The document discusses value chains and Michael Porter's value chain model. It explains that a value chain is a set of activities a firm performs to deliver a product or service. Porter's model views a firm as a system with subsystems that transform inputs into outputs. Each activity in the chain adds value. The chain is part of a larger value system including suppliers, distributors, and customers. Key activities in Porter's model are inbound logistics, operations, outbound logistics, marketing and sales, service, infrastructure, procurement, human resources, and technology development. The document also discusses physical, virtual and combined value chains, as well as the Supply Chain Operations Reference (SCOR) model.

1. Customer Value ChainCustomer Value Chain

2. A value chain is a set of activities that a
firm operating in a specific industry
performs in order to deliver a valuable
product or service for themarket.

3. The idea of the value chain is based on the
process view of organizations, the idea of seeing
a manufacturing (or service) organization as a
system, made up of subsystems each with
inputs, transformation processes and outputs.
Inputs, transformation processes, and outputs
involve the acquisition and consumption of
resources – money, labour, materials,
equipment, buildings, land, administration and
management.
How value chain activities are carried out
determines costs and affects profits.

4. Michael Porter's Value ChainMichael Porter's Value Chain

5. The appropriate level for constructing a
value chain is the business
unit not division or corporate level.
Products pass through a chain of activities
in order, and at each activity the product
gains some value.
The chain of activities gives the products
more added value than the sum of added
values of all activities.

6. A firm's value chain forms a part of a larger
stream of activities, which Porter calls a value
system.
A value system, or an industry value chain,
includes the suppliers that provide the inputs
necessary to the firm along with their value
chains.
After the firm creates products, these products
pass through the value chains of distributors
(which also have their own value chains), all the
way to the customers.

7. All parts of these chains are included in
the value system.
To achieve and sustain a competitive
advantage, and to support that advantage
with information technologies, a firm must
understand every component of this value
system.

8. Primary activitiesPrimary activities
 Inbound Logistics: arranging the inbound movement of materials,
parts, and/or finished inventory from suppliers to manufacturing
or assembly plants, warehouses, or retail stores.
 Operations: concerned with managing the process that converts
inputs (in the forms of raw materials, labor, and energy) into
outputs (in the form of goods and/or services).
 Outbound Logistics: is the process related to the storage and
movement of the final product and the related information flows
from the end of the production line to the end user
 Marketing and Sales: selling a product or service and processes
for creating, communicating, delivering, and exchanging offerings
that have value for customers, clients, partners, and society at
large.
 Service: includes all the activities required to keep the
product/service working effectively for the buyer after it is sold
and delivered.

9. Support activitiesSupport activities
 Infrastructure: consists of activities such
as accounting, legal, finance, control, public
relations, quality assuranceand general (strategic)
management.
 Technological Development: pertains to the
equipment, hardware, software, procedures and
technical knowledge brought to bear in the firm's
transformation of inputs into outputs.
 Human Resources Management: consists of all
activities involved in recruiting, hiring, training,
developing, compensating and (if necessary)
dismissing or laying off personnel.
 Procurement: the acquisition of goods, services or
works from an outside external source

10. Physical, virtual and combinedPhysical, virtual and combined
value chainvalue chain
The value chain categorizes the
generic value-adding activities of an
organization. The activities considered
under this product/service enhancement
process can be broadly categorized under
two major activity-sets.

11. Physical/traditional value chain:Physical/traditional value chain:
a physical-world activity performed in
order to enhance a product or a service.
Such activities evolved over time by the
experience people gained from their
business conduct. As the will to earn
higher profit drives any business
(trained/untrained) practice these to
achieve their goal.

12. Virtual value chain:Virtual value chain:
 The advent of computer-based business-aided
systems in the modern world has led to a completely
new horizon of market space in modern business-
jargon – the cyber-market space.
 Like any other field of computer application, here also
we have tried to implement our physical world's
practices to improve this digital world.
 All activities of persistent physical world's physical
value-chain enhancement process, which we
implement in the cyber-market, are in general terms
referred to as a virtual value chain.

13. SCORSCOR
The Supply-Chain Council manages the Supply-
Chain Operations Reference(SCOR).
is a process reference model developed and
endorsed by the Supply Chain Council as the
cross-industry, standard diagnostic tool for
supply chain management.
The SCOR model describes the business activities
associated with satisfying a customer's demand,
which include plan, source, make, deliver, return
and enable.

14. Use of the model includes analyzing the current
state of a company's processes and goals,
quantifying operational performance, and
comparing company performance to benchmark
data.
SCOR has developed a set of metrics for supply
chain performance, and Supply Chain Council
members have formed industry groups to collect
best practices information that companies can
use to elevate their supply chain models.
This reference model enables users to address,
improve, and communicate supply chain
management practices within and between all
interested parties in the extended enterprise.

15. The model is based on 4 majorThe model is based on 4 major
"pillars":"pillars":
Process modeling and re-engineering
Performance measurements
Best practices
Skills
https://en.wikipedia.org/wiki/Supply_chain_operations_reference