Question

What are supply and value chains? What is the value chain management? What is the goal of value chain Management?

Answer 1

The supply chain is the steps involved in bringing a finished product to the customer from manufacturing to warehousing, distributing, retailing and finally selling the product. It focuses on customer demands and customer satisfaction. The value chain is the process of adding value to raw material such that they can be sold in the market as a finished product. The steps involved in this process come under value chain. It is a set of activities that a company performs to bring a product which can give it a competitive advantage.

Value chain comprises of certain steps and process to bring the raw material to the state of finished products. It is important for the business that these steps and process are managed in the right way so that the product brings the best outcomes and growth to the company. It is a strategic analysis tool that helps in minimising resources and monitoring the value created at each level the product goes through. This results in better quality products and satisfied customers.

The goal of the value chain management is to improve the processes involved in the value chain by integrating communication, increasing cooperation in the members involved in the production process, decreasing delivery times, reducing inventories, manufacturing quality products and increasing customer satisfaction.