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An industry value-chain is a physical representation of the various processes involved in producing goods (and services), starting with raw materials and ending with the delivered product (also known as the supply chain). It is based on the notion of value-added at the link (read: stage of production) level.
[2] [3] A more narrow definition of supply chain management is the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronising supply with demand and measuring performance globally".
Supply-chain management (SCM) has become increasingly relevant in theory and practice in light of more-complex supply chains. The SCM performs extensive operational tasks, including supply-chain controlling. Seuring [1] transfers the three main concepts of German supply chain-controlling literature into the specific demands of SCM:
In sophisticated supply chain systems, used products may re-enter the supply chain at any point where residual value is recyclable. Supply chains link value chains. [6] Suppliers in a supply chain are often ranked by "tier", with first-tier suppliers supplying directly to the client, second-tier suppliers supplying to the first tier, and so on. [7]
Supply chain surplus can be calculated by the following formulae: Supply chain surplus = Revenue generated from a customer - Total cost incurred to produce and deliver the product. Supply chain surplus = Customer Value - Supply Chain Cost. [5] These terms were coined by Sunil Chopra, of the Kellogg School of Management and Peter Meindl, of ...
Analysing the firm's activities as a linked chain is a tried and tested way of revealing value creation opportunities. The business economist Michael Porter of Harvard Business School pioneered a value chain approach: "the value chain disaggregates the firm into its strategically relevant activities in order to understand the costs and existing potential sources of differentiation". [3]
Transparency in the supply chain influences how consumers view and support companies, so improving data driven sustainability efforts can positively affect supply chain business. A company’s negative impact on environmental or social areas may show in their stock market value, exposing their true values to investors.
Marketing should be emphasized by global supply chain managers to create customer value, satisfaction, and loyalty. Customer value, satisfaction, and loyalty lead to improved profit margins, which in turn leads to overall corporate growth. [5] Managers need to think about their strategies and the implication of the strategy on the entire supply ...