Integrated Value Chain Management

In the following integrated value chain management is defined and a framework is developed as synthesis of management concepts presented in subchapter 2.2. Key methods used in value chain management such as optimization or simulation are presented at the end of the chapter. 

To continue, an appropriate definition of integrated value chain management has to combine the characteristics of simultaneously managing volumes and values throughout the entire value chain in order to ensure companies profitability. Therefore, value chain management has to be defined in this work. 

Integrated value chain management framework is an essence of so far separated concepts in the value chains either focusing on managing supply, demand or values ... 

The first question targets an enhancement of supply chain management towards value chain management with integrated volumes and value planning. The second question is related to a specific industry type as basis to... 

The study provides valuable insights for research and industrial practice. At the beginning, the author reviews different management concepts in the value chain either demand, supply or value-oriented. The author proposes an integrated framework for value chain management as an interdisciplinary structure consisting of separated concepts. 

The management concepts focus on the primary activities in the value chain. Management concepts for support functions such as human resources, information technology or corporate finance are out-of-scope in this work. The integration of support management concepts into value chain management is an area for further research. 

Values in the industry value chain are subjects of financial accounting, profit and cost controlling as well as value-based management research. Out of the scope is the value chain support function of corporate finance concerned with getting required or investing excess financial resources in financial markets, which is not a core activity in the industry value chain and out of the scope in this work. The integration of value chain management with corporate finance is a potential area for further research. 

Concluding, existing definitions use value chain management as alternative term for supply chain management focusing on supply volume decisions to fulfil a given demand and minimize costs. Especially, value and sales decisions are not covered in an integrated framework. 

Value chain management is the integration of demand, supply and value decisions from sales to procurement using strategy, planning and operational processes. 

Returning to Porter s original value chain, how can company services and support functions like IT, HR or Finance be integrated into strategy, planning and operations as an extended value chain management framework ... 

Lee, H., Creating Value through Supply Chain Integration, Supply Chain Management Review, September/October, 2000, pp. 30-36. 

Research question 1 How can volumes and values within the value chain be managed in an integrated way ... 

Value-oriented management concepts provide the accurate basis for evaluation of volumes and profitability. Integrated management concepts in the value chain and decision support models need to be consistent with... 

McAfee/McMillan 1987 Milgrom 1989). Sales price and quantity decisions in value chains needs to consider the respective pricing mechanism applied in the market and reflect it in integrated management concepts. 

An integrated management concept for the entire value chain from procurement to sales would require integration of both concepts of minimizing costs for supply and maximizing turnover for demand. 

There is a lack of having an integrated concept of managing volumes and values across the entire value chain. The specialized concepts with focus either on demand and supply decisions or on value analysis have to be combined to an integrated approach. This integrated approach is required to manage a global commodity value chain end-to-end by values and volumes. 

Some authors already postulate to extend the focus of supply chain management towards integration with demand management and in some parts with value management... 

However, a focus shift from supply to demand would again not consider the overall profitability of the value chain leaving out supply volumes and values supply specifically in procurement. Concluding, a focus on either demand or supply is not sufficient and both have to be managed in an integrated way together with the resulting values. Therefore, the different... 

The framework is mainly based on the supply chain management framework of Rohde et al. (2000). Rohde s work is gradually enhanced to address the aspects of synchronized decision making within the value chain and the integration of supply, demand and value management concepts as shown in fig. 17. The framework is structured into the areas value chain, processes and methods. 

Value planning and the integration of company s profit and loss structure with supply chain management is not addressed often artificial penalty costs are applied in models to steer results instead of actual cost parameters from controlling... 

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