The Challenges of Supply Chain Profitability

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Running head: Supply Chain Profitability The Challenges of Supply Chain Profitability Graduate School of Management Procurement and Contract Management Outline I. Introduction II. Value Chain Analysis A. Definition B. Importance C. Redesign III. Value Chain Reference Model A. Purpose B. Use C. Impact IV. Conclusion A. Effects upon organization B. Impact upon management Abstract This paper describes the challenges of supply chains management. It examines the various areas that contribute to and organization 's strategic planning operations to enhance its profitability. It identifies the various elements of value to supply chain operations. More importantly, it provides innovative ideas of forming…show more content…
Likewise if managers use organizational learning they promote a stream of dialogue which opens the door to various types of communication, such as questioning, analyzing mistakes, and feedback, which all facilitate the risk management process (p.4). The Contribution of Value and Economic Value Processes Wang and Ahmed (2005) defined the value chain as a tactical method or tool of value-added activities that might be common in a firm. The use of this strategy instructs organizations to identify and evaluate “what its precise products are, and to determine exactly what they do. (p. 322). The perspective (Wang & Ahmed, 2005) of the value chain analysis was developed by Michael Porter, who fashioned the value-adding processes that might be common in an organization. Porter’s theory served to identify and evaluate the value of firms grouped together to form distinctive capabilities and resources (p. 322). Another perspective of value was theorized by Bowersox, Closs, and Cooper (2006), which they coined as economic value. Economic value builds on economy of scale in operations as the source of efficiency (p. 254). Further, Bowersox et al. perceived that “Economy of scale seeks to fully utilize fixed assets to achieve the lowest, total landed cost” (p. 254). Likewise, economic value operates to create efficiency of product/service, and the end-result is economic value at a high quality and low price to customers (Bowersox, 2006, p. 254). Importance of
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