Industrial value-adding services

Leading distributors offer a broad spectrum of these services. Brenntag, for example, as a full-line distributor of industrial and specialty chemicals, provides a one-stop shop of over 25,000 chemical products for more than 150,000 customers, combined with a broad range of related value-added services such as mixing, blending, repackaging, and technical services and support. 

Information integrity As indicated earlier in this chapter, the information about a shipment is as important, in today s supply chains, as the movement of the shipment itself. Since shipment information is offered to shippers and receivers as a value-added service, the effectiveness with which this information is provided to them must be monitored and measured. Systems to effectively capture, store, and provide shipment information are critical in today s freight transportation business models. The freight-transportation industry will continue to be an information-based industry. Therefore, meiinttiining high levels of information accuracy and integrity will continue to be au important measure of performance. 

In the race for Supply Chain 2020, the goals of system standardization will be less important. The supply chain leader will exercise power in the buying decision, and system selection will be more heavily based on industry expertise and value-added services than on system standardization. 

In order to guarantee a given QoS level to users in this heterogeneous scenario, telecommunication industry must cope with network/service failures that not only affect voice or data use but could also limit the success of recent value-added services, such as e-commerce and high-speed Internet access. Furthermore, wireless access networks play a central role in emergency response, including 911-like services, where network failures may become critical for safety. 

AT T provides telecommunication equipment and long-distance services to the telemarketing industry. To help its telemarketing customers for their site location decisions, AT T developed a decision support system (DSS) (Spencer et al., 1990). When the "800-service" was introduced in 1967, the cost of 800 -service determined their locations, since the labor cost was minimal. The Midwest, particularly Omaha (Nebraska), became the "800-cap-tial" of the world. However, in the 1980s, labor cost started becoming very significant. AT T provided the decision support system (DSS) as a value-added service to its customers. 

The third column gives an estimate of the size of these various sectors in terms of value added in billions of dollars. The value added is simply the difference between the output (goods and services) and the input (labor, land, and capital) of the industry. The total value added, 8,759.9 billion in 1998, is the gross domestic product (GDP) for the entire economy. This is the latest year that official government figures are available at the time of this writing. 

The ultimate goal of all economic activity is to supply final products (including goods and services) for consumption. To produce a final product, input from several industries is required. The net contribution to production by a particular industry is termed value added. It can be measured as the difference between the industry s total sales and the cost of goods and services it purchases from other industries. The summation of all value-added contributions made by all industries as well as by individuals and the government equals the gross national product (GNP). The GNP is then the value measured in dollars of all such production for any particular year. 

Although the GNP was a measure of output in the past, in the last two decades, the gross domestic product (GDP) has come to be viewed as a more realistic measure of the economic output of the United States or any nation. By definition, the GDP is the total output of goods and services produced by labor and property located in the United States or any nation and valued at market prices. For the economy as a whole, the total of all final uses of commodities equals the total value added by all industries, or GDP. 

The sector designated as the consumer industry sells 60 billion worth of goods to itself, 7 billion to the basic industry sector, nothing to the energy sector, 19 billion to the service sector, and 180 billion to final demand. Its total output is 266 billion [Eq. (4.3) and (4.4)]. The consumer industry sector buys 60 billion from itself, 80 billion from the basic industry sector, 2 billion from the energy sector, and 26 billion from the service sector. Its net contribution to the production or its value added is 98 billion. 

As would be expected, final demand is a high percentage of total output for the consumer industry sector, and value added is a high percentage of total output for the service sector. Basic industry sells most of its output to itself and also buys more from itself than from other sectors. This pattern is repeated for all sectors except the consumer industry sector, which buys more from basic industry than from itself W is 87 billion. 

In Table 4.4a for a particular industry, each row shows the dollar value of goods and services (output) going to each of the 85 industries and to final demand. Each column shows the dollar value of an industry s consumption (input) of intermediate goods and services from every industry and its value added. The 85 industries can be grouped into 11 categories as shown in Table 4.5. 

Table 4.9 is obtained by using Eq. (4.8). For example, the direct requirement of the energy industry for service is 0.185, which is obtained by dividing 12 billion of service industry input by the total output of the energy sector, 65 billion. Table 4.9 shows that in addition to service costs of 18.5 cents, the energy sector needs 35.4 cents of input from itself, 44.6 cents of value added (mostly employee compensation), and 1.5 cents from basic industry to produce 1 of output. 

Value Added. Activity of industry is affected by corrosion through inputs such as costs of research and development and technical services. When the coefficients (industry indicators) in the lO matrix are modified to reflect the absence of corrosion, the lO matrix can be used to indicate the inputs needed to produce... 

Value added is defined as the incremental value added by sectors or industrial processes, usually measured by the price differential between total cost of the input and price of the output (including services). This is also called gross value added. A net value added can also be defined by subtracting expenditures for depreciation from gross... 

This analytic balanced scorecard framework, originally developed by Kaplan andNorton (1992), is displayed in Figure 12. It delivers the enabling basis from which business industry blocks, like individual pharmacies, may be translated into powerful e-service networks ofmany interlinked data-sharing pharmacies. The business intelligence delivered by such an e-service network and its value adding systems is considerable. 

Service Value Networks Delivering Competitive E-Services by John Hamilton, addresses service value networks as a key pathway to establishing and likely retaining future strong competitive positioning within a service industry sector. He defines service value network as llie flexible delivery of a service, and/or product, by a business and its networked, coordinated value chains such that a value-adding and target-specific service and/or product solution is effectively and efficiently delivered to the individual customer. The procedure to research and develop a service value network is described. 

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