6.

0 Company’s business value chain

A value chain is a set of activities that a firm operating in a specific industry performs
in order to deliver a valuable product or service for the market. The concept comes through
business management. A value chain is a series of activities or processes which aims at creating
and adding value to an article (product) at every step during the production process. Businesses
aim at enhancing the margins and thus work to change input into an output which is of a greater
value than what it was at the time of entering the process (the difference between the two being
the company’s profit margin). Thus the logic behind it is simple; the more value a company
creates, the more profitable it is. When more value is created, the same is passed on to the
customers and thus further helps in consolidating a competitive edge.

The business management concept of the value chain was introduced and described by
Michael Porter in his popular book “Competitive Advantage: Creating and Sustaining Superior
Performance” in 1985. Porter described a chain of activities common to all businesses, and he
divided them into primary and support activities, as shown below.

Delico Frozen Company activities are divided into primary activities and secondary
activities. The primary activities are directly related to the creation of a good or service while
the support activities help in enhancing the efficiency and work to obtain a competitive
advantage among peers. So, their company business journey began with an online order and
they also provide delivery services to the customers.

6.1 Primary activities

 Inbound logistic
 The inbound logistic for Delico Frozen Company refers, the members selecting their
quality substances of meat, bread and fries by the company that their appointed frozen food
from other industry food in Malaysia. In their business, they get halal meat from Harvest
Frozen Food and Lucky Frozen Sdn. Bhd., These products are transported to them after the
meats already cut, cleaned and after that the meats will freeze in freezer. For french fries
onion, the members buy potatoes and onions from wholesale market in Alor Setar. So, they
do their own to in making french fries onions. Lastly, they also get the burger bun from
Afreen Damia Bakeri Station for their chicken burger product.

 Operations

Delico Frozen Company operates in Alor Setar, Kedah. The members use electronic
gadgets and computer operation that consists of selling product using online website and
social media to reduce the costs of operation.

 Outbound logistics

There is a very little or no presence of intermediaries in product selling. Majority of the

products are sold in their own or licensed company. Besides that, they delivery the products
by a transportation which is by van.

 Marketing and sales

Frozen Food Company invests in superior quality products and high level of customer
services than aggressive marketing. The price offered by entrepreneurs also not expensive
and affordable for people to buy. The members have launched their product to all residents
in Alor Setar by making promotions by buying the two types of frozen food and the people
can get one french fries onion without any charge. So, if the customers are from outside of
Alor Setar, they charge RM5 but, it’s also depends on how far the address that they have to
send.

 Service

The members also aims at building customer loyalty through high level of customer service.
They have to delivery the products within 1-3days. If the products not delivery within than
3 days, the entrepreneurs will inform their customers in advance if there is any
inconvenience from their party. In addition, they provide the finest quality meat and related
products, and by providing each customer a unique Frozen Foods experience.
 6.2 Support activities

 Infrastructure

This include all departments like management, finance, legal, etc which are required to keep
the industry’s operational. Delico Frozen Company are well designed and pleasing company
are complemented with fast delivery by van and provided good services to customer by the
dedicated team of employees in blue shirt.

 Human resource management

The members and employees are committed workforce is considered a key attribute in the
company’s success and growth over the years. Delico Frozen Company’s employees are
motivated through generous benefits and incentives. The company is known for taking care of
its workforce and this is perhaps the reason for a low turnover of employees in their company,
which indicates great human resource management. There are many training programs
conducted from outsider for their employees in a setting of a work culture which keeps its staff
motivated and efficient.

 Technology development

Delico Frozen Company is known for use of technology for frozen food storage. Besides that,
the members also develop a website and social media like Facebook and Instagram as a
streamline supply chain. It can helps customer to provide suggestion, gather idea, and enhance
informing sharing among suppliers. Besides that, by using the internet technology can improve
the efficiency and reliability of supply chain and makes business less vulnerable to unforeseen
thing.

 Procurement

This involves procuring the raw material for the final product. The members go to Kuala
Lumpur by themselves for the procurement of high grade raw material to bring the finest meat
to its customers. They also establish strategic relationship and partnership with a supplier which
is built up after reconnaissance and communication about the company standards. High quality
standards are maintained with direct involvement of the company right from the involvement
of the company right from the base level of selecting the finest raw material which is meat and
potatoes.
 In conclusion, the concept of value chain helps to understand and segregate the useful
(which help in gaining a completive edge) and wasteful activities (which hamper market lead)
accompanying each step during the product development process. It also explains that if value
is added during each step, the overall value of the product gets enhanced thus helping in
achieving greater profit margins.

7.0 The information system or IT tools that Delico Frozen Company wish to implement
in the value chain in order to achieve their business strategy

7.1 Information system

An information system is software that helps to organize and analyse data. This makes
it possible to answer question and solve problems relevant to the mission of Delico Frozen
Company. Many organization works with large amounts of data. Data are basic values or facts
and are organizes in a database. Many people think of data as synonymous with information.
However, information actually consists of data that has been organized to help answer
questions and to solve problems. An information system is defined as the software that helps
them to organize and analyse data. So, the purpose of an information system is to turn raw data
into useful information that can be used for decision-making in their company. However, there
are some elements that required in the overall industrial information system to ensure the
standard quality of Delico Frozen Company.

