Critical Reflection on own experience while studying Managing Value Chain

MANAGING VALUE CHAIN 1
Critical Reflection on own experience while studying Managing Value Chain
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MANAGING VALUE CHAIN 2
A value chain entails the full range of activities that includes designing, production,
marketing as well as the distribution that businesses have to go through to bring services or
goods from the point of conception to delivery (Assessing and managing the value chain, 2002
11). For firms that do the production of goods, value chain begins with the raw materials that are
utilized in the production of the products and consists of anything else that is added to the raw
material before being sold to the clients. Managing Value Chain, on the other hand, refers to the
process of organizing all of the above activities for proper analysis. The particular goal and
objective of value chain management in ensuring that the individuals in charge of the different
stages of the value chain have a good communication with one another. That is imperative in
ensuring that the products get to the customers hands as fast as possible.
In the process of studying 'Managing Value Chain', I developed a great experience in as
far as the matter at hand is concerned. To begin with, I learned that organizing groups of
activities that are connected creating value by the production of goods or services starting from
the raw materials for the purchase by the customers are vital. Moreover, it is worth noting that
the primary objective of any particular business employing value chain management has to do
with integrating communication that is the key to success of a business or interconnected
business (Harvard business review on managing the value chain, 2000 164). Poor
communication in most of the cases is characterized by business failure. Managing value chain
also increases the level of cooperation between members in the production chain that on the
other hand decreases delivery times. Moreover, it lowers the inventories that increase consumer
satisfaction.
While studying Management of Value Chain, I also learnt that value chain is a
systematic approach used in the examination of the development of competitive advantage. It is
MANAGING VALUE CHAIN 3
composed of a series of activities that plays a crucial role in the creation as well as the building
of value. The activities culminate in the entire value that an organization delivers. A general-
purpose value chain that can be utilized by enterprises in the examination of their activities was
proposed by Porter (Harvard business review on managing the value chain, 2000 142). The
value chain also helps in understanding how the various activities are connected. Ways of
performing the activities of the value chain determine the costs and affects the profits. Therefore,
it is a tool that assists the management to get a clear understanding of the sources of value in
organizations.
It is also clear that, with the increased growth of global markets' efficiency, competition
has shifted from taking place between individual businesses to the entire value chains. Thus, the
collaboration that takes place through networks of intelligent ebusiness, a competitive edge will
be developed enabling every other participant in the value chain to prevail in addition to growing
(Assessing and managing the value chain, 2002 14). The collaboration calls for the individual
participants adopting simplified as well as standardized solutions that are based on common data
models architectures. Marking time is critical, and thus, participants have no alternative than
foregoing luxuries of customization as well as modification.
Companies that carry out the manufacturing of products create value by the acquisition of
raw materials and then utilizing them in the production of useful commodities. Retailers then
bring together a wide range of products and present them in a convenient way to the customers.
That is at times supported by personal shopper advice or the fitting rooms. In the case of an
insurance company, policies that are offered to the customers are underwritten by the larger re-
insurance companies (Harvard business review on managing the value chain, 2000 167). In this
particular case, the larger policies are packaged in a customer friendly way after which the
MANAGING VALUE CHAIN 4
distribution is done to mass audience. The company’s value that is created and captured as well
is referred to as the profit margin. When an organization creates more value, it raises the
chances of the profitability to be achieved. Moreover, providing of more value to the clients
results in an organization’s competitive advantage.
Conclusively, Managing Value Chain is vital in any particular business for the
achievement of the maximum profit. This is because, with increase globalization, a majority of
the businesses are entirely depending on the whole chain for the provision of goods and services
that meets the customer requirement and thus increasing the profit margin. Moreover, having a
clear understanding of an organization on how to create value as well as identifying ways of
adding value is one of the critical elements in the development of a competitive edge (Assessing
and managing the value chain, 2002 14). I n studying Managing Value Chain, I learnt that all the
activities within an organization are meant to add value to the products as well as goods that are
produced by the firm. It is thus imperative to run these activities at the optimum level for the
organization to achieve the highest level of competitive advantage. Running of the activities
efficiently enables the company to obtain a value that is higher than the costs of running the
activities. Therefore, in running any particular business, management of value chain should be
put under consideration.
MANAGING VALUE CHAIN 5
Bibliography
Assessing and managing the value chain. 2002. Strategic Direction, 18(2), pp.12-14.
Harvard business review on managing the value chain. 2000. Boston, MA: Harvard Business
School Press.

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