Value Chain

A value chain is defined as “A series of activities that includes inbound logistics, warehouse and storage, production and manufacturing, finished product storage, outbound logistics, marketing and sales, and a customer service. Every finished product that you can buy from a store has been through a value chain. Cd’s are a great example. The value chain starts at raw materials. Cd's are composed of three basic raw materials: a polycarbonate plastic base, a thin aluminum coating over that base, and then a clear protective acrylic coating. Since I will be in the business of selling used Cd’s, my value chains will not include raw materials. I would buy the used Cd’s from a wholesale distributer; have them shipped into a warehouse for storage.  I would then focus on the customer service and marketing/promotions planning for my business. Once customers start buying I would focus on outbound logistics. I would have a distribution planning system set up to distribute the final product. By buying and selling used Cd’s, I am cutting out the inbound logistics process and devote all of my focus to downstream management.