Wednesday, December 5, 2012

Operations Management | Value Chain Management

Describe the goal of value chain management.

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)

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