Aspects of the Value-Chain Analysis to be considered are:
Discuss the two types of Value Chain activities – Primary and Support – and how they help create value by finding both “better” and “different” ways of performing these activities (apply your own organizational and/or SSM company experiences)
According to Carpenter and Sanders (2008) primary activities include logistics, both inbound and outbound, operations, marketing, sales, and service. Support activities include human resources, accounting and finance operations, technology, and procurement. Companies can use both activities to gain a competitive advantage by either making them better or making them different as long as it increases efficiency (Carpenter and Sanders, 2008). However, companies need to be aware that once a firm does decide to utilize a new method for one of these activities, they become subject to a short lived advantage since word travels around industries quick, and outsourcing can reveal efficiencies to many different organizations (Carpenter and Sanders, 2008). Companies can use tradeoffs as a form of protection against rivals who try and imitate configuration of activities by adding or dropping certain activities, or utilizing outsourcing. For example, a firm who is in an industry who’s customer service department is outsources to a foreign land may gain a competitive advantage by using dedicated customer service representatives for each customer.
I started my career in one of the primary activities, working in the inbound and outbound logistics department, working my way up to shipping manager. At the time, one of the systems I wanted to introduce was a RFID system. RFID systems have been shown to improve efficiency in warehouse systems and enhances warehouse operations (Poon et. al., 2009). I wanted to do this to gain a competitive advantage because I had seen other warehouse operations where an RFID system has been utilized and saw the advantages. Ownership felt it was too expensive and unnecessary, and things we had been doing previously will work and continue to work. Although it was not implemented, I knew that with growth an electronic system would be necessary. Through my contacts there I was presented with the fact that the warehouse and logistic system is disorganized, orders are being shipped out late, and inventory is never accurate. This presents a competitive disadvantage to my former firm and I would submit that not having an electronic system is why. I’ve been in various warehouses, and although the industries were the same, the commonalities I saw in the successful firms were some sort of warehouse management tracking software, or an RFID software linked to inventory.
Carpenter, M. A., & Sanders, W. G. (2008). Strategic Management. Upper Saddle River: Pearson Prentice Hall.
Poon, T. C., Choy, K. L., Chow, H. K., Lau, H. C., Chan, F. T., & Ho, K. C. (2009). A RFID case-based logistics resource management system for managing order-picking operations in warehouses. Expert Systems with Applications, 36(4), 8277-8301.