...2 Value Chain Management The theoretical background is defined around the central term value chain. Chapter 2 presents research concepts to manage the value chain structured by their area of specialization either on supply, demand or values. Secondly, within an integrated framework, the results of the specialized disciplines are combined with the objective to manage sales and supply by values and volume. Value chain management is defined and positioned with respect to other authors’ definitions. A value chain management framework is established with a strategy process on the strategic level, a planning process on the tactical level and operations processes on the operational level. These management levels are detailed and interfaces between the levels are defined. Since the considered problem is a planning problem, the framework serves for structuring planning requirements as well as the model development in the following chapters. 2.1 Value Chain Value chain as a term was created by Porter (1985), pp. 33-40. A value chain “disaggregates a firm into its strategically relevant activities in order to understand the behavior of costs and the existing and potential sources of differentiation”. Porter’s value chain consists of a “set of activities that are performed to design, produce and market, deliver and support its product”. Porter distinguishes between • primary activities: inbound logistics, operations, outbound logistics, marketing and sales, service in the core value...
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...Value chain analysis Value chain From Wikipedia, the free encyclopedia Jump to: navigation, search Popular Visualization The value chain, also known as value chain analysis, is a concept from business management that was first described and popularized by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.[1] Contents[hide] * 1 Concept * 1.1 Activities * 2 Significance * 3 SCOR * 4 Value Reference Model * 5 References * 6 See also | [edit] Concept A value chain is a chain of activities for a firm operating in a specific industry. The business unit is the appropriate level for construction of a value chain, not the divisional level or corporate level. Products pass through all activities of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of added values of all activities. It is important not to mix the concept of the value chain with the costs occurring throughout the activities. A diamond cutter can be used as an example of the difference. The cutting activity may have a low cost, but the activity adds much of the value to the end product, since a rough diamond is significantly less valuable than a cut diamond. Typically, the described value chain and the documentation of processes, assessment and auditing of adherence to the process routines are at the core of the quality certification of the business...
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...published in 1967, introduced the concept that companies must be customer-and-market driven. But there was little mention of what have now become funda- mental topics such as segmentation, targeting, and positioning. Concepts such as brand equity, customer value analysis, database marketing, e-commerce, value networks, hybrid channels, supply chain management. Marketing Management is the leading marketing text because its content and organization consistently reflect changes in marketing theory and practice. The very first edition of Marketing Management, published in 1967, introduced the concept that companies must be customer-and-market driven. But there was little mention of what have now become funda- mental topics such as segmentation, targeting, and positioning. Concepts such as brand equity, customer value analysis, database marketing, e-commerce, value networks, hybrid channels, supply chain management. Marketing Management is the leading marketing text because its content and organization consistently reflect changes in marketing theory and practice. The very first edition of Marketing Management, published in 1967, introduced the concept that companies must be customer-and-market driven. But there was little mention of what have now become funda- mental topics such as segmentation, targeting, and positioning. Concepts such as brand equity, customer value analysis, database marketing, e-commerce, value networks, hybrid channels, supply chain management. Marketing Management...
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...cross-functional groups of employees. Materials • Divisional Structure 3. This type of organizational structure combines the advantages of functional specialization with the advantages of product-project specialization. • A. Specialization business • B. Product-team structure • C. Divisional organization • D. Matrix structure Correct : A matrix structure allows an employee to be assigned to both his or her functional team and to another group, based on a project or product. By using a matrix structure, a firm can capitalize on the knowledge of its employees in more areas than just their currently stationed line. Materials • Matrix Organizational Structure Concept: Contemporary Organizational/Enterprise Structures Mastery 100% Questions • 4• 5 Materials on the concept: • The New Millennium • Initial Efforts to Improve the Effectiveness of Traditional Organizational...
