Value chain
This report depicts the user about the concept of value chain which could be analyzed through investigating over various concepts of the value chain. Basically, in this report, a statement of value chain has been analyzed and through that various factors of value chain has also been evaluated. In this report, concept of value chain, cost estimation in the company, segment of value chain and the value chain’s main purpose has been investigated.
It is a universal concept that defame over diverse activities and the operations of a company which is basically used by the companies to maintain, deliver and manufacture the products and services (Miller and Mork, 2013). This helps the company to maintain a good competitive level. Value chain assists a company in reducing the cost level through identifying and managing the value of product and services of the company. In the concept of value chain analysis, it is crucial for a company to evaluate the market, production identification and provision analysis for a better outcome of value chain. Research of value chain is mainly developed by the organizations to investigate the position and performance of organization and it also manages a good companionship among diverse financial and non financial aspects of a company (Fayard et al, 2012).
Usually, it is examined that the concept of value chain study is a framework. Value chain is a management style which mainly focuses over the business and real worth of it. Value chain prompts the employee and the team to accomplish their allocated task accurately and it also shows its concern over the environment and organization’s culture.
This analysis is relatively more useful for every organization to manage and maintain the whole wherewithal of the business and put them in such a way that appropriate operation of least resources could also be done (Funk et al, 2010). According to this study, it has been analyzed that value chain is very important in an organization as it manages all the related factor of the company.
Value chain is a management style which mainly focuses over the business and real worth of it. Value chain prompts the employee and the team to accomplish their allocated task accurately and it also concern over the environment and organization’s culture (Monczka et al, 2015). According to this study, it has been analyzed that the concept and principles of value chain could approximate the cost of which is associated with a business by using the below process:
Process of cost estimation using value chain analysis
The analysis of value chain evaluates the diverse figures and the information of the organization. The information of the company is analyzed through primary and secondary both the ways to investigate the enhanced result of the organization (Miller and Jones, 2010). Value chain managers are requisite to make a better choice about the various activities after carrying the finest work and the greatest process should be used to distribute the work.
The total cost of every product and services is different form each other and thus it is required by the managers to analyze the cost of each activity. Value chain analysis helps the management to identify the changes and difference in the cost. The cost which occurred most of the time must be looked firstly by the management team of the company.
It is requisite for the administration to investigate the cost driver of entire activities and the cost to evaluate the improved result about the organization. For instance, the labour cost should be allocated on the basis of the labour hour in order to make it simple for the administrator to categorize the unit per cost and total cost perfectly.
Further, company must analyze and make a better decision about the relationship between diverse costs in order to maintain the way of cost reduction (Gereffin and Sturgeon, 2013). The recognition between the performance and the price would assist the organization to appreciate the development which could be done to diminish the cost level of the company.
Lastly, administers and the organization which manages the value management, analyzes over the various opportunities and assist the company to choose the best opportunity and apply that in the company to make a good conclusion. It would assist the organization to diminish the cost level and through it, the profitability level of the company would enhance.
According to this procedure, it has been found that the manger of value chain department should be updated and should be of inventiveness nature in order to manage the opportunities which could be gripped at the perfect timing by him or her.
Value chain assists a company into reducing the cost level through identifying and managing the value of product and services of the company. According to the study of value chain segment, it has been found that chiefly the analysis of value chain has been separated by the organizations according to the various primary and secondary activities. The activities and the segment of the value chain have been given below:
Importance of value chain management for a company
According to the above chart, it has been found that through using the above segment, the process of value chain is done in a business. The details and explanation of the above segments has been given below to understand it briefly:
Inbound logistic is the primary activities which manages the entire activities of the company in a perfect manner. Inbound logistic look over the process of managing the entire activities of purchasing raw material and keep it into the warehouses.
Operation is the primary activities which manages the entire activities of manufacturing of the company in a perfect manner. Operations look over the process of managing and manufacturing the products (Johnson and Templar, 2011).
Outbound logistic is the primary activities which manages the entire activities of the company in a perfect manner. Outbound logistic looks over the process of distributing the finished goods in the market.
Marketing and sales is the primary activities which manages the entire activities of the company of promoting the products and services in a perfect manner.
Services are the primary activities which manages the entire activities of the company in a perfect manner. It assists the company to offer the best of the services.
Inbound logistic is the secondary activities which manages the infrastructure of the company in a perfect manner (Johnson, 2014).
Technology is the secondary activities which manages the new technology of the company in a perfect manner.
Procurement is the secondary activities which manages the infrastructure of the company in a perfect manner.
Human resource management is the secondary activities which manages the process and the functions of the human resource management of the company in a perfect manner (Gereffi and Frederick, 2010).
Value chain analysis over Hawker Siddeley has been analyzed to analyze the main activity and the purpose of value chain in the company. Through the investigation over the company, it has been analyzed that the organization has used the investigation of the value chain to administer and control over the position and the performance of the organization.
The annual report of the organization depict that it has been analyzed that it is very easy for the organizations to sustain the figures on the basis of the value chain analysis in order to analyze that how much impact it puts over the performance and the activities of the company (Centi, Quadrelli and Perathoner, 2013). The annual report of the company depict that the operations and the activities of the company has been improved a lot after the implementation of value chain analysis. More, it has been found that the various new decisions have been taken by the company after this analysis which is helping the company to manage and administer the new opportunities as well as it is also helping the company to reduce the level of the cost (Baldwin and Venables, 2010). Through the value chain analysis, it becomes easy for the company to achieve the competitive advantages.
Through the study, it has been found that the value chain department of the comapny looks over all the activities and manages the process of the company in a perfect manner. The process of the company has also been improved.
Conclusion:
According to this study, to conclude, value chain management process helps the company to mange and administers the process and the entire activities of the company in a proper manner. This depict that the value chain must be implemented by every company to manage the activities of the company.
References:
Baldwin, R. and Venables, A.J., 2010. Relocating the value chain: off-shoring and agglomeration in the global economy.
Centi, G., Quadrelli, E.A. and Perathoner, S., 2013. Catalysis for CO 2 conversion: a key technology for rapid introduction of renewable energy in the value chain of chemical industries. Energy & Environmental Science, 6(6), pp.1711-1731.
Fayard, D., Lee, L.S., Leitch, R.A. and Kettinger, W.J., 2012. Effect of internal cost management, information systems integration, and absorptive capacity on inter-organizational cost management in supply chains. Accounting, Organizations and Society, 37(3), pp.168-187.
Funk, C.A., Arthurs, J.D., Treviño, L.J. and Joireman, J., 2010. Consumer animosity in the global value chain: The effect of international production shifts on willingness to purchase hybrid products. Journal of International Business Studies, 41(4), pp.639-651.
Gereffi, G. and Frederick, S., 2010. The global apparel value chain, trade and the crisis: challenges and opportunities for developing countries.
Gereffi, G. and Sturgeon, T., 2013. Global value chain-oriented industrial policy: the role of emerging economies. Global value chains in a changing world.
Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.
Johnson, M. and Templar, S., 2011. The relationships between supply chain and firm performance: the development and testing of a unified proxy. International Journal of Physical Distribution & Logistics Management, 41(2), pp.88-103.
Johnson, P.F., 2014. Purchasing and supply management. McGraw-Hill Higher Education.
Miller, C. and Jones, L., 2010. Agricultural value chain finance: Tools and lessons. Food and Agriculture Organization of the United Nations and Practical Action Pub..
Miller, H.G. and Mork, P., 2013. From data to decisions: a value chain for big data. IT Professional, 15(1), pp.57-59.
Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and supply chain management. Cengage Learning.
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