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

1. a) Outsourcing to specialists
2. b) Reduces unit cost of production/service
3. c) Can produce waste
4. i) Each party ignores the effect of its actions on the other
5. ii) Reduces customer service, increases inventory, waste and cost

iii)     Introduces constraints for timetables, forecasting and communication

1. iv) Communication and data exchange are key in such an environment

2)      Maximizing net added value

1. a) Reducing uncertainty
2. 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

1. 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

1. a) Value chain participants
2. i) Customers
3. ii) Suppliers

iii)     Agents

1. iv) Authorities
2. v) People
3. b) Products of services
4. i) Descriptions and key characteristics
5. ii) Prices and costs

iii)     Technical specs

1. c) Processes or treatments