INTRODUCTION TO VALUE CHAINS
A Value Chain consists of a number of various activities that essential to carry a product from its inception phase to the final delivery to its user. If considered in the most basic form, a Value Chain can be best described as a process interlinked in a two way nature with the Design, Production, and Marketing and Consumption phases. There is a complete range of activities that are associated with each of these sub phases of the Value Chain. The entire Value Chain is a two way characterized process- for example; the design department involved within a Value Chain not only influences the production and marketing of the final product but also is subjective to the constraints that are experienced within each department of the Value Chain.
According to the modern value chain assessment done by Michael Porter, there are two different kinds of elements involved:
a) The diverse activities that are carried out in the value chain are interconnected between the various stages involved. These stages are concerned with the supply, (logistics, operations, marketing and sales), the conversion of these participants into final product (manufacture, logistics, quality and constant development course), and the supplementary support services offered by the company in the form of human resources and resource and technology planning. The significance of sorting out these varieties of roles is that it draws notice away from a limited focus on physical transformation.
b) Porter complements this discussion of intra-link functions with the concept of the
Multi-linked value chain itself, which he refers to as the value system. The value system basically extends his idea of the value chain (as described in the previous paragraph) to inter-link ...