Value chain management (VCM) is a strategic business analysis tool used for the seamless integration and collaboration of value chain components and resources. VCM focuses on minimizing resources and accessing value at each chain level, resulting in optimal process integration, decreased inventories, better products and enhanced customer satisfaction. The basic objectives of employing value chain management in a business is to integrate communication and increase cooperation between production chain members in order to decrease delivery times, reduce inventories and increase customer satisfaction.
VCM requires the following components:
(1) Integrated chain strategy, planning and scheduling;
(2) An efficient supply chain;
(3) Full and interdependent chain resource management and optimization;
(4) Integrated customer insight data and information.
Benefits of Value Chain Management
Proper VCM is key to optimizing business operations and maximizing profit. Companies can optimize value for themselves, their vendors and their end customers when they effectively manage the flow of production and sales from inbound logistics to operations, outbound logistics, marketing and sales and service.
1. Improved bids and proposals
Effective VCM improves your ability to capture, track and manage customer and marketing requirements to better estimate design, planning, procurement, production and service activities for more accurate cost estimates — all with complete traceability.
2. Better product planning, research, and development
Good VCM includes developing a cross-functional team approach to planning, developing, delivering and servicing products focused on program performance, cost reduction and product quality. This enables you to more effectively plan and implement simultaneous projects while managing resource allocation, costs, scheduling and deliverables more efficiently.
3. Standardized processes
VCM calls for repeatable and measurable business processes to better manage the product master data to ensure that customer expectations and commitments are met. Active VCM enables release and change processes to be better managed from concept to implementation. Standard, reliable and repeatable processes contribute significantly to reducing overall operational inefficiencies and waste.
4. Reduced costs
Optimizing all the value chain components listed above can result in substantial end-to-end cost savings from streamlined processes, reduced inefficiencies and waste, better inventory control and improved product quality.
5. Improved profitability
The ultimate result of a comprehensive and robust VCM program is enhanced revenues and better profit margins, contributing to greater overall success.
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website www.tannet-group.net, or calling HK hotline at 852-27826888, China hotline at 86-755-82143181, Malaysia hotline at 603-21100289, or emailing to firstname.lastname@example.org. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.
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