7.1.2 Types of information system in an industry business organization

Industry businesses must be concerned with producing quality goods or services and
also with turning mountains of data into actionable information. To contain costs and achieve
a competitive advantage, many industrial business consider information systems as they
formulate corporate, tactical and operational strategies. To best leverage data as an industry
asset, the industry must adopt an information strategy, which may require the implementation
of a variety of business information systems that process business transactions and empower
business to make more informed and faster decisions.

 Decision support systems

A decision-support system, or DSS, allowed members to use predefined or ad hoc reports to

support operations planning and problem-resolution decisions. With DSS, users find answers
to specific questions as a means to evaluate the possible impact of a decision before it is
implemented. The answers to queries may take the form of a data summary report, such as a
product revenue by quarter sales report. To conduct an analysis, they can use an interface –a
dashboard – to select a particular graphic representation of a key performance indicator that
measures the progress toward meeting a specific goal. For example, a manufacturing dashboard
might display a graphic representing the number of products manufactured on a particular line.

 Transaction processing system

A business processes transaction that result from day-to-day business operations, such
as creation of pay checks and purchase order, using a transaction system, or TPS. The TPS,
unlike a batch system, requires that users interact with system in real time to direct the system
to collect, store, retrieve and modify data. A users enters transaction data by means of a
terminal, and the system immediately stores the data in a database and produces any required
output. So, the customer can directly choose product from the website and make an online
payment transaction, so that, the order can automatically will update to Delico Frozen
Companys’ data.

 Customer relationship management systems

The members can use customer relationship systems to synchronize sales and marketing
efforts. CRM system accumulate and track customer activities, including purchasing trends,
product defects and customer inquiries. The capabilities of typically CRM information system
allows customer to interact with companies for service or product feedback and problem
resolutions. Businesses may also use CRM systems internally as a component of their
collaboration strategies. As such, CRM information systems allow business partners to interact
with each other as they develop ideas and products. Collaboration can occur in real time even
when they are in remote locations.

 Quality management system (QMS)

A quality management system (QMS) is a formalized system that documents processes,

procedures, and responsibilities for achieving quality policies and objectives. A QMS can helps
coordinate and direct to Delico Frozen Company activities to meet customer and regulatory
requirements and improve its effectiveness and efficiency on a continuous basis. Quality
management systems serve many purposes, including, improving processes, reducing waste,
lowering costs, facilitating and identifying training opportunities, engaging staff, and setting
organization-wide direction.

Establishing a quality management system helps their industrial run effectively. Before
establishing a quality management system, the organization must identify and mange various
connected, multi-functional processes to ensure customer satisfaction is always the target
achieved. There are many things to consider when establishing a QMS for their industrial
business of great importance is ensuring it is a strategic choice influenced by the varying
objectives, needs, and products and services provided. This structure is based largely on the
Plan-Do-Check-Act (PDCA) cycle and allows for continuous improvement to both the product
and the QMS. The basic steps to implementing a quality management system are design, build,
deploy, control, measure, review, and improve.

o Design and build

The design and build portions serve to develop the structure of a QMS, its processes,
and plans for implementation. Senior management must oversee this portion to ensure
the needs of the industrial business and the needs of its customers are giving force
behind the systems development.

o Deploy

Deployment is best served in a granular fashion via breaking each process down into
sub processes, and educating staff on documentation, education, training tools, and
metrics. Company intranets are increasingly being used to assist in the deployment of
quality management systems.

o Control and measure

Control and measurement are two areas of establishing a QMS that are largely
accomplished through routine, systematic audits of the quality management system.
The specific vary greatly from organization to organization depending on size, potential
risk, and environmental impact.

o Review and improve

Review and improvement deal with how the results of an audit are handled. The goals
are to determine the effectiveness and efficiency of each process toward its objectives,
 to communicate these findings to the employees, and to develop new best practices and
processes based on the data collected during the audit.

 Document management (DMS)

Document management, often referred to as Documents Management Systems (DMS),

is the use of a computer system and software to store, manage and track electronic documents
and electronic images of paper based information captured through the use of a document
scanner. Document management is how their organization stores, manages and tracks its
electronic documents. Document management is one of the precursor technologies to content
management, and not all that long ago was available solely on a stand-alone basis like its
imaging, workflow, archiving brethren. It provides some of the most basic functionally to
content management, imposing controls and managements capabilities onto otherwise “dumb”
documents. This makes it so that when the members have documents and need to use them, the
members are able to do so. Some of the key features that they have to include in document
managements is:

o Check-in/check-out and locking, to coordinate the simultaneous editing of a

document so one person’s changes do not overwrite another’s.
o Version control, so tabs can be kept on how the current document came to be,
and how it differs from the version that came before.
o Roll-back, to “activate” a prior version in case of an error or premature release.
o Audit trail, to permit the reconstruction of who did what to a document during
the course of its life in the systems.
REFERENCES

http://www.aiim.org/What-Is-Document-Imaging#

http://smallbusiness.chron.com/types-information-systems-business-organization-66974.html

http://smallbusiness.chron.com/types-information-systems-organization-43097.html

https://www.mindtools.com/pages/article/newSTR_66.htm

https://www.investopedia.com/articles/investing/103114/starbucks-example-value-chain-
model.asp

http://asq.org/learn-about-quality/quality-management-system/