Value Chain vs. Supply Chain

Value Chain vs. Supply Chain

Supply Chain

• Focuses on delivering products/services to customers, managing the flow of goods from raw materials to finished products.
• Involves multiple stakeholders including suppliers, manufacturers, distributors, and retailers.
• Aims for customer satisfaction through efficient logistics and inventory management.

Value Chain

• Concentrates on adding value at every stage, from raw material acquisition to final product delivery.
• Encompasses production, marketing, sales, and customer service.
• Strives for gaining competitive advantage by enhancing product quality and consumer perception.

Differences between Supply Chain and Value Chain

• Supply chain is the combination of activities and entities that move a product from one place to another.
• Value chain is a series of activities that build value into a product at every single stage.
• Supply chain sequence is from Product Request to Supply Chain to the Customer.
• Value chain sequence is from Customer Request to Value Chain to the Product.
• Supply chain's objective is consumer satisfaction.
• Value chain's objective is gaining competitive advantage.
• Supply chain concept involves conveyance without adding value.
• Value chain concept involves making the product presentable and adding value for the client.

Value Chain Analysis

• The concept was introduced by Michael Porter in his book "Competitive Advantage" in 1985.
• The two major steps in value chain analysis include identification of individual activities.
• The second is analyzing the value added in each activity and relating it to the firm's competitive strength.
• Porter splits business activities into main categories using Value Chain Analysis primary and support activities.

Primary Activities

• Primary activities are those involved in the physical creation, sale, transfer, and support of products or services, including after-sale service.
• Inbound logistics involve receiving, storing and distributing inputs internally, and relationships with suppliers.
• Manufacturing operations encompass conversion/transformation of inputs into finished products/outputs that are sold to customers.

Outbound Logistics, Marketing, and Sales & Services

• Outbound logistics activities deliver the product or service to the customer, including collection, storage, and distribution.
• Marketing and sales activities create awareness among the public and persuade clients to purchase.
• All services increase the value of the product or services and are related to activities maintaining the value of product once purchased.

Support Activities

• Support activities help primary activities and include procurement, technology development, human resource management, and infrastructure.
• Procurement (purchasing) involves obtaining resources to operate, including raw materials, equipment, and labor, and negotiating best prices.
• Human resource management includes recruiting, hiring, training, motivating, rewarding, and retaining workers.

Technological Development & Infrastructure

• Technological development involves managing & processing information and protecting a company's knowledgebase.
• Infrastructure includes a company's support systems and functions that allow maintaining daily operations, like accounting, legal, administrative, and general management.

Recruitment

• Recruitment is a process from recognizing, recruiting, searching, shortlisting, interviewing, choosing, hiring, and onboarding staff.
• Recruitment is identifying, sourcing, screening, shortlisting, and interviewing for jobs.
• Recruitment also involves choosing people for unpaid roles.

6 Stages in Recruitment Process

• Recruitment planning begins with identifying vacancies and examining work requirements, including qualifications, skills, and expertise.
• Job description details what potential employees need to fulfill expectations of the position.
• Job description must include Title, Duties and Responsibilities.
• Also include Qualifications and skills, Location, Compensation, Perks, and Benefits.
• Talent Search that finds the best candidates, recruits can also run job fairs.

Screening and Shortlisting

• Shortlisting require an efficient and accurate screening process.
• First screening candidates focus on minimum qualifications.
• Sort resumes based on preferred qualifications like certifications, experience, expertise, and skills.
• Then, the shortlist of candidates with both the preferred qualifications and the minimum qualifications.
• Indicate any concerns or queries on the resume.

Interviewing, Evaluation and Offer

• Shortlisted applicants must go through the interview process.
• Evaluation and offer of employment is the final part of the recruitment cycle.
• Never expect the candidate to accept your offer.

Six Recruitment Criteria

• Past performance means track record and job experience that need resume submitted and check former employers, school's background.
• Proficiency profile means brain preferences, intelligence, skills, and talents.
• Proficiency profile validation in Proficiency and skills Testing, IQ, Myers-Briggs Type Indicator (MBTI).
• Personality profile means personal conduct, behavior, relationship styles, and personal disposition.
• This includes on-the-job observation during training, probationary, in-depth interviews (check former employers), and background in community.
• Psychological profile routine in psychological tests that are EQ tests, Interviewing, and behavioral observations and background investigation.
• Emotional literacy with maturity attitudes principles need stories veriied thru relatives, supervisors etc.

Potential for Growth & Business Models

• Potential for growth ambition requires reviewing previous 5 criteria, need to excel and lead. Is the last step in the process after going thru everything
• Business model focuses on sustainability.
• Business model is supposed to answer who is ur customer value to add for them.
• Business model canvas is the most used to design business model.
• Business model is all about product design.
• Business model is sellng product and finding right customer allocate a product.
• Business model, how to the business earn money.

Nine Different Components of a Business Model

• Customer segments
• Value propositions
• Channels
• Customer relationships
• Key activities
• Revenue streams
• Key resources
• Key partnerships
• Cost Structure