Value chain is defined as the range of activities that starts at the design phase then production, marketing and distribution of the product.In other words, it is the process deployed by the industries from the start to delivery of the products. The value chain starts with procurement of the raw material and how it is sold to the consumers. This is different from supply chain management.The primary goal of the value chain is to ensure that each stakeholder in the value chain effectively communicate with each other.The logistics management is a part of the value chain that is used to meet requirements of the process by efficient transportation and storage of the products. Effective logistics management aids in the reduction of expenses and enhances the product quality while meeting consumer demands. To achieve this there should be appropriate selection of vendors with the capacity to provide transportation. Transport should be achieved by choosing the most effective route. There should be a competent delivery method for the products to reach the consumers. Induction of required software and IT resources are needed to handle the processes. The businesses are continually looking for ways to improve the business design to improve productivity and reduce costs involved while ensuring that the quality and safety of the products. This requires complex heuristics and efficient management.
Concept, principle/approach of value chain analysis
The concept of value chain was considered to be a part of the decision support tools. Inbound logistics, operations, outbound logistics, marketing and services were the primary activities of the value chain. The secondary activities include procurement of the products, management of people, technology and infrastructure to support the technology. There has been emergence of global value chain that has been found to have far reaching consequences.
The current methodology of value chain that has been followed by the different sectors has been elucidated in the following. Critical review of each application and process has been undertaken.