Describe
the goal of value chain management.
Answer
The goal of
value chain management is to create a value chain strategy that meets and
exceeds customers’ needs and desires and allows for full and seamless
integration among all members of the chain.
A good value chain is one in which
a sequence of participants work together as a team, each adding some component
of value—such as faster assembly, more accurate information, better customer
response and service, and so forth—to the overall process.
The better the
collaboration among the various chain participants, the better the customer
solutions. When value is created for customers and their needs and desires are
satisfied, everyone along the chain benefits.
For example, at automotive
interior supplier Johnson Controls Inc., managing the value chain started first
with improved relationships with internal suppliers, then expanded out to
external suppliers and customers. As the company’s experience with value chain
management intensified and improved, so did its connection with its customers,
which ultimately will pay off for all its value chain partners.
Source: Management,
11e (Robbins/Coulter)