Question

Please discuss why mangement of an organization's value chain is important.

Answer 1

Value chain management is the tool that is used to integrate and collaborate the components and resources of value chain. It focus on enhancing the value at each chain level and minimize resources that result in decreasing the inventory, developing better products and improving customer satisfaction.

Management of an organization's value chain is important because: -

• Value chain management (VCM) help the organization to improve the ability to capture, track and manage customer and marketing requirements. This helps in improving bids and proposals.
• VCM helps in developing a cross-functional team approach for better product planning, research and development.
• VCM supports standardized business processes to better manage the product master data so that customer expectations and commitments are met.
• VCM helps in better manage and track in-service product configuration changes that coordinate field service, customer support and engineering resources.
• VCM streamline the processes, reduce inefficiencies waste, promote inventory control and improved product quality which in turn helps in substantial end-to-end cost savings,
• VCM helps in enhancing revenues and better profit margins that contribute to greater overall success.