OM (Chapter 2)
Value Chains
Value Chains
Set of flashcards Details
| Flashcards | 13 |
|---|---|
| Language | English |
| Category | Micro-Economics |
| Level | University |
| Created / Updated | 13.05.2013 / 04.12.2014 |
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Value Chain
A value chain is a network of facilities and processes that describes the flow of goods, services, information, and financial transactions from suppliers through the facilities and processes that create goods and services and deliver them to customers.
supply chain
A supply chain is internally-focused on the creation of physical goods.
Value
Value is the perception of the benefits associated with a good, service, or bundle of goods and services (i.e., the customer benefit package) in relation to what buyers are willing to pay for them.
Calculation of Value
perceived benefits
Value = ——————————
Price (cost) to customer
Input-Output Model
A value chain begins with suppliers who provide inputs that are transformed into value-added goods and services through processes that are supported by resources such as equipment and facilities, labor, money, and information. These goods and services are delivered or provided to customers and targeted market segments.
Pre- and postproduction services
Pre- and postproduction services complete the ownership cycle for the good or service. Pre-production services are focused on “gaining a customer.” Postproduction services focus on “keeping the customer.”
Value chain integration
Value chain integration is the process of managing information, physical goods, and services to ensure their availability at the right place, at the right time, at the right cost, at the right quantity, and with the highest attention to quality.
Vertical integration
Vertical integration refers to the process of acquiring and consolidating elements of a value chain to achieve more control.
Backward integration
Backward integration refers to acquiring capabilities toward suppliers.
Forward integration
Forward integration refers to acquiring capabilities toward distribution or even customers.
Three waves of outsourcing
1.Outsourcing goods-producing jobs, such as computer components and electronics from the U.S. in many industries several decades ago. 2.Outsourcing simple service work, such as standard credit card processing, billing and other forms of transaction processing, and software development. 3.Outsourcing skilled knowledge work, such as engineering design, architectural plans, call centers, and computer chip design.
Outsourcing
Outsourcing is the process of having suppliers provide goods and services that were previously provided internally.
Offshoring
Offshoring is the building, acquiring, or moving of process capabilities from a domestic location to another country location while maintaining ownership and control.
