Value Chain Analysis Conclusion

892 Words 4 Pages
CHAPTER 5
SUMMARY, CONCLUSION AND RECOMMENDATIONS
In this chapter conclusions of the research findings that have been analyzed and discussed in the previous chapter are briefly presented. Furthermore, based on the findings of the study possible recommendations and implications are made.
5.1. CONCLUSION
Value chain activities are closely related to each other. As a result one value chain activity often influences the cost or performance of other ones. Linkages and connections may exist between primary activities and also between primary and support activities. The value chain analysis showed that at the yarn stage the factory was able to add value i.e.
(Costs of yarn production is lower than that of sells price), but in the upstream process
…show more content…
5.2. RECOMMENDATIONS
Based on the findings of the value chain analysis based upon the secondary data the following recommendations are forwarded:
First and foremost, since the factory is in loss, it has to reduce significantly its cost of production, especially the selling and administration costs. Among the major cost components the wage and salary, power (especially use of furnace oil for boilers in finishing) and the miscellaneous bazaar expenses, market research and perdium expenses.
The export sales should be competitive, to reduce the loss from involving in the export marketing the factory should make a cost cutting strategy and the internal value chain activities should be effective and efficient. In this regard the following points needed to be considered:
 As input material cost is very high relative to other costs, wise use of the raw material (resources) is very crucial. The quality of raw material should keep the standard in order to find the optimal output starting from cotton to chemicals and dyestuff.
 Producing new fabrics, and products to meet customers’ requirements with reducing the rejects and poor quality
…show more content…
5.3. SUMMARY
Based on the overall findings and specific conclusions made this study on Analysis of Value Chain in Textile Factories may have several implications:
Implication for profit and survival: In the current global thinking, making a profit is the basic issue for survival of manufacturing companies. As worldwide competition is very tough companies need to be cost conscious in carrying out their VCA.
As it has been evident from the previous analysis, some of the objectives of Value chain analysis was to identify bottlenecks that prevent the achievement of planned targets of productivity and profit, setting priorities across products and value chains, identifying the value adding activities in the chain and assigning costs and added value to each of those activities and finally to evaluate the value added of the cotton processed (ETB/KG)
Implication for further research: since this research is one of the difficult type further analysis in all sectors combining the forward and backward activities is

Related Documents