To understand the importance of value chain management within the organization, we have to know about value chain itself first. Value chain is the full range of activities — including design, production, marketing and distribution — businesses go through to bring a product or service from conception to delivery. For companies that produce goods, the value chain starts with the raw materials used to make their products, and consists of everything that is added to it before it is sold to consumers. In other words, value chain is the entire series of organizational work activities that add value at each step from raw materials to finished product. So the value chain management is the process of managing …show more content…
First, the organization focused on vertically integrated operations. This method give us the direct control of everything, for example if you manufactured a product, you wanted to control the material sources, the transportation, the warehousing, the production, and possibly even the retailing of your product. The theory held that more vertical elements that were under your direct control, the more efficiently you were able to perform. Soon, because of the technology development and globalization, they focus more on their core competencies and not try to do everything alone. For example, if you have a manufacturing company, you cooperate with shipping company to distribute your products. And after that, managers eventually realize that the most important thing is about …show more content…
There are 3 major points about value chain management; time matters, and relationship and collaboration
In order to improve in time matters, a company can do things like build value chain programs on the foundation of earlier recovery efforts. When a country is having a breakdown after a bad situation, they will eventually recover. During this recovery, they will rebuilding opens new markets for construction labor, materials and asset replacement, and value chain development activities can strengthen relationships and trust built during these recovery efforts. This is the time where managers should take the chance of market opportunities.
The other thing that the company can do regarding to time matters is to use aggressive approach. Introducing new ideas and skills over time can help value chain programs take advantage of the most accessible opportunities and generate early momentum while staying on a path toward more attractive markets over the long term. An excellent example is a value chain project in Sudan that took a progressive learning approach, selecting a non-commercialized product—shea butter—that was owned by communities and managed by women, and then developing a higher-value market system around this basic