INSTITUTE - USB
DEPARTMENT - BBA
Bachelor of Business Administration
Logistics and Supply Chain Management
22BAT-221
Supply Chain Management DISCOVER . LEARN .
EMPOWER 1
Value Chain Analysis
CO Course Outcome Level
To understand the flow of materials and role of
CO1 logistics in business operations. Remembering
To determine inventory or material
CO2 management techniques to make the supply Understanding
chains more efficient and reliable.
To analyze the various operational facilities
CO3 and processes of supply chain with the logical Analysing
and systematic approach.
To assess the role of strategic interventions to
build strong collaborations in logistics and
CO4 supply chain management. Applying
To develop product specific logistic strategies
CO5 to achieve operational excellence for business. Creating
2
• A value chain is a set of activities that a firm operating in a specific industry
performs in order to deliver a valuable product or service for the market.
• It is a set of activities that an organization carries out to create value for its
customers.
• The concept comes from business management and was first described and
popularized by Michael Porter in his 1985 best-seller, Competitive Advantage:
Creating and Sustaining Superior Performance.
• The idea of the value chain is based on the process view of organizations, the idea
of seeing a manufacturing (or service) organization as a system, made up of
subsystems each with inputs, transformation processes and outputs.
• Inputs, transformation processes, and outputs involve the acquisition and
consumption of resources – money, labour, materials, equipment, buildings, land,
administration and management.
• How value chain activities are carried out determines costs and affects profits.
Primary Activities
Primary activities relate directly to the physical creation, sale, maintenance and
support of a product or service. They consist of the following:
1) Inbound logistics – These are all the processes related to receiving, storing, and
distributing inputs internally. Your supplier relationships are a key factor in creating
value here.
2) Operations – These are the transformation activities that change inputs into outputs
that are sold to customers. Here, your operational systems create value.
3) Outbound logistics – These activities deliver your product or service to your customer.
These are things like collection, storage, and distribution systems, and they may be
internal or external to your organization.
4) Marketing and sales – These are the processes you use to persuade clients to
purchase from you instead of your competitors. The benefits you offer, and how well
you communicate them, are sources of value here.
5) Service – These are the activities related to maintaining the value of your
product or service to your customers, once it's been purchased.
Support Activities
These activities support the primary functions above. In our diagram, the dotted lines show
that each support, or secondary, activity can play a role in each primary activity.
For example, procurement supports operations with certain activities, but it also
supports marketing and sales with other activities.
1) Procurement (purchasing) – This is what the organization does to get the resources it
needs to operate. This includes finding vendors and negotiating best prices.
2) Human resource management – This is how well a company recruits, hires, trains,
motivates, rewards, and retains its workers. People are a significant source of value, so
businesses can create a clear advantage with good HR practices.
3) Technological development – These activities relate to managing and processing
information, as well as protecting a company's knowledge base. Minimizing information
technology costs, staying current with technological advances, and maintaining technical
excellence are sources of value creation.
4) Infrastructure – These are a company's support systems, and the functions that allow it to
maintain daily operations. Accounting, legal, administrative, and general management are
examples of necessary infrastructure that businesses can use to their advantage.
Assessment Pattern
• Understanding of the subject will be assessed through
question and answer technique in the class
• 2 Mid semester tests will be conducted
• Students will appear for online quiz at the end of the
semester
• Surprise test to be taken during the semester
• Regular assignments and case study discussion will be
done to bring more clarity on the subject
APPLICATIONS
• Inventory Planning
• Transportation Management
• Warehouse Management
• Synchronization of all channels in flow of goods
• Green Supply Chain Management: Lean
Practices
References
Books References
• Logistics & Supply chain management; Cases & Concepts by Raghuram & Rangraj
• Logistical Management by Bowersox & Closs: Mc Graw Hill Publications
Web References
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THANK YOU
