Value chain analysis involves examining the sequence of primary and support activities within an organization that collectively create value for customers through design, production, marketing, delivery, and customer support.
Key Components Analyzed:
- Inbound logistics like material sourcing, transportation, and warehouse operations
- Production processes transforming inputs into finished goods for assembly
- Outbound logistics related to order fulfillment, distribution, and shipping activities
- Marketing & sales functions involved in attracting and retaining buyers
Example:
By studying its value chain, the retailer identified procurement as a priority area for improvement by increasing supplier consolidation and switching distribution centers.
Takeaways:
Strategic value chain reconfigurations optimize efficiencies across the flow of goods and services from suppliers to end-users. Outsourcing non-core functions and leveraging technology upgrades enhance competitiveness if value drivers are well analyzed
