registered under partnership and other 88% companies registered under private limited company.

3.2 Customer Satisfaction Different respondent had given different view on their satisfaction toward the customer value provided by KP during the survey and following graph show the overall of all the 25 respondents satisfaction level toward all the values.
25 20 15 10 5 0 Strongly Satisfied Somewhat Satisfied Neutral Somewhat Dissatisfied Strongly Dissatisfied

Figure 5: Satisfaction level toward customer value Source: Own source The above result shows that more than 80% customers of KP neutral and above satisfied to all the customer values provided by them and only some of the customers show dissatisfaction on some values. According to some of the open ended question answered by customers, although KP can give quick response in ordering with phone call but they

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur could not give immediate response to those customers came and collect their goods due to busy on serving other customer and handling the unstoppable phone calling from customers and this had made inconvenience to them.

3.3 Customer Expectation Other than that, this survey also examines the expectation of customers toward the customer values provided by KP. The result shows that most of the customers more concern on the value cost, quality, response time, dependability, convenience, ethical issues, technology and flexibility and not much concern on style or fashions and personalization from KP. This is because style or fashions and personalization are not much important in the automobile spare parts industry compares to other values.

4.0 Recommendation
The recommendation given by the some of the customers to KP is that to set up a customer service counter that able to give quick response to those walk in customers to collect their ordered goods. Other than that, in order to add value to the customers the researcher suggested that KP should differentiate themselves more from their competitors to gain the competitive advantages as to provide superior customer value (Armstrong & Kotler, 2009). The example of differentiation can be their company image, services provided, line of product and others.

5.0 Conclusion
For the conclusion, customer value is an important element that must be concern by all the organization as customer value will give impact to each of the organization operation activities and strategy. This is because customer is reason for any organization to appear
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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur but not in the opposite. Furthermore, if the customers are not being concern by any organization, they will switch their loyalty to those organizations that are more concern to their customer. So the organization must able satisfied their customer value in order to retain customers and to attract more valuable customers. (3941 words)

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur

6.0 Glossaries
Ability an individuals capacity to perform the various tasks in a job Competitive advantages the ability of a firm to win consistently over the long term in a competitive situation Continual process improvement incremental and break-through improvements in the way an organization does business; also known as business process reengineering Creativity the ability to produce novel and useful ideas Differentiation the extent to which tasks are divided into subtasks and performed by individuals with specialized skills Management the process of assembling and using sets of resources in a goal-directed manner to accomplish task in an organizational setting Primary activities activities that are directly involved in the creation of a product or service and getting it into the hands of the customer, and keeping it there Secondary activities also called as support activities that facilitate the creation of a product or service and its transfer to the customer Superior value products and services that produce value for customers that is superior to the value provided by competitors. Total Quality Management a management approach and philosophy that involves a commitment from all levels of employees to continually strive to make improvements and satisfy customer Value chain the set of key activities that directly produce or support the production of firms products and service offered to customers Value fundamentally important behaviors, activities and outcomes

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur

7.0 References
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http://www.wisegeek.com/what-is-technology.htm [Accessed on: 22 September 2011] Armstrong, G. & Kotler, P., 2009, Marketing: an introduction, 9th ed. New Jersey: Pearson Education Boatright. J, 2009, Ethics And The Conduct Of Business, 6th ed. United State of America: Pearson Education Breyfogie, F., 2010, Porters Value Chain, [Online] Available at:

http://www.smartersolutions.com/blog/forrestbreyfogle/2010/07/31/enhancement-tomichael-porter%E2%80%99s-value-chain/ [Accessed on: 15 September 2011] Chen, M.C. et. al. 2011. Understanding the relationship between service convenience and customer satisfaction in home delivery by Kano model. Asia Pacific Journal of Marketing and Logistics, [Online]. Emerald database. Vol.23, No.3, pp 386-410. Colantonio, J. 2010, Response Time, [Online] Available at:

http://www.joecolantonio.com/2011/08/17/performance-testing-basic%E2%80%99s%E2%80%93-what-is-response-time [Accessed on: 19 September 2011] Choppin, J. 1994. This total quality business. Management Service Quality, [Online]. Emerald database. Vol.4, No.6, pp 5-7. Chopra, S. & Meindl, P., 2007, Supply Chain Management: strategy, planning & operations, 3rd ed. New Jersey: Pearson Education Christopher, M., 2005, Logistics and Supply Chain Management: creating value-adding networks. Great Britain: Pearson Education

