Integrated Value of the Supply Chain

This essay examines the integrated value of the supply chain, covering core processes, development stages, business integration models, and its application in the hospitality industry. It explores the concepts of value chain, virtual value chain, and their impact on business profitability and customer satisfaction. The essay also analyzes the Porter value chain model and its relevance in adding value to products and services.

Integrated value of the
supply chain

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Core processes of the supply chain, value chain and virtual value chain...............................1
Development stages involved in supply chain management..................................................3
Business integration models...................................................................................................4
Approach of value to the hospitality industry........................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Integrated value of supply chain and its management is crucial for every business in order
to manage operational activities and other resources such as raw material management,
inventories, production process etc. This will help business to produce quality products and
services for customers in order to increase competitive advantage effectively. The report is
totally based on value chain model and supply chain management especially. It will cover
process of supply chain management with value and virtual value chain. In addition to this,
development stages involved in business to improve SCM and examples of business integration
models which support integration of supply chain in firm. Finally, the concept of approach of
value to hospitality industry is also explained in order to evaluate benefits to business.
MAIN BODY
Core processes of the supply chain, value chain and virtual value chain
Supply chain management is important for every business in order to manage relationship
with suppliers that helps to provide raw materials of better quality in order produce effective
products and services for customers in the market Aung & Chang, (2014). This will help to
enhance customer satisfaction as well as experience which increases the profitability and
production.
Supply Chain: Supply chain management is necessary for businesses in order to manage
and control flow of products and services which also include movement of raw materials and
storage effectively. In this, work in process related to inventory and finished goods is also
included. It can be described as a network in simple words in between a business and its
suppliers that helps to produce and distribute a particular product and service which represents
steps to get product to consumer in the market. Supply chain management is also described as a
broad range of different activities required to make strategies, plan and execute flow of product
and service from acquiring raw materials and things which are important in the process of supply
chain management.
Value chain: Value chain can also be described as set of activities that a business
operates in a specific industry in order to deliver valuable products and services to customers in
the market effectively. The Value Chain Model is developed by Michael Porter which helps to
describe process in which a company receives raw materials and add value to them in order to
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create finish and complete products and services which are delivered to consumers in the market
according to their needs.
Integrated values: Value is the amount that buyers are willing to pay for what a business
provides them. In addition to this, value is measured by total revenues, reflection of the price a
firm's products command and the unit it can sell. A company is profitable if the values it
commands exceeded the cost involved in creating a product or service effectively. It can be said
that value chain is integrated with the values of supply chain management in terms of quality and
effective products as well as services. Customers in the market expects quality products from the
businesses and ready to pay for that. In this respect, value chain or process will help to add value
in products and services that helps to deliver quality services and goods in the market which
helps to increase profitability and production Beske & Seuring, (2014). This will help company
to build a competitive infrastructure and supply with measurement of demand effectively.
Virtual value chain: The virtual value chain was created by Jeffrey Rayport and John
Sviokla in the form of a business model which helps to describe dissemination of value generates
information services through an extended business. This will also support physical value chain of
procurement, distribution, manufacturing and sales of traditional businesses effectively. It can be
said that in today's digital information system and technology world, virtual chain model is
crucial for businesses that it helps to integrate information and data to operational activities in
order to drive production and profitability.
Integrated values: There are a lot of procedures that consist of physical value chain such
as operational activities, raw materials, delivery, production and sales, marketing and other
services involved in company. Information technology has changed the views of looking at value
chain and introduced the concept of virtual value chain effectively. The main concept of virtual
value chain is to look at current internet penetration which provides addition to existing value
chain efficiently Chen, Preston & Swink, (2015). The information provided by virtual value
chain is crucial as well as important for business in order to optimise it for performance at each
stage of operations. This will help to improve customer experience with brand and enhance same
through new products and services offered in the market.
Thus, it can be said that value chain and virtual value chain; both are important for
business in order to manage and control effectiveness of production process in order to produce
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quality products and services. This will help to increase the profitability which leads towards
achieving goals and targets effectively.
Development stages involved in supply chain management
The following are some basic components of supply chain management. The first stage in
supply chain management is known as plan. A big piece of SCM planning is developing a set of
metric in order to monitor the supply chain so that it is efficient, costs less and delivers high
quality and value to consumers in the market. It can be said that supply chain management is
crucial for business as it helps to manage inventory at different levels. A business should try to
take advantage of supply chain management in order to increase customer satisfaction and
loyalty Christopher, (2016). Here are some elements described as below which should be
considered at the development stage:
Plan: There are a range of activities involved in planning which helps business to decide
operations strategy in order to take major decisions regarding supplier. Businesses must weigh
the benefits and disadvantages of different options presented by international supply chain
effectively. The process of production must be analysed by the firm in order to manufacture
products and services.
 Make to stock (awaiting consumer order, produced and stored)
 Make to order (response to an order provided by customer)
 Configure to order (manufacturing of a product and completed after the order is received
by customer)
Planning will help to map out a network for manufacturing facilities and warehouses.
