SCM 1 Value Chain Porter
SCM 1 Value Chain Porter
SCM 1 Value Chain Porter
What is Strategy?
What is Value?
In manufacturing :
Take raw material (input)
do processing
Hand out the final product.
In Services :??????????
time,
knowledge,
equipment and
Systems (IT)
to create services of real value to the person being
served the customer
Definition
THE VALUE CHAIN IS A TOOL FOR SYSTEMATICALLY
EXAMINING THE ACTIVITIES OF A FIRM AND HOW THEY
INTERACT WITH ONE ANOTHER AND AFFECT EACH OTHERS
COST AND PERFORMANCE.
The Process of creating values for customers and indentifying
the sources of Creating those values.
The value chain analysis describes the activities the
organization performs and links them to the organizations
competitive position .
Value Chain-consists of the major activities that have
been added to product during its creation, development or
sale.
Primary Activies
Primary Activity
Inbound
logistics
Operations
Outbound
logistics
Marketing
and sales
Service
Secondary Activity
Procurement
This concerns how resources are acquired for a business (e.g. sourcing and
negotiating with materials suppliers)
Human
Resource
Management
Technology
Development
Infrastructure Concerned with a wide range of support systems and functions such as
finance, planning, quality control and general senior management
Competitive advantage
A competitive advantage may be achieved by
reconfiguring the value chain to provide lower
cost and better differentiation.
Cost advantage
Differentiation
Competitive Strategies
Medina Vs DFB
Direct activities:
Create value by themselves. (In dairy business
direct sales calls, advertising, Sales etc.)
Indirect activates:
To run direct activates smooth and efficient.
(Managing sales force and keeping customer Records).
Quality assurance:
To maintain the standard of direct &
Indirect activities. (Proof reading the
advertisement material, checking sales call performance).
Example
Ali is a software development manager for a software house. he and his team
handle short software enhancements for many clients. As part of a team
development day, he and his team use Value Chain Analysis to think about how
they can deliver excellent service to their clients.
During the Activity Analysis part of the session, they identify the following
activities that create value for clients:
Order taking
Enhancement specification
Scheduling
Software development
Program testing
Secondary testing
Delivery
Support
Ali also identifies the following non-client-facing activities as being important:
Recruitment: Choosing people who will work well with the team.
Training: Helping new team members become effective as quickly as possible, and
helping team members learn about new software, techniques and technologies as
they are developed.
Ali marks these out in a vertical value chain on his whiteboard (you can see the
first three client-facing activities shown in the "Step 1: Activity Analysis" box in
Figure 1 below):
www.support4learning.org.uk/education/key
_skills.htm
(a good all-round site for study skills advice and
information)
www.bized.ac.uk/ (a study support site for
business studies students)