Jump to content



What's the definition of value chain management?

Value Chain Management (VCM) are those "management strategies" which a company puts in place in order to integrate company functions, departments and processes to achieve process excellence and consistent performance. VCM practices include cost reduction methods. and process improvement approaches such as business role and process automation. Lean and Agile practices are those proven strategies, methodologies and methods which take Value Chain Management, as a operational science, to the next level in order to pursue and achieve enterprise excellence.

How do you define value chain? 

A value chain is a set of activities that a firm operating in a specific industry performs in order to design, engineer, create, produce, market, sell and deliver a valuable product (i.e., good and/or service) for the market.

The Value Chain encompasses the Supply Chain and Supply Chain of processes. In essence, Value Chain Management sees the Supply Chain as only a portion of the overall business.

Why not Supply Chain?

The phrase "Supply Chain Management" is often used as a synonym to Value Chain Management. But, this is not the entire picture. The Supply Chain consists of the sourcing, acquisition, stocking and replenishment of goods and services which support the Design and Supply Chains.

"Supply Chain" processes and "Design Chain" processes can all be identified and managed as a part of the entire business.

Design Chain, too?

The Design Chain consists of those processes which relate to the design and engineering-related processes. A Design Chain is a component of the overall Value Chain.

Value Chain Management is the way to create significant shareholder value in both operational and financial contexts.

Thus, Value Chain Management practices and methods are many. They focus on processes, business rules (such as policies and procedures) and practices, or methods, which a company deploys in order to manage the processes which, together, form the backbone of the company's business.

Value Chain Management is centered on the concept of integrating all of the areas of a business in an effort to minimize waste and maximize output. This is referred to as "enterprise integration".

In other words, value chain management assesses every step the business takes to produce the product or service it is selling in order to make the process as efficient and effective as possible.


Recommended Comments

There are no comments to display.

Add a comment...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Create New...

Important Information

(terms) (privacy) (guidelines) (cookies)