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur Cooper, C.L., 2011, Dependability of Delivery, [Online] Available at:

http://www.blackwellreference.com/public/tocnode?id=g9780631233176_chunk_g97814 051109698_ss1-1#citation [Accessed on: 20 September 2011] Crane A. & Matten D., 2007, Business Ethics, 2nd ed, New York: Oxford University Press Craven, D.W. & Piercy, N.F., 2006, Strategic Marketing, 8th ed. Singapore: McGrawHill Education Dess, G. G. et. al., 2008, Stragetegic Management: creating competitive advantages, 4th ed. New York: McGraw- Hill Diloia, S., 2010, Phase of Six Sigma, [Online] available at: http://www.insyteconsulting.com/Resources/Articles/UnderstandingthePhasesofSixSigma [Accessed on: 15 September 2011] Doyle, P., 2008, Value-Based Marketing: Marketing strategies for corporate growth and shareholder value, 2nd ed. Chichester: John Wiley & Sons, Ltd E-economic, 2011, What is cost?, [Online] Available at: http://www.e-

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur Flickr, 2011, Operation Management and Strategy, [Online] Available at:

http://www.flickr.com/photos/drawpack/5514849176/sizes/m/in/photostream/ [Accessed on: 15 September 2011] Fred R. David. 2007. Strategic Management concept & cases. 11th ed. New Jersey:Pearson Education. Goetsch D.L., Davis S.B., 2006, Quality Management: Introduction to Total Quality Management for Production, 5th ed, Processing, and Services, United States of America: Pearson Prentice Hall Hill, C.W.L. et al., 2007, Strategic Management: an integrated approach, 2nd ed. Queensland: John Wiley & Sons Australia Heizer, J. & Render, B., 2008, Operation Management, 9th ed. United State of America: Pearson Education Hitt. M, 2001. Strategic Management (competitiveness & globalization). 4th ed. Ohio: South- Western College Hitt. M et. al. 2009, Management, 2nd ed. New Jersey: Pearson Education ISixSigma, 2011, What is Six Sigma? [Online] Available at:

http://www.isixsigma.com/index.php?option=com_k2&view=item&id=1463:what-is-sixsigma?&Itemid=155 [Accessed on: 15 September 2011] Kia Power, 2011, Kia Power Auto Part, [Online] Available at:

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur MindTools, 2011, Porters Five Forces Model, [Online] Available at:

http://www.mindtools.com/pages/article/newTMC_08.htm [Assessed on 15 September 2011] Mintz, S., 2010, What is Ethics?, [Online] Available at:

http://www.ethicssage.com/2010/12/what-is-ethics.html [Accessed on: 22 September 2011] McCarty, T.D. & Fisher, S.A. 2007. Six sigma: it is not what you think. Journal of Corporate Real Estate, [Online]. Emerald database. Vol.9, No.3, pp 187-196. Reid, R.D. & Sanders, N.R., 2010, Operations Management: An integrated approach, 4th ed. Hoboken: John Wiley & Sons Pte Ltd RPM, 2004, Response Time, [Online] Available at:

http://loadtest.com.au/Terminology/ResponseTime.htm [Accessed on: 19 September 2011] Sarmiento, R. et. al. 2007. Delivery reliability, manufacturing capabilities and new models of manufacturing efficiency. International Journal of Retail & Distribution Management, [Online]. Emerald database. Vol.32, No.2, pp 100-108. Sebastianelli, R. & Tamimi, N. 2002. How product quality dimensions relate to defining quality . International Journal of Quality & Reliability Management, [Online]. Emerald database. Vol.19, No.4, pp 442-453. Simon, 2011, Dependability of delivery, [Online] Available at:

