Discuss the two types of Value Chain activities – Primary and Support – and how they help create value by finding both “better” and “different” ways of performing these activities (apply your own organizational and/or SSM company experiences)
Value chain is defined in the text as the total of primary and support value-adding activities by which a firm produces, distributes and markets a product (Carpenter, 2008). Feel this definition is helpful for this discussion when reviewing primary and support they both add up for value chain and are value-adding activities for producing, distributing and marketing a product.
Primary activities include inbound logistics, operations, outbound logistics, marketing, sales and service (Carpenter, 2008). Inbound logistics include inbound shipment of top titles and warehousing (Carpenter, 2008). Operations includes server operations, billing and collections (Carpenter, 2008). Outbound logistics include: picking and shipment of top titles from warehouse and shipment of other titles from third-party distributors (Carpenter, 2008). Marketing and Sales includes: pricing, promotions, advertising, product information and reviews and affiliations with other websites (Carpenter, 2008). After-sales service includes: returned items and customer feedback (Carpenter, 2008).
Support Activities include human resources, accounting, and finance operations, technology and procurement (Carpenter, 2008). Text describes finance, legal support and accounting activities as part of firm infrastructure and value chain support activities (Carpenter, 2008). Human resources includes: recruiting, training, incentive system and employee feedback (Carpenter, 2008). As far as technology support activities include: inventory system, site, pick & pack procedures, site look & feel, customer research and return procedures (Carpenter, 2008). Procurement activities include: CDs, Shipping, Computers, Telecom lines, Shipping services and media (Carpenter, 2008).
Text describes that firms can create value with value-chain activities to either find better ways to perform the same activities or different ways to perform them (Carpenter, 2008). Additionally, tradeoff protection is when firms configure value-chain activities in different ways than competitors where its hard for rivals to imitate (Carpenter, 2008). Excellent example of this is Southwest Airlines where they deploy a single aircraft vs. many models and work from smaller markets and secondary airports to thwart major competitors traditional hub-and-spoke system as well as many other differentiators (Carpenter, 2008).
One StratSim example of tradeoff protection that comes to mind is the use of Radio Frequency Identification (RFID) vs. barcodes with union type shipping facilities. Firm A is looking to optimise efficiency and quality through lean manufacturing which has led to consideration of RFID for shipping and logistics as far as optimising this area of our value chain. As opposed to Bar codes RFID has very high read rate where 100+ tags can be read without line of sight which is not possible with RFID. This could decrease need for employees at union facilities which is significant concern with United Auto Workers Union. Discussions taking place which improves ergonomics of positions where package handlers require less physical labor and also discussion of training workers with RFID and other training for different value adding activities within production facilities to reduce potential layoff considerations.
Carpenter, M. A., & Sanders, W. G. (2008). Strategic Management: A Dynamic Perspective. Upper Saddle River, NJ: Pearson Prentice Hall.
Integrated StratSim Simulation Experience
RFID vs Barcode. (n.d.). Retrieved from http://www.atlasrfid.com/jovix-education/auto-id-b…