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...Integrated Essay: Value Chain Analysis Introduction The purpose of this essay is to analyze the strength and weakness of the value chain for the Department of Veteran Affairs Supply (Value) Chain. Core Concepts The objective of this analysis of the Department of Veteran Affairs Supply (Value) Chain is to provide clear and concise identification of strengths and weaknesses (internal) opposed to opportunities and threats (external) (SWOT) critical to the viability of the value (supply) chain. Porter’s Generic Value Chain is the model for the analysis that identifies information, value-adding activities, e.g., primary activities, inbound logistics, and outbound logistics within the larger value system. The value-added to the value chain is the support services increase the efficiency of current Veterans Affairs supply chain. The data captures analytics requirements for informed decision; the results will be propagated as research. Analysis Analyzing the Department of Veteran Affairs Supply (Value) Chain one must consider core concepts, the value chain, value-generating activities and feasibility of the supply chain. The management of key VA organizations and contractors are vital to sustainability of the integrated enterprise supply (value) chain. According to Porter (1985) “Value chain is the analysis of a business as a chain of activities that transform inputs into outputs that creates value for customers. For analyzing the sources of competitive...
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...cross-functional groups of employees. Materials • Divisional Structure 3. This type of organizational structure combines the advantages of functional specialization with the advantages of product-project specialization. • A. Specialization business • B. Product-team structure • C. Divisional organization • D. Matrix structure Correct : A matrix structure allows an employee to be assigned to both his or her functional team and to another group, based on a project or product. By using a matrix structure, a firm can capitalize on the knowledge of its employees in more areas than just their currently stationed line. Materials • Matrix Organizational Structure Concept: Contemporary Organizational/Enterprise Structures Mastery 100% Questions • 4• 5 Materials on the concept: • The New Millennium • Initial Efforts to Improve the Effectiveness of Traditional Organizational...
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...of College Card) | 100834533 | Year: | 1 | Course Code | MN2201K | Course Tutor: | Mr Ailson De Moraes Dr Endrit Kromidha | Assignment No.: | Individual Assignment | Degree Title: | Strategic Management | Question No. & Title: | 2.Using an extended example critically discuss the view that a ‘sector matrix’ gives a better strategic understanding of product markets than the concepts of ‘product’ or ‘commodity’ chains. | This essay will analysis the sector matrix and the chain concept to identify their comparative use and which has a better strategic understanding in the long-run of product market, such as the automobile market. And moreover, it will be begin with the definition and the benefits and limitation of these approaches. As mention, this paper will critic the three tools for analysing and prescribing remedies for improvement in the company performance; the sector matrix framework and the chain concept, Value chain and Global Commodities Chain.This approach will be explain through the seventh-largest auto maker in the automotive industry, Chrysler ( Vanne,2014). Value chain was introduced in 1985 by Michael Porter as a “basic useful tool for firms to achieve competitive advantage and enhancing it to sustain” ( Porter 1985 :26). It defines as a series of activities that builds and create business conceptualising the activities that is provides product and service to a customer (Ensign n.y.) and (Economictimes,2015) Its describe as analysing which focuses...
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...Integrating a Value Chain Perspective in Small Scale Enterprise Development TRAINING SCHEDULE November 19-30, 2012 Rural development generally includes supporting local people’s livelihoods through income-generating activities and small-scale enterprises. Previous program experiences point to the importance of building local entrepreneurship capacity, establishing business organizations, and enabling access to key institutional support services. New challenges have emerged that influence success of these development efforts such as: 1) managing the impact of emerging markets on rural producers and consumers, 2) improving competitiveness and efficiency of small-scale enterprises, and 3) promoting equitable gender sensitive contributions and benefits among stakeholders including private sector. More recently, value chain approaches have been explored to bring more benefits to rural producers through better market links. Course Description The course focuses on integrating a value chain perspective in rural development, and how this conceptual and methodological framework can enhance program strategies for sustainable livelihoods, profitable small scale enterprises and socially responsive private sector. Learning content includes: basic principles and concepts of value chain development, practical methods and tools in integrating value chain perspective in rural development programming, and lessons learned from case studies on linking rural enterprises to dynamic value chains. The course...
