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The Role Value Plays in Supply Chain Management

To what extent does value play a role in supply chain management? Explain your answer.

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Supply chain management is a significant determinant of competitive strength. "The Value Network" is basic theme in which companies manage networks of internal and external processes that create and add value. This demands an assessment of internal processes in terms of: (a) Do they create or add value, as the customer perceives it? (b) Are they world-class in terms of performance excellence? Today's information-driven, integrated supply chains are enabling organizations to reduce inventory and costs, add product value, extend resources, accelerate time to market, and retain customers.

David Bovet of HBR says that, "In order to effectively balance risk and opportunity, product manufacturers, distributors, and firms need to periodically rethink their strategies for going to market. There are two ways to strategically address the burgeoning nature of risk: (1) shorten the supply chain in order to reduce cycle time and disruption risk or (2) optimize the portfolio of supply chain sources and locations ...

Solution Summary

This solution discusses the role value plays in supply chain management.