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Value chain analysis Model for automobile Industry

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  2. 2. Introduction
  3. 3. What is Value Chain The primary value chain activities are: Inbound Logistics: the receiving and warehousing of raw materials, and their distribution to manufacturing as they are required. Operations: the processes of transforming inputs into finished products and services. Outbound Logistics: the warehousing and distribution of finished goods. Marketing & Sales: the identification of customer needs and the generation of sales. Service: the support of customers after the products and services are sold to them.
  4. 4. Continued These primary activities are supported by: Infrastructure: organizational structure, control systems, company culture, etc. Human resource management: employee recruiting, hiring, training, development, and compensation. Technology development: technologies to support value-creating activities. Procurement: purchasing inputs such as materials, supplies, and equipment
  5. 5. Competitive Advantages of Value Chain Analysis Cost advantage: by better understanding costs and squeezing them out of the value-adding activities. Differentiation: by focusing on those activities associated with core competencies and capabilities in order to perform them better than do competitors.
  6. 6. Value Chain for Automobile Industry
  7. 7. Inbound Logistics Here goods are received from a company's suppliers. They are stored until they are needed on the production/assembly line. Goods are moved around the organization. Purchases their raw material from all around the world, In order to maximize their availability of raw material
  8. 8. Operations This is where goods are manufactured or assembled. Individual operations could include organizing the parts to make new cars & the final tune for a new car's engine. Industries are known for their reliability which comes from efficient operations. For eg. Toyotas JIT
  9. 9. Outbound Logistics The goods are now finished, and they need to be sent along the supply chain to wholesalers, retailers or the final consumer Many Manufacturers manage their own Showrooms in different countries Sometimes even raw parts are supplied to different Manufacturing units
  10. 10. Marketing and Sales This area focuses strongly upon marketing communications and the promotions mix Communication channels can be : 1. Newspaper Advertisements 2. TV commercials 3. Social Media Marketing 4. Demo Cars 5. Exclusive Showrooms
  11. 11. Services Large Network of Workshops available for Services This includes all areas of service such as ; 1. Final Checking 2. After Sales Services 3. Complaint handling 4. Training 5. On-call Services
  12. 12. Support Activities Procurement : This function is responsible for all purchasing of goods, services and materials Aim is to secure the lowest possible price for purchases of the highest possible quality. Technology Development : Important source of competitive advantage. Companies need to innovate to reduce costs and to protect and sustain competitive advantage.
  13. 13. Support Activities Human Resource Management : Employees are an expensive and vital resource. It Manages recruitment and selection, training and development, & rewards and remuneration. For eg. Toyota motors consider their employees as HUMAN CAPITAL. Infrastructure : This activity includes corporate or strategic planning. Manufacturing plants, Machineries, etc
  14. 14. Competitive Advantages Cost Advantage Cheaper Supplier Efficient Assembly Line Brand Owned Showroom Differentiation Use of JIT approach Efficient Operations Management System CRM , HRM & MIS Lean Manufacturing Innovative Marketing Strategies