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur Straker, D., 2011, What is quality?, [Online] Available on: at: 15

http://syque.com/articles/what_is_quality/what_is_quality_1.htm September 2011]

[Accessed

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur

8.0 Bibliography
Baird, K. et. al. 2011, The relationships between organization culture, total quality management practices and operation performance. International Journal of Operation & Production Management, [Online] Emerald Database. Vol.31, No.7, pp 789-814. Cateora, P.R. et. al. 2010, International Marketing, 14th ed. New York: McGraw-Hill Kumar, M. et. al. 2008, Common myths of Six Sigma demystified. International Journal of Quality & Reliability Management, [Online] Emerald Database. Vol.25, No.8, pp 875895. Prajogo, D.I. et. al. 2008, Impact of value chain activities on quality and innovation. International Journal of Operations & Production Management, [Online] Emerald Database. Vol.28, No.7, pp 615-635.

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur

Appendixes

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Appendix 4 Six Sigma phases- DMAIC

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur Appendix 5 Demographic Data Independent variables Company experience 1.3 4-6 7-9 9-12 >12 Number of worker 5-10 11-15 16-20 21-25 >25 Format of business Sole trader Partnership Private Limited Public Limited Frequency 3 8 11 1 2 5 12 6 2 0 0 3 22 0 % 12 32 44 4 8 20 44 24 8 0 0 12 88 0

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur Appendix 6 Interview question and answer 1. Do you provide customer values in sales and services? Yes, sure. 2. What is the value of product and services to your customers? The value of product and services that the customer purchases the goods in quality assurance, more favorable price compare among the market and have a full range of stock supply and complete supplies to cater market demand. 3. How do you add value to your customer in term of cost? We add value to our customer apart from the favorable price and quality assurance, of course the prompt supply also one of the factor included. 4. Can you describe your delivery process? How does it add value to customers? For the nearby and local supply, we deliver by motor and van. For the outstation supplies, we will appoint the transport services company and courier servicess company to insure satisfaction delivery. 5. How do you manage your staff in product packaging and providing information to the customer in order to fulfill customer value? For product packaging, we pack the product in good order and condition to avoid fragile product from broken problem. Necessary sticker will also put on it to aware the customers 6. Do you give flexibility when giving credit sales to your customers? The credit terms given will depend on the monthly sales amount and goodwill in payment of account. 7. How would you know whether your customers are satisfied or not upon purchased? Through our experience, we offer good price in the market so the customer will give feedback and introduce more customer to us.

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur 8. Do the customer values give any impact on your sales activities? Of course. This will promote better business relations due to the overwhelming support by our value customers. 9. How would you give convenience to your customers in payment period and method? We do given grace period for our credit terms given after the due date of accounts payment. 10. How did u manage your customer database? The customer database all could be traceable in our computerised invoicing and account receivable system. 11. How did you manage your stock in order to make sure it is enough to supply to your customers? This must be always checking the availability of stock balances and place the order 1 to 3 months before the sales. 12. Is there any requirement for your staff to provide sales based services? We require salesman had experience on spare parts before they become salesman. 13. Do you have customer hotline? We do not have a customer hotline for the sales service. 14. How is the process when you purchase your product from your supplier in order to fulfill customer value? We will search for the better quality and more favorable price among few suppliers which we have ever experience before. Which parts the customers will more reliable on which sources of supplies must very familiar on all of products source. 15. Any opinion on the weakness or weakness of your business operating activities? If yes, is there any improvement needed to be done in those area(s)? The improvement for the business operation is expected more enquiries feedback from our website and advertisement in infopages.

