Analysis of Value-Creating and Supporting Component of the Value Chain in the Production Process

Milan Talíř, Jarmila Straková, Jan Váchal and Jaroslav Kollmann

European Journal of Interdisciplinary Studies, 2023, issue 02

Abstract: Normal 0 21 false false false EN-GB X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; text-align:center; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Calibri",sans-serif; mso-bidi-font-family:"Times New Roman"; mso-ansi-language:EN-US; mso-fareast-language:EN-US;} This research focuses on the application of the Process Value Added (PVA) method in the environment of custom piece production at STS Prachatice a.s. The main objective was to identify the most profitable and most loss-making processes, to evaluate the value added of individual production operations, to assess the potential for outsourcing certain processes, and to analyse the profitability of specific orders. The study uses a selection of 30 atypical orders from 2022, obtaining data on selling prices, production hours and costs associated with production and overhead. The analysis shows that manufacturing processes add the most value, while inspection processes are less profitable. Processes suitable for outsourcing were identified, especially when in-house capacity is not used. It was also found that the most profitable orders are those that combine high product uniqueness with efficient use of materials and production hours. The PVA methodology allowed to quantify the added value in the context of time and cost parameters and revealed that contracts with high time pool and unit costs have the most significant added value. PVA indices were established to better reflect the results achieved. The research findings have practical implications for the organization and efficiency of the production process at STS Prachatice, contribute to the development of business policy and procurement activities, and serve as innovative material for academic purposes. The study demonstrates that the PVA method is an effective tool for analysing and optimising business processes, enabling companies to better understand and manage process value-added in order to increase profitability and competitiveness. The implementation of this method in practice has shown concrete economic benefits and provided valuable information for further business policy and procurement solutions.

Keywords: added value; analysis; product portfolio; PVA; production processes (search for similar items in EconPapers)
JEL-codes: D61 M20 O14 (search for similar items in EconPapers)
Date: 2023
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