Summary of the VC Framework by Porter. Abstract Michael Porter The Value Chain framework of Michael Porter is a model that helps to analyze specific activities through which firms can create value and competitive advantage. Inbound Logistics Includes receiving, storing, inventory control, transportation scheduling.
Warning Measuring employment can be difficult, especially when part of the value chain is in the informal sector. Some problems that arise are how to count part time employment, and what constitutes full time employment.
The first step is to identify where each of the processes in the value chain are physically located for example, where are the farms, primary processors, and secondary processors. Start at the place of origin i. If possible, a map of the region can be used to indicate the physical flow on it. Preparation of this map greatly facilitated the organisation of subsequent fieldwork to conduct the full value chain analysis.
Example of geographical mapping of the sugar value chain Tool 2 - Figure 4: This is covered by the Value chain mapping question: How does the value change throughout the chain? Other economic parameters are, amongst others, revenue, cost structures, profit, and return on investment.
Tool 2 - Box The following example is a map of the value chain in this sub-sector. The value is the price in rupees Rs.
This example shows that producers weavers actually add the most value, both absolutely Rs. However, this does not tell us about the profit margin of the producers.
It is most likely at this stage of the analysis that only price information is known at each process level. A next step is to analyse what kind of relationship actors have to each other.
This is prompted by the following key question: What types of relationships and linkages exist? Relationships can exist between different process steps e.
Relationships or linkages between similar actors can be mapped according to three broad categories: This is typical for transactions made on a fresh vegetables marketplace: When actors have a preference for transacting with each other time and time again, we can speak of a persistent network relation.
This comes with a higher level of trust and some level of interdependence. This relationship can be formalised by contracts, but this is not a necessity.
One and the same organisation this can be an enterprise, or a cooperative deals with different processes throughout the value chain.
The ownership structure can be partial or full. IIn order to map these types of relationships, different lines and arrows are used. The following example clarifies this.
Example of mapping relationships and linkages The following example is based on the sedge handicraft sub-sector in Vietnam. Most linkages are persistent.Introduction.
A fter initial selection of value chains is complete (Tool 1), the next step is to map the value chain. This is a vital step in guiding the analysis of selected value chains.
This chapter provides the tools and examples on how to capture the different dimensions of a value chain. 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 the market.
The concept comes through business management and was first described by Michael Porter in his best-seller. I think the key aspect of white space / future mapping exercise is to understand that part of this process is based upon belief (criteria to judge tomorrow) not measurement (criteria to judge yesterday) and it is managing the design pathways that come from these white space predictions for future value that can be structured, measured and reviewed once a belief goal is agreed upon.
The mapping of value chain levels through a simple flow chart should be done as early as possible, for example at your first workshop with the core and support teams (see Chapter 1, Section , Event 2).
Value stream mapping can be incredibly useful in various industries. If you're a novice to using value stream mapping software like Lucidchart, you'll find that this guide covers all you need to know about the definition, history, and uses of value stream mapping, along with step-by-step instructions for conducting your own value stream analysis.
Winner of the Shingo Prize! By identifying all the steps and time required to move a typical product from raw materials to finished goods, the authors show that nearly 90 percent of the actions and percent of the time required for the value chain's Current State create no value.