This will also provide determination of production level and transportation in between various
sites.
Source: Source in supply chain management includes organising procurement of
components and raw materials. Procurement can be described in the form of acquisition of goods
and services at best possible price, in right quantity and at the right time. Supplier performance
should be addressed and payments to them made when it is appropriate Christopher & Ryals,
(2014). The network of suppliers involve working with this network in order to manage
inventories and business assets to assure all the requirements are me effectively.
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Make: The stage is considered with enabling schedule for production activities,
packaging, release and testing of products. Business should manage rules for performance and
data which must be stored, and regulatory compliance.
Deliver: The stage of delivery encompasses every step from assessing requirements of
customers to select strategies for distribution and transportation options. Inventory and
warehouse management is also important for a service provider in order to manage and control
these tasks effectively.
Return: Return is associated with defective products or services returned by any
customer. The process involves identification of product condition, authorising return scheduling
of product replacement and providing refunds to consumer Gattorna, (2015). There are some
rules should be established by a business for product returns, performance and cost monitoring
and management of inventory of returned item effectively.
Supply chain management can be improved from adopting such techniques and policies
regarding products and services which will help to manage and control inventories at different
levels. This will also help to manage the cost of product and service in order to enhance
profitability and production which will help to achieve desired goals and objectives.
Business integration models
It can be said that there are many theories and models produced by different authors in
order to understand the value and importance of supply chain management that helps to improve
effectiveness of production and profitability. This will also help to increase operational activities'
effectiveness in order to produce profitability and production effectively.
Value chain model:
The value chain model is a sophisticated model which aims towards reducing value
adding activities in business integration effectively. The process looks at how resources and
operational activities are organised in order to find and eliminate redundancies. The model views
a series of activities which are interlinked and process rather than set of independent
departments. Business integration refers to the link between different activities and process of
company in a way that value is added efficiently Gereffi & Fernandez-Stark, (2016). The Porter
value chain model will help to receive information regarding raw materials and adding value to
them in order to create finished products to sell them to customers in the market. Businesses
change their inputs into outputs which is a process where they are able to add value to their
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products and services in order to deliver quality products to customers in the market. The more
businesses will create value, the more they will earn profits. Adding more value to customer will
also help to gain competitive advantage which is very important for the firm in order to compete
others in the market effectively and efficiently.
Elements in Value chain model
Primary activities
These activities are directly connected with physical creation, maintenance, sale and
support of products and services.
Inbound logistics: The process is considered with receiving, storing and distributing inputs
internally and effectively. Supplier relationship management is a key factor here which creates
value for business Mangan, Lalwani & Lalwani, (2016).
Operations: Operational activities are related to the transformation activities such as changing
inputs into outputs which are also sold to consumers in the market. Here operations create value.
Outbound logistics: These are the activities which includes distribution activities in which the
product or service is delivered to customer such as collection, distribution, storage and refunds.
Marketing and sales: The process involves marketing activities such as promotional which is
used to persuade customers to purchase products from firm instead of any other company.
Benefits and communication with customer creates value here in terms of a source.
Services: Services are the potential activities related to the maintenance of product or service to
customers, once it has been purchased.
Support activities
It is analysed that supporting activities will help business to manage and control certain
activities at each primary level. For an example, procurement support operation with certain
activities also support sales and marketing with managing other activities.
Procurement: The business does to get resources which it needs to be operate. This will include
negotiating prices and finding vendors effectively.
Human resource management: Human resource management is a crucial aspect of business that
it helps towards providing recruitment, training needs, rewards and motivational activities. This
will help to create a clear advantage for firm with good practices efficiently.
Technological development: It can be said that technology plays a crucial role in business in
order to increase effectiveness of operational activities and production Monczka, Handfield
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Giunipero & Patterson, (2015). The firm should use latest and innovative technologies that helps
to drive business performance and profitability.
Infrastructure: Infrastructure of the business should support additional activities and operations
in order to maintain daily operational activities such as accounting, administrative, legal and
management.
Step 1: Identify sub-activities for each primary activity
It can be said that direct activities create values by themselves. For an example,
marketing and sales activities promote advertising and selling online activities which helps to
improve production. Indirect activities helps direct activities to run smoothly and effectively.
Management of sales force and keeping record of consumers. Quality assurance activities ensure
that the direct and indirect activities are meting their standards.
Step 2: Identify sub-activities for each support activity
The determination of sub-activities is important for business in order to create value
within each primary activities with effective management of human resources, technologies,
procurement and other supporting activities effectively. The evaluation of work done by HR and
other departments will help to add values.
Step 3: Identify Links
Identification of links refers to the finding connection between all the activities that helps
to add values in operations. This is a time consuming step but it will help to enhance competitive
advantage. For an example, there is a link between sales force and sales volume.
Step 4: Opportunities to increase value
All the sub-activities should be reviewed and links as well in order to make changes
which are appropriate and suitable for the firm that helps to maximise values to customers. It will
also help to increase business production as well as profitability Ptak & Schragenheim, (2016).
