Topic 2G: Converting Resources: The Value Chain Flashcards
What is value?
What a customer is willing to pay for a good or service - over and above what it actually costs.
What are inbound logistics?
The first part of the value chain in terms of primary activities. This is about receiving, handling and storing inputs
What happens in operations?
This is about converting resource inputs into a final product. Resource inputs are not only materials. People are a resource especially in service industries
What happens in outbound logistics?
Storing the product and its distribution to customers through packaging, testing, delivery and son on
What happens in marketing and sales?
Informing custoemrs about the project, persuadin them to buy it and enabling them to do so through arketing and sales.
What happens in service?
This is the installation of products and or the act of performing the service for the client or customer. Includes all aspects of post-sales service delivery .
What is margin?
This is what the customer is willing to pay over and above what the cost is to the firm in obtaining resource inputs and providing value activities. Represents the value created by the value activities themselves and by the management of linkages between them.
What are support activities in the value chain?
Procurement
Technology development
Human resource management
What is procurement?
About acquiring the resource inputs to the primary activities
What is the essence of the technology department?
Product design, improving processes and or resource utilisation
What is the essence of HR management?
Recruiting, training, developing an rewarding people
What is the essence of firm infrastructure?
Planning, finance, quality control - crucially important to an organisations strategtic capability in all primary activities
What is the essence of linkages?
They connect the activities of the value chain - this is because more costly product design or better quality production might reduce the ned for after sals service
They require co-ordination because . FOR example Just in time requires smooth functioing of operations, outbound logistics and service activities such as installation
What is the essence of value networks?
Activities and linkages that add value do not stop at the organisations boundaries - fro example when a restaurant serves a meal, the quality of the ingredients, although determined by the cook, are determined by the grower. The grower has added value and success in growing products of good quality is important to the customers ultimate satisfaction on the skills of the chef.
