The general principles of value chain management
Tom McGuffog and Nick Wadsley
Supply Chain Management
1999, Vol. 4, No. 5, pp. 218-225
1) Specialization
- a) Outsourcing to specialists
- b) Reduces unit cost of production/service
- c) Can produce waste
- i) Each party ignores the effect of its actions on the other
- ii) Reduces customer service, increases inventory, waste and cost
iii) Introduces constraints for timetables, forecasting and communication
- iv) Communication and data exchange are key in such an environment
2) Maximizing net added value
- a) Reducing uncertainty
- i) Demand
(1) Predictability of order timing
(2) Stability of order sizes
(3) Impact of influences other than consumer demand
(4) Accuracy required on prices, place, time
- ii) Supply
(1) Predictability of Lead times
(2) Checking the quantity
(3) Testing the quality
iii) Technology
(1) Collaborative event management systems (CEM)
3) Model: Categorizing data for CEM
- a) Value chain participants
- i) Customers
- ii) Suppliers
iii) Agents
- iv) Authorities
- v) People
- b) Products of services
- i) Descriptions and key characteristics
- ii) Prices and costs
iii) Technical specs
- c) Processes or treatments