Thus, it can be said that there are different theories, concepts and models are proposed by
many authors regarding creating value for the firm in order to enhance its effectiveness and
profitability.
Approach of value to the hospitality industry
It can be said that hospitality industry network is rising day by day due to the effective
tourism within nation effectively. In addition to this, hospitality industry requires effective
supply chain management that there are many resources such as raw material and other things
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are important for firm in order to deliver products and services to customers. This will help to
increase satisfaction and profitability for the business. The hospitality business is a broad
category within services are requires such as lodging, theme parks, event planning, cruise line,
transportation and other activities related to the field effectively Ross, (2015). In addition to this,
there are so many approaches and models are described in this context that services are necessary
for a business in order to run operational activities smoothly that helps to drive production and
profitability. In addition to this, there are some certain models used above such as Michal Porter
value chain analysis which helps to add values to products and services as well as customers
effectively.
The model is also useful for Hospitality business that they also require services and
products from suppliers in order to manage and control operational activities effectively. In
addition to this, the model will also help to deliver goods and services according to the needs and
requirements of customers in the market which will help to enhance production and profitability.
For an example a hospitality business such as Hilton Hotel, London requires a lot of resources
and activities in order to deliver quality services which is the most important part of their
business Rushton, Croucher & Baker, (2014). The concept is something else that a business
requires resources and values to its products and services in order to satisfy needs of customers.
In respect to this, it can be said that value added services are also important for Hilton hotel in
order to manage its customer base and feedbacks in order to promote business as well as its
activities that helps to enhance profitability.
Value chain model will help business to add value to their products and services such as
effective machineries and decorated rooms, clean and clear toilet with all the necessary
accessories in order to increase satisfaction of customers. The model views a series of activities
which are interlinked and process rather than set of independent departments. Business
integration refers to the link between different activities and process of company in a way that
value is added efficiently. Adding more value to customer will also help to gain competitive
advantage which is very important for the firm in order to compete others in the market
effectively and efficiently Stadtler, (2015). This will help to enhance effectiveness of employees
as well as resources in business which will provide significant benefits to the firm in terms of
gaining competitive advantage that helps to enhance profitability a production. Thus, it can be
said that value chain model and different approaches will help to enhance value towards products
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and services which will help to improve and develop quality. This is a important aspect from the
customer's point of view which should be fulfilled by business in order to increase customer
loyalty as well as satisfaction Wisner, Tan & Leong, (2014). This will also help to improve
business function that helps to achieve desired goals and objectives effectively.
CONCLUSION
It can be concluded from the above analysis that Supply chain management is necessary
for businesses in order to manage and control flow of products and services which also include
movement of raw materials and storage effectively. It is analysed that a business is profitable if
the values it commands exceeded the cost involved in creating a product or service effectively.
Value chain and virtual value chain both are important for business in order to manage and
control effectiveness of production process in order to produce quality products and services.
Different techniques and policies regarding products and services which will help to manage and
control inventories at different levels Yu, Chavez, Feng & Wiengarten, (2014). The value chain
model is a sophisticated model which aims towards reducing value adding activities in business
integration effectively. There are different theories, concepts and models are proposed by many
authors regarding creating value for the firm in order to enhance its effectiveness. Finally, the
concept is something else that a business requires resources and values to its products and
services in order to satisfy needs of customers.
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REFERENCES
Books and Journals
Aung, M. M., & Chang, Y. S. (2014). Temperature management for the quality assurance of a
perishable food supply chain. Food Control, 40, 198-207.
Beske, P., & Seuring, S. (2014). Putting sustainability into supply chain management. Supply
Chain Management: an international journal, 19(3), 322-331.
Chen, D. Q., Preston, D. S., & Swink, M. (2015). How the use of big data analytics affects value
creation in supply chain management. Journal of Management Information Systems,
32(4), 4-39.
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Christopher, M., & Ryals, L. J. (2014). The supply chain becomes the demand chain. Journal of
Business Logistics, 35(1), 29-35.
Gattorna, J. (2015). Dynamic supply chains. London: Pearson Education Limited.
Gereffi, G., & Fernandez-Stark, K. (2016). Global value chain analysis: a primer.
Mangan, J., Lalwani, C., & Lalwani, C. L. (2016). Global logistics and supply chain
management. John Wiley & Sons.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and
supply chain management. Cengage Learning.
Ptak, C. A., & Schragenheim, E. (2016). ERP: tools, techniques, and applications for integrating
the supply chain. Crc Press.
Ross, D. F. (2015). Distribution Planning and control: managing in the era of supply chain
management. Springer.
Rushton, A., Croucher, P., & Baker, P. (2014). The handbook of logistics and distribution
management: Understanding the supply chain. Kogan Page Publishers.
Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and
advanced planning (pp. 3-28). Springer, Berlin, Heidelberg.
Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: A
balanced approach. Cengage Learning.
Yu, W., Chavez, R., Feng, M., & Wiengarten, F. (2014). Integrated green supply chain
management and operational performance. Supply Chain Management: An
International Journal, 19(5/6), 683-696.
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