Value Chain Management
Based from the overall experiences of the companies that shifted to value chain management, they really testified based on the article of WMEP, that they have been experiencing improvement in the field of market share, sales, quality, delivery time, customer service and logistics management. The increase in the effectiveness and value added on the efficiencies of the employees and on the operation itself makes the companies to experience such impressive growths.
In order to fully understand what happens during the value chain management through which most of the firms are getting their competitive advantage over their competitors, the following are the steps in the value chain management. First one is the “inbound logistics” wherein it involves all the processes in the receiving, warehousing and inventory control of the raw materials.
The second step is the “operations” which covers the ‘value-creating’ activities that converts the raw materials into finished products and this is followed by the “outbound logistics” that includes all the activities required in order to ‘deliver’ the finished products to the customers as well as warehousing, order fulfillment and the like. The fourth step is the “marketing and sales”. This encompasses those activities related to the acquisition of buyers that will purchase the product together with the ‘channel selection’, advertising, pricing and the like.
The last step for the value chain is the “service” which includes the areas that sustains the product’s value as well as the customer support, repair services, etc (QuickMBA, 2007). The Managers Based from the above stated characteristics of Value Chain Management, we can really see that it is no longer needed for a company, who uses the said kind of system, to hire or employ more number of managers to supervise the operation since they can now assign the managers with more tasks because workers no longer need to be supervised ‘round-the-clock’.
One of the characteristics that we talked about a while ago is that the company, who uses value chain, has improved the performances of their employees in the conduct of their responsibilities or duties. With this, there will need only less guidance from the managers, and by doing so, there’s no reason for the company to hire lots of managers if the tasks are can be performed by only a few managers. Another cited characteristic above is the reduction of the wastes, because of this, the company will no longer have to hire or employ managers that will overlook the operation for the waste control management.
This task can be designated to other managers, with less assigned responsibilities and/or whose field of concern is somehow has a connection with the wastes control management. Since the process or the structure itself makes the improvement in the areas of sales growth, delivery time, customer service and other things that could serve as the strength of the company over their competitors, there will be less need for the company to invest more into the improvement of those areas.
Some other business spends millions of dollars just to acquire an impressive sales return, good customer services and an effective and efficient logistics management that plays a vital role especially if the business is operating internationally. With the said above good points regarding the Value Chain Management, the company being concerned here will save money out of improving their system.
This also maximizes their profit, since there will be more customers that will now be attracted to the performance of the services of the company and the good reputation that it shows to the market, in such a way that they will now have profits that is more than to what they are originally targeted through the aid of the supplier’s partnership. Since the company hires only less managers compared before, then this will cut their costs in the wages of the employees.
The system also makes their managers to be a competitive one since they will be supervising more areas of responsibility and this will enables them to become ‘flexible’ in managing many areas and not only to the area where the latter specialized. The improvement of the efficiency and effectiveness of the production makes the company to produce more products than before, and so, will give the company in return more profits out of their production processes. The more products you sell, the more the profits that you can incur over the next market calendar.
Conclusion At this point, we would like to stress out that this system is not a perfect one as what we are trying to picture out in this piece of work. Only that, we are just giving you the birds eye view of what will be the benefits that can be derived when you used this into anyone’s own business. Value Chain Management has also its flaws, but we still believe that it is offset by the benefits that can be derived by the company that chooses this management system.
The good characteristics that it promotes are very appealing and beneficial to the company, as well as the employees since they also experiences improvements in their performance that would later on, which we believe, uplift their careers. Value Chain Management is just one of the many ways that can help every company in the market to experience having an impressive profit while still delivering the products to the customers in high quality.
There are still some other ways wherein they could maximize their profits. It is up to the firm to judge if this would fit to their type of business they are into. In this regard, we are encouraging the companies that have not yet tried this management system to give an attempt to apply the said system into their own business operation and just see for themselves the benefits and good points that we are saying in this piece of work.
Kotelnikov, V. (2001). Value Chain Management [Electronic Version], 1. Retrieved June 17, 2007 from http://www. 1000ventures. com/business_guide/im_value_chain_main. html. QuickMBA. (2007). The Value Chain [Electronic Version], 1. Retrieved June 20, 2007 from http://www. quickmba. com/strategy/value-chain/. WMEP. (2003). Turn your Supply Chain into a Value Chain [Electronic Version]. Retrieved June 20, 2007 from http://www. wmep. org/valuechainmanagement. html.