Operations are composed of many different processes to fulfill customer needs and requirements. The value chain is a higher-level view of those processes from a customer view. In order to meet customer requirements like quality and cycle time, organizations need to identify the value chain, subprocesses and measures needed to meet the customer needs.
Consider a process from an organization you are familiar with. In 500 words, complete the following:
The value chain of a product is the series of steps in which value is created for customers. It starts with the customer, who buys from retailers, who sell to manufacturers and so on until reaching the end user. The chain then continues as customer demand drives innovation and growth for each step along the way.
The customer is the end user of the product or service.
The retailer sells to the manufacturer, which then sells the product or service directly to customers.
The distributor sells directly to retailers and resellers.
Retailers sell to manufacturers.
Manufacturers sell to distributors and retailers.
Retailers sell to customers
The process of value chain can be broken down into five steps:
The value chain begins with the customer and ends with them. Customers buy products from retailers, who sell them to manufacturers, who then sell their goods to distributors and retailers.
Each step along this chain has its own set of challenges:
The value chain is a great place to begin your analysis of the customer requirements. It’s also important for ensuring that you are meeting their needs and expectations, but it doesn’t have to be the only step in this process! You can look at other options as well if these three don’t fit your company perfectly or give you an opportunity for improvement on any one of them.
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