Application of the customer value concept for measurement and value chain processes management

Abstract

The essence of the customer value concept is the product (object). These objects are the holders of the functions that satisfy customer needs as well as experience in co-creation process with customers. Searching for unique value with the customer is limited by claims on resources (total cost) necessary to achieve the desired degree of satisfying (degree of saturation) customer needs. Firms' value-chain is understood as a set of value adding functions that constitute the specific processes (activities) needed to realize the production of certain products. Every business entity transforms input factors into final products or services, using its value creation functions that are the essential parts of value chain. Profitable enterprise must have lower costs than competitors or must produce in such a way that leads to firms' differentiation from competitors. This means that it must have specific strengths in one or more value creation functions. The aim of the firm is to make such products that meet the needs of customers at the highest possible level and thereby maximize their profits. This entails the need of firm to cooperate with its customers in each process of manufacturing the final product and thus positively influencing (maximizing) the final effect in meeting customers' needs. In connection with the EFQM excellence model and its possibilities for experience rate measurement in the value co-creation, we have to stress the Results, approach, deployment, assessment and review methodology (RADAR). The paper focuses on the ability to apply the main ideas of the customer value concept for measurement and value chain management. Detail focus is addressed to the issue of identification, definition, evaluation and management of unique value co-creation with customers throughout the all value chain processes. The goal of this paper is to propose a specific application of the customer value concept for measurement and value chain management.