Value chain partners

Benefits of Engaging Value Chain Partners through Lifecycle Practices... 

Chaffey, Mayer, Johnston, and Ellis-Chadwick (2004) and Deise, Nowikow, King, and Wright (2000) suggested the modem value chain network may involve downstream value chain partners (suppliers and buy-side intermediaries), working directly to deliver core value chain activities to the upstream value chain partners or sell-side intermediaries. They suggested hoiSa strategicand non-strategic business partners may contribute to this value chain. 

The internal services component delivers the integrated demand chain/supply chain, where value chain partners work together to deliver maximum customer value in the most effieient and effective manner. Here, partners aim to deliver service quality and the serviee as a quality, financially accountable paekage. 

Supply capability is reviewed in the advanced levels with respect to the firm s core competencies and its value chain partners, and decisions made as to which partner should perform which process steps. In the most advanced levels, flexible response systems that do not interfere with overall supply chain efficiency are created. There is much lower variability in the network as all parties work together through an online extranet to instantly review what is occurring and where changes must be made. Constraints in the system are eliminated or under control as the end-to-end partners link their ERP systems in order to make visible what is occurring across the full network. 

As discussed in Chapter 2.2.2 a broad range of criteria have to be considered if an in-depth assessment of individual sites is required. In practice matters are further complicated by the fact that the majority of sites host plants from multiple value chains. In this chapter a uniform decision support tool is developed to ensure consistent evaluations in all instances requiring site assessments. To this end Chapter 4.1 introduces the field of Multiple Criteria Decision Analysis (MCDA). Two different families of tools that could be applied to the decision problem at hand are discussed in greater detail in Chapters 4.2 and 4.3 respectively. As the use of Data Envelopment Analysis (DEA) for multiple criteria decision problems has been proposed in literature, too, the method is introduced in Chapter 4.4. An evaluation model for specialty chemicals production sites developed in cooperation with the industrial partner is presented in Chapter 4.5 and insights from application case studies are reported. 

In launch and market development, finally, the art is to focus on the right market segments and customers with the right value proposition, to align the value chain to adopt your innovation, and to use partners appropriately. 

The company has changed its strategy and its underlying assumptions fundamentally in the course of the project. For example, it has learned that it needs to price the product based on long-term positioning rather than current cost, that it needs to build a plant in a low-cost environment, that value chain intermediaries will need an incentive to adopt its product, and that it is sometimes necessary to work with smaller attackers as initial commercialization partners to demonstrate proof of principle, create market pull, and get the big fish to adopt a new product. The increased focus, clear product positioning, and partnering has already resulted in a number of major market introductions over the past year. 

The team must also do a complete value chain analysis showing the suppliers, distributors, customers, end-users of the product, and where the organization will position itself in the industry. Furthermore, our position relative to competitive products must be established and analyzed. The team must also establish a basis of pricing the product, as well as the price itself The market plan should also include when the product introduction will occur, if there are plans to commercialize with a partner, what the sales force requirements will be, and a distribution plan for the product. 

Some recent discussion centers on the impact the New Economy will have on the structure of chemical companies. We believe that the Internet will contribute to the disaggregation of the value chain touched on above, opening up opportunities for chemical companies to take on board partners for those parts of the value chain that can best be served by others. However, given the size and global reach of chemical businesses, we also think that global business divisions will remain at the core of these network-type configurations for some time to come. 

The information gathered on transportation incidents has long-term value in addition to the immediate lessons learned. For example, this information may be useful for monitoring performance over time. It can be used to build up a database on transportation incidents. Finally, and most importantly, such information can provide statistical data for transportation risk assessments and improvement efforts. Trend analysis of causes of transportation incidents is vital to a management system that addresses major problems and sets priorities for risk reduction. This element should be part of each supply chain partner s transportation risk management. These risk reduction strategies are discussed in detail in Chapter 7. 

At the heart of most DM initiatives is a redefined relationship with the pharmaceutical industry. The pharma-company becomes the predominant partner in providing care, instead of merely providing the components of it, such as pharmaceutical products, drugs and the like. The relationship between the British NHS and pharmaceutical companies has never been really close in the same way that non-healthcare private sector manufacturers and service providers get close to their suppliers and see them as part of the value chain. 

Rather than adhering to the traditional linear flow, the new digiteil economy wUl reward those that are flexible enough to use inputs from their partners regardless of where they are in the linear process of manufacturing. In fact, the linear value chain has become a veilue web where each and every economic entity is connected to everyone else and where they may often function in a parallel or overlapping fashion. Electronic commerce then becomes an essential business tool to survive and compete in the new economy. 

Let s start the discussion with definitions. When the supply chain is extended to a network of trading partners, it is termed a supply network. When the emphasis of this extended supply chain shifts from cost to value, it is called a value chain. When it becomes more strategic to the company, focused outside-in to drive value-based outcomes, it is termed a value network. 

Not all value chain initiatives are successful. Failure often teaches us more than snccess. The most well-known case studies of failure are Coca-Cola s creation of Coca-Cola Enterprises, Walmart s introduction of RFID, and the launch of the Boeing 787. Each story is a testimonial that despite the hype and promise of new ideas, what lasts is the bnilding of trne value in the value network. It has to be based on a sustaining win-win value proposition with trading partners. 

Beech s (1998) demand-supply chain model, along with Comergent s (2003) demand chain model, have each progressed towards a value chain management model (Mudimigha, Zairi, Ahmed, 2004). Sampson (2000) demonstrated that service supply chains were bi-directional, and that communication between customers and suppliers, and vice versa, must occur. Thus, a partnering between participants occurred (Vokurka, 1998). Sampson also indicated bi-directional supply chains were typically short lived, but had just-in-time implications with inherent value-added expectations. To measure such information, new metrics tools have been devised. New methods to capture online measurement data (or Web... 

Where high levels of uniform IT systems, integration, communication, performance, and sophisticated assessment and delivery exist across the entire business and its partnering netwoiks, the business may approximate, or achieve, a service value chain network status. 

The service value netwoik in an e-pharmacy setting is hereby defined as acollaborative network of supply chain partners (such as pharmacists, drug companies, distributors, beauty care suppliers, health and natural product suppliers, medical practitioners) sales channels (Web site e-sales, direct over-the-counter sales, and referrals) and operational and network administration personnel, working with and serving the needs of its customers and its online e-customers. 

Interactions within the service value network can be viewed from an internal business perspective among supply chain partners in delivering and fulfilling customer orders, for example, a pharmacist replenishing out-of-stock items. On the other hand, the service value network responds... 

Value chain Chain-to-chain competition, seeking innovation throughout the chain Shared outcome arrangements are common Partners invest to develop capabilities for their part of the chain 4... 

A sound approach is to use capital recovery factors from the engineering economy discipline as practiced by industrial engineers. The approach evaluates the cash flow implications of potential investments in operations improvements. As described here, this approach should also ensure that supply chain partners relying on EAA would produce acceptable numbers. This is because decisions made at the individual process level will be consistent with building shareholder value as measured by EVA. 

Web services Supply chain applications delivered over the Internet. These reduce the cost and complexity of forming links between supply chain partners and customers for products in the chain. They use shared standards to speed the job of developing links. (Adapted from The Strategic Value of Web Services from the McKinsey Quarterly and Business Processes and Web Services by Alan Kotok)... 

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