Professional Documents
Culture Documents
n
gi
ar
M
Secondary
Activities
Procurement
Logistics
Operations
Outbound
Logistics
Marketing Service
& Sales
Primary Activities
M
a
r
gi
n
Inbound
Resource Environment
The Value Chain Michael Porter (1985)
Firms Value
chain
Supplier
value
chains
Channel
value
chains
Customer
value
chains
Suppliers
Procurement
Operations
Distribution
Customers
Requirements Flow
Material Flow
Purchasing
Material
Control
Customer Service
Production
Sales
Stage 2
Material Flow
Material
management
Customer Service
Manufacturing
management
Distribution
Stage 3
Material Flow
Material
management
Customer Service
Manufacturing Distribution
management
Stage 4
Material Flow
Suppliers
Distribution
Internal
Supply chain
Customer Service
Customers
Increasing Complexity
At the end of the second world war there was a
global shortage of manufactured goods.
Today At the beginning of the third millennium
there is an oversupply.
Firms shop freely amongst the nations
In 1991, for the first time, companies spent
more money on computing and
communications gear than the combined
moneys spent on industrial, mining, farm, and
construction equipment.
Organisational Integration
Increasing requirement of integration will
require generalists who can manage
processes.
Knowledge of systems theory and systems
thinking will be a requirement for these
generalist mangers.
We are entering an era of supply chain
competition
Rules of Competition
Competitive advantage achieved by a
combination of product excellence and
process excellence.
Responsiveness and agility
Reliability in logistics this will require
enhanced pipeline visibility
Relationships trend towards customers
seeking to reduce supplier base?
References
Aitken, J., Supply Chain Integration within the Context of a
Supplier Association, Cranfield University PHD Thesis, 1998.
Cited in Christopher, M., (1998), Logistics and Supply Chain
Management. Strategies for Reducing Cost and Improving
Service, Financial Times Pitman Publishing, London.
Christopher, M., (1998), Logistics and Supply Chain
Management. Strategies for Reducing Cost and Improving
Service, Financial Times Pitman Publishing, London
Porter ME 1979, How Competitive Forces Shape Strategy,
Harvard. Business Review March/April 1979.
Porter ME 1985, Creating & Sustaining Superior Performance,
Free Press.