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...Value Chains Versus Supply Chains by Andrew Feller, Dr. Dan Shunk, and Dr. Tom Callarman Abstract The concept of a Value Chain has existed for twenty years but we find it still is an unclear concept. It has been suggested that the third generation supply chain is based on customer intimacy and is fully synchronized. In this paper, the authors discuss the need to relate the concepts of the value chain and the supply chain in a more comprehensive and integrative manner. We begin with a discussion of value and the development of the concept of value chain. We then discuss similarities and differences of the value chain and the supply chain, and conclude with suggestions regarding the need for synchronizing value and supply chains to optimize business performance. What is Value? The Value Chain concept was developed and popularized in 1985 by Michael Porter, in “Competitive Advantage,” (1) a seminal work on the implementation of competitive strategy to achieve superior business performance. Porter defined value as the amount buyers are willing to pay for what a firm provides, and he conceived the “value chain” as the combination of nine generic value added activities operating within a firm – activities that work together to provide value to customers. Porter linked up the value chains between firms to form what he called a Value System; however, in the present era of greater outsourcing and collaboration the linkage between multiple firms’ value creating processes has more commonly...
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...“Energy Chain”, A New Concept in Evaluating Future Energy Conservation and Greenhouse Abatement Alternatives and Effectiveness Background The energy demand and supply system consists of many kinds of energy subsystems, for example, grid network, fuel (city gas, LPG, kerosene and so on) networks, prospective fuel (hydrogen) networks and demand-side equipments such as heat pump and cogeneration. In recent years, many evaluation methods and factors have been proposed and discussions of energy policy about innovative technology are becoming more multifaceted. In addition, as a result of specialization and segmentation of engineering science, too much discussion has been centered on particular details of efficiency, rather than on the overall needs of the energy supply and demand system. Integration of these evaluations and discussions is necessary for criteria for judgment. Critical review is always necessary to ensure that prospective technologies are really energy saving and contribute to greenhouse abatement over the whole spectrum from producing energy to end-use. Objectives To introduce a new concept of “Energy Chain” from producing energy through transmission, utilization and end-use, and to propose engineering methodology and evaluation method with examples. Principal Results 1.Proposing a New Concept of Energy Chain and Evaluation Method What the energy end-user needs is “energy benefit”. This include all kinds of benefit 1 that end-users enjoy. The energy chain (EC)...
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...Summary The concept of value chain has attracted considerable attention of managers and researchers. This report briefly presents the value chain in manufacturing industry and then explores the leadership roles of the engineer in the management of the value chain. Furthermore, this report analyzes the benefits of using an engineer in the value chain management and points out that the engineer is best suited to perform the value chain management role. Table of Contents Introduction 2 The Value Chain in manufacturing industry 2 Role of the Engineer in Value Chain 4 Main Management Actions of Value Chain 4 Leadership Role in the Value Chain Management 4 Benefits of Using an Engineer in Value Chain Management 5 Conclusion 6 References 7 Introduction The demands of the new economy caused by globalization have changed the focus of companies from internal efficiency to the creation of value in the extended enterprise, including their suppliers, alliance partners, distributors and customers. The concept of value chain has attracted a great deal of attention from managers and researchers. Porter (1985) described the value chain as a complex series of activities through which a product or service is designed, produced, marketed, delivered and supported and these activities coordinate the nexus between supply and demand. This report explains the leadership roles of the engineer in the value chain management and...
