Innovative Value Chain Management: A three tiers model
Fadi N. Al-Abbadi
Industrial Engineering DepartmentFaculty of Engineering and Technology, University Of JordanE-mail: Fadi_ju@yahoo.com
This paper proposes a powerful model for managing the value chain; a three tiers model is generated toovercome the deficiencies that exist in the value chain activities; and specifically in the human resourcesmanagement activities and marketing and sales activities as well. The resulted model is built with largedependency on porter’s generic model.
The value chain is a model developed by Porter, focusing on cross-functional orientation in the company.Porter’s value chain model is structured by primary activities such as service, marketing and sales,operations, and outbound and inbound logistics and support activities such as procurement, technologydevelopment, human resource management and company infrastructure.Value chain management (VCM) is the integration of all resources starting with the vendor's vendor. Itintegrates information, materials, labor, facilities, logistics, etc. into a time-responsive, capacity-managedsolution that maximizes financial resources and minimizes waste. In other words, efficient and effectivevalue chain management optimizes value for the customers' customer.
BACKGROUND AND LITERATURE REVIEW
During the past decades, the importance of the value chain and supply chain were arose, for the fact thatfirms are facing a strong competition locally and internationally, which force the firms to adopt a suitablemodel for increasing the pertained value and reducing the cost for the value chain activities.(Brown, 1997) has offered a concise definition of the value chain: “
The value chain is a tool todisaggregate a business into strategically relevant activities. This enables identification of the source of competitive advantage by performing these activities more cheaply or better than its competitors. Its valuechain is part of a larger stream of activities carried out by other members of the channel-suppliers,distributors and customers
”.A ``customer-centric'' approach was used by (Slywotzky and Morrison, 1997) to propose a modern valuechain in which the customer is the first link to all that follows. The task of management is to identify:
Customer needs and priorities
The channels that can satisfy those needs and priorities
The services and products best suited to flow through those channels
The inputs and raw materials required to create the products and services
The assets and core competencies essential to the inputs and raw materialsSlywotzky and Morrison concluded that, the value of any product or service is the result of its ability tomeet a customer's priorities. Customer priorities are simply the things that are so important to customersthat they will pay a premium for them or, when they can't get them, they will switch suppliers.