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur Appendix 7 Interview Question (clean sheet) 1. Do you provide customer values in sales and services? ______________________________________________________________________ 2. What is the value of product and services to your customers? ________________________________________________________________________ ________________________________________________________________________ 3. How do you add value to your customer in term of cost? ________________________________________________________________________ ________________________________________________________________________ 4. Can you describe your delivery process? How does it add value to customers? ________________________________________________________________________ ________________________________________________________________________ 5. How do you manage your staff in product packaging and providing information to the customer in order to fulfill customer value? ________________________________________________________________________ ________________________________________________________________________ 6. Do you give flexibility when giving credit sales to your customers? ________________________________________________________________________ ________________________________________________________________________ 7. How would you know whether your customers are satisfied or not upon purchased? ________________________________________________________________________ ________________________________________________________________________ 8. Do the customer values give any impact on your sales activities? ________________________________________________________________________ ________________________________________________________________________

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur 9. How would you give convenience to your customers in payment period and method? ________________________________________________________________________ ________________________________________________________________________ 10. How did u manage your customer database? ________________________________________________________________________ ________________________________________________________________________ 11. How did you manage your stock in order to make sure it is enough to supply to your customers? ________________________________________________________________________ ________________________________________________________________________ 12. Is there any requirement for your staff to provide sales based services? ________________________________________________________________________ ________________________________________________________________________ 13. Do you have customer hotline? ________________________________________________________________________ 14. How is the process when you purchase your product from your supplier in order to fulfill customer value? ________________________________________________________________________ ________________________________________________________________________ 15. Any opinion on the weakness or weakness of your business operating activities? If yes, is there any improvement needed to be done in those area(s)? ________________________________________________________________________ ________________________________________________________________________

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur Appendix 8
Questionnaire: Kia Power Part A- Demographic 1. How long does the company exist? 1-3 4-6 >12 9-12 7-9

2. Number of workers 5-10 16-20 >25 11-15 21-25

3. Races of workers (%): Malay

Chinese

India

Others

4. Format of business: Sole trader Private Limited 5. Annual Revenue (RM 000): 300-500 701-900 >1101 501-700 901-1100 Partnership Public Limited

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur
Part B- Customer satisfaction Please tick on the box prepared for each following question: Question Strongly Disagree 1. Product selling is at reasonable price. 2. Quality of product is superior. 3. Able to provide information with speed and accurate. 4. Delivering always the right product and in right quantity. 5. The location of shop is easily accessible. 6. The receivable collection period is long. 7. The packing of product is stylist. 8. The company is looking after the welfare of employees and customers. 9. Operator train to pick up call promptly. (within 3 rings) 10. Able to provide any product and in any Somewhat Disagree Neutral Somewhat Agree Strongly Agree

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur
quantity to the customers 11. Specialising you from other customer in term of prices or services.

Please tick on the box prepared to rate the satisfaction levels on each value. Customer Value Strongly Somewhat Neutral Somewhat Dissatisfied Strongly Dissatisfied

Satisfied Satisfied 12. Cost 13. Quality 14. Response time 15. Dependability of delivery 16. Convenience 17. Style or fashion 18. Ethical issue 19. Technology 20. Flexibility 21. Personalisation

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Low Kee Seng 000687621 Value Chain Management Segi College Kuala Lumpur
Part C- Customer Expectation Please rate the following question from scale 1-9 which 1 is less important and 9 is most important. 22. Cost

23. Quality

24. Response time

25. Dependability of delivery

26. Convenience

27. Style or fashion

28. Ethical issue

29. Technology

30. Flexibility

31. Personalisation

Part D- Open-ended Question 1. What is your overall opinion on Kia Power? Justify your answer. _________________________________________________________ 2. Can you give any idea or suggestion on how Kia Power can be improved? _________________________________________________________

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