“VALUE HAS A VALUE ONLY IF ITS VALUE IS VALUED”

WHAT IS VALUE ?

Porter defined value as:“The amount buyers are willing to

pay for what a firm provides”

DEFINING VALUE FROM THE CUSTOMER’S PERSPECTIVE

KEY DISTINCTION IN DEFINING VALUE

BUSINESS TO BUSINESS(B2B) BUSINESS TO CONSUMER(B2C)

B2B

B2C

VALUE CHAIN

The value chain concept was developed and popularized in 1985 by Michael Porter

Effective value chains generate profits

PICTORIAL REPRESENTATION OF VALUE CHAIN

Supply chain is the integrated management of all the linkages and value added activities

from the supplier’s supplier to the customer’s customer

A BRIEF HISTORY Supply chain management emerged in the 1980s as a new integrative philosophy to manage the total flow of goods from suppliers to the ultimate user, and evolved to consider a broad integration of business processes along the chain of supply.

PICTORIAL REPRESENTATION OF SUPPLY CHAIN

SIMILARITIES & DIFFERENCESBETWEEN

SUPPLY CHAIN & VALUE CHAIN

Supply chain and value chain are in common parlance.

Supply chain – source to the customer, Value chain - customer to the supplier.

Supply chain – improves efficiency and reduces waste, value chain- Creating values

ACHIEVING OPERATIONAL EFFICIENCY THROUGH VALUE CHAIN

Globalization of supply and production

Benefits already wrung out of manufacturing and the supply chain

Trends in management discourse

CONCLUSION

Integration of supply chain and value chain