Value Chain

Within an organization, one must develop a sense of understanding the organization’s value chain; the value chain, being a series of activities that provide a value to their products or services.  In this instance, we are talking about a service; buying and selling of used Compact Discs to students.  The value chain that is created within this service is as follows:

The first three parts of the value chain are Raw Materials, Inbound Logistics/Inbound Tracking Systems, and Warehouse and Storage. These are part of what is referred to as “Upstream Management”. The raw materials that are necessary for this service to exist come from various sources.  The Compact Discs themselves being provided by sellers is the top material needed for this venture.  This could be either brought directly to the company or shipped. Also needed, would be the cases in which the compact discs are kept to prevent damage to the “CD” itself.  These materials are combined to create the finished product for consumers.   The next activity within the value chain is Inbound Logistics.  Inbound Logistics consists of the ability to track your materials that are incoming to the organization. Within inbound logistics, we are able to receive the CD’s from the seller, and categorize them by genres and artists, for effective storage purposes and efficient distribution of items to the consumers.  This would be an inventory. Within the warehouse and storage step of the value chain, we are devising methods that provide us with most effective and efficient ways possible to store materials.  We will be able to identify the proper items a consumer has ordered and in a timely manner collect these items from the warehouse and ship them within an allotted time frame to the consumer for their use. 

                The fourth part of the value chain is production/process control systems. In this instance, I believe the task is blended more into upcoming sections such as marketing and sales, since we are reselling used CD’s that have already been produced. There is another option that could be added in production. Perhaps, we could put packages together of certain singers, genres, or years, and sell them as a package. This could help inventory if they wanted to push certain items, and may in return, produce more revenue.

                The final four parts of the value chain are part of what is known as “Downstream Management”. They are: Finished Product Storage, Outbound Logistics, Marketing and Sales, and Customer Service. The finished product storage is where the CD’s are housed, and ready to be included in an order, for sale. The outbound logistics would be the shipping method, unless they are sold in person. The marketing and sales aspect would be the advertising and how the sales are made. This could be done in person on campus, but would most likely be more productive to have an online aspect of advertising on websites, and social networks. An online presence would also provide the tools to makes sales both buying, and selling. Finally is the customer service aspect. This would be in case there were any issues with the sale. This could include anything from not receiving an item or receiving a damaged item, to billing errors, or credit card disputes.

                In conclusion, a value chain is an extremely important tool, which can be used in the success of a company. There are many ways to improve it as a company and technology evolve.

** Please note that I found this question somewhat difficult because the example in the book was exclusively about a manufacturing company, which makes the value chain easier to describe in the eight stages, rather than the resale of a CD.