Value Chain AnalysisAUTOMOBILE INDUSTRY

PREPARED BY : KAPIL SHENDGE

Introduction

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.

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

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.

Value Chain for Automobile Industry

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

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. Toyota’s JIT

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

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

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

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.

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

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

Thank You