VALUE CHAIN ANALYSIS IN A GLOBAL CORPORATION

Abstract

Value chain thinking has been developed over the last decades. Nowadays the value chain could be defined as a network of connected and interdependent organizations from suppliers to wholesalers, mutually and co-operatively working together to control, manage and improve the flow of materials and information from suppliers to end users and vice versa. The purpose of value chain is to provide products to customers with the level and quality of service that they require and to do so at less cost to the total value chain. Today’s value chains are flexible and fast responding.

Value chain management has become more important during the past decades because the chain is usually global and very complex. Value chain management is responsible for the entire supply process, beginning with the operations of the raw material supplier and ending with the final customers. For the value chain to be managed successfully measurement is needed that indicates how effectively the chain acts.

The aim of this study is to analyze current situation of a global value chain and make a questionnaire which helps to find the nodes of the value chain that need improvement. The questionnaires contain lead time, inventory and service level information and financial information about the companies that are members of the value chain. The results are discussed in the empirical part of the study.