Value Chain

Posted in Operations and Supply Chain Terms, Total Reads: 2674

Definition: Value Chain

It is a business process model which shows how input materials gets value addition and comes out as finished product. Every process in the system gets some or other value addition which increases its value.

Value chain analysis can be done for finding out costing at every stage of the chain.

Eg: Car manufacturer buy basic input raw materials which are used to assemble various components of the car. At each stage this raw materials adds value when they are converted in some assembly. Finally all the assemblies are added together to produce a car which would cost more than the total cost of all the raw materials added.

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