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...Value Chain The value chain also chain as value chain analysis is a concept from business management that was first described and populated by Michael Porter in 1985. A value chain is a chain of activities for activities for a firm operating in a specific industry. The chain of activities gives the products more added values then the sum of added values of all activities and also said that, value chain is an interrelated series of process that produce a service on product to the satisfaction of customer. The concept of value chain also focuses attention on the types of processes in the value chain. History of DELL: * Founded by Michael Dell in 1984 * The single concept: Selling computer systems directly to customers * Designed and built the first computer system of its own design in 1985 * Was one of the first computer companies to send a technician to homes to service personal computers in 1985 * Introduced the 316LT, the company’s first notebook computer in 1989 * Joined the top-five computer system makers worldwide in 1993 * Earning appr. $1 million per day 7 months after the launch of dell.com in 1996 * Introduced E-Support, an online tool to provide technical support to customers in 1999 * For the first time, Dell achieves No. 1 ranking in global market share in 2001 Activities of DELL: Primary Activities: Inbound logistics: 1. All those activities concerned with receiving and strong externally...
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...taken by this organization with regards to SCM to improve the finance and non- finance performance. 3 Introduction 3 Basic component Supply Chain Management 3 Plan 4 Source 4 Make 4 Deliver 4 Return 4 Supply chain management for logistic 5 Supply chain management for downstream 6 Tata Steel Strategic 6 Tata Steel supply chain logistic strategy 7 Tata Steel Supply Chain downstream strategy 8 Tata Steel finance improvement 9 Tata Steel non-finance improvement 9 Conclusion 11 Q2. Discuss various Supply chain activities (in relation to Lean Management) in a Toyota company in Danish Industries can learn and use for improved performance. 12 Introduction 12 What is Lean 13 Lean supply chain 14 Lean supply chain for Toyota Production System in Denmark 14 Value stream mapping 16 The VSM process 17 Performance improvement with implementation of VSM 17 Conclusion 19 Q1. Tata steel has taken various strategies in the SCM to improve the performance of the organization. With reference to the Internet based information, discuss various strategic actions taken by this organization with regards to SCM to improve the finance and non- finance performance. Introduction The Tata Group of Companies has always believed strongly in the concept of collaborative growth, and this vision has seen it emerge as one of India's and the world's most respected and successful business conglomerates...
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...products and services of higher value than the inputs. It may also be viewed as a value addition process. Khanna (2012) Therefore, operations management follows an input, transformational and output model whether it’s an individual activity or the entire organizational operations system. Operations and processes transform inputs into outputs Figure 1: The input-transformation-output model Outputs Inputs Source: Slack N, Chambers S, Johnston R and Betts A (2009) Operations and Process Management. Operations management is a process of how the organizational activities are carried out efficiently and effectively in order to achieve strategic objectives. It identifies the best practices in performing business activities. Hence it creates value to the organization and its customers. In the context of operations management “Logistic and Supply Chain Management” plays a vital role. Therefore, this report discusses the importance of logistic and supply management and its implications on business activities. It will explain the overall concepts underlining supply chain management and brief the personal opinion on the concepts explained. Finally, it will evaluate the application of the concepts in the practical environment. 3. Introduction to Logistic and Supply Chain Management According to the Council of Supply Chain Management Professionals (CSCMP), a professional association that developed a definition in 2004, Supply Chain Management “encompasses the planning...
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...A value chain is a chain 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 from business management and was first described and popularized by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.[1] The idea of the value chain is based on the process view of organizations, the idea of seeing a manufacturing (or service) organization as a system, made up of subsystems each with inputs, transformation processes and outputs. Inputs, transformation processes, and outputs involve the acquisition and consumption of resources - money, labour, materials, equipment, buildings, land, administration and management. How value chain activities are carried out determines costs and affects profits. —IfM, Cambridge[2] The concept of value chains as decision support tools, was added onto the competitive strategies paradigm developed by Porter as early as 1979.[dubious – discuss][3] In Porter's value chains, Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales and Service are categorized as primary activities. Secondary activities include Procurement, Human Resource management, Technological Development and Infrastructure (Porter 1985, pp. 11–15).[1][2] According to the OECD Secretary-General (Gurría 2012)[4] the emergence of global value chains (GVCs) in the late 1990s provided a catalyst for accelerated change in the landscape...
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