Value Chain And Supply Chain Analysis

990 words - 4 pages

Organizations have many priorities to consider on a day-to-day basis. One of those priorities is the focus on the stakeholders and ensuring they remain satisfied. One way in which stakeholders remain satisfied is by bringing value to them and ensuring their needs, wants, expectations, and requirements are met consistently. This is especially true in every interaction with the customers. Organizations can bring added value by lowering prices, providing superior quality, shipping deliveries faster, and improving overall service. This is done through the effective management of both the supply chain and value chain. For organizations dealing with operations and suppliers in various countries, they need to expand their management to the global level and ensure their global supply chains and global values chains are set to run effectively and efficiently.A global value chain refers to the distribution of production on a global level. Declining costs in transportation, lower barriers for trade and investment, and improvements in information and communications technology have made it easier for organizations to operate separate parts of their businesses in many nations worldwide. A company can shift various functions to the location where efficiency is greatest for that specific function (CanadaExport, 2007).The dispersion of activities in several nations globally helps an organization obtain a comparative advantage in terms of cost and quality. In turn, organizations must increase their attention to global supply chain management. With increased globalization and outsourcing, global supply chain management is becoming an important area for many businesses. As with traditional supply chain management, the factors behind the trend toward global supply management include reducing the costs of procurement and decreasing the risks related to purchasing activities. The considerable difference is that global supply chain management involves a company's worldwide interests and suppliers rather than simply a local or national orientation (Epiq, 2008). Organizations use value chains as a method to examine the impact of competitive advantage. Value chains are made up of activities that create and build value in each step of the process. The chain concludes with the total value delivered by an organization (MarketingTeacher, 2008).Conversely, a supply chain is the network of logistics or supply network that is used by an organization. Steps in the process include planning, implementing, and controlling the flow of goods or services both efficiently and effectively. Included in the supply network are internal and external suppliers that are responsible for moving products or services from the suppliers to the final customer. Supply chain movement begins with raw materials and evolves into a finished product delivered to the end customer. Supply chains and value chains are inherently linked together.A supply chain is simply a series of combined links. If an...

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