Lets Understand the benefit of Value Chain
¢ Identifing value processes
¢ Finding areas for cost improvement
Primary activities of any product processes can be summarized as follows:
¢ Inbound
Logistics: Handling goods that are bought into the company, storing them and
making them available to operations as required.
¢ Operations: The
production process, in many cases a series of sub-activities that can be
represented on a detailed value chain analysis
¢ Outbound
logistics: Taking the products of the company, storing them if necessary and
distributing them to the customers in a timely manner.
¢ Marketing and
Sales: Finding out the requirements of the potential customers and letting them
know the product and services that can he offered.
¢ Services: Any
requirement for installation or advice before delivery and then after-sales
service once the transaction is completed.
To support these
primary functions there will be a company infrastructure that performs number
of support activities.
¢ Procurement: The function of
finding suppliers of the materials required as inputs to the operations of the
organization. Procurement is responsible for negotiating quality supplies at an
acceptable price and with reliable delivery.
¢ Technology
Development:
The organization needs to update the production process, train staff and to
manage innovation to ensure that its products and its over all range of goods
and services remain competitive.
¢ Human Resource
management:
The recruitment, training and personnel management of the people who work for
the organization.
¢ Firm
Infrastructure:
The over all management of the company including planning and accountancy
Inter-Organizational Value Chain
The value chain of a company is part of over all value chain.
The over all competitive advantage of an organization is not just dependent on
the quality and efficiency of the company and quality of products but also upon
the that of its suppliers and wholesalers and retailers it may use. The
analysis of overall supply chain is called the value system.
Different value chains can
be as follows:
1. Supplier Value chain
2. Firm Value chain
3. Channel Value chain
4. Buyer Value chain
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