Over the last 20 years, with the growth of industrial operations, there has been a need to re-evaluate the concept of the value chain, developed in 1985 by Michael Porter.
The essence remains the same. In other words, the value chain continues to represent the set of activities an organization performs throughout the entire production cycle; from customer service and supplier contact to final distribution. However, along the way, some things have changed with time and technology.
The value chain, through its set of activities applied to the production process, has the power to boost customer satisfaction, making their experience unique and delightful. Therefore, when this is achieved, it is possible to charge more than your competitor because you deliver more than they do. The value is intangible! And it is the value chain that makes this difference.
Whether in the food, mining, sanitation, beverage, or other sectors, managing the supply chain and operations inevitably involves process optimization to increase operational efficiency. With that said and the concept of the value chain clarified, let's look at the challenges.
Value Chain – Main Challenges
To ensure decision-making is assertive, fast, and cost-effective in the era of technology and digital transformation, it may seem trivial to talk about data automation software; however, if your business does not yet work with this tool, that is your first challenge: implementing software that optimizes and automates your entire Value Chain.
Other aspects to which integrated systems contribute, especially for procurement managers, include:
- Identification of bottlenecks
- Optimization of risk management
- Integration of the operational chain
- Creation of a collaborative environment
- Enhanced customer experience with direct access to information
- Management of processes and external factors that critically impact the business
These are just a few areas where a digital integrated system can assist throughout the operational lifecycle, increasing management power and reach in a connected and flexible manner.
Opportunities
In addition to what has been discussed so far, an optimized value chain creates new opportunities and fosters transparency. This model adds even more value to the business and makes decision-making "cleaner."
Reverse logistics is another factor reshaping the perspective on the value chain process. Increasingly present and active in the production process, any company or organization not yet attentive to the influence and legislation surrounding reverse logistics in the value chain faces an urgent obstacle to overcome.
Beyond legal compliance, reverse logistics can reduce water consumption by up to 30%, depending on the activity, and can also increase productivity by around 20%.
The value chain is a two-way street. It generates profit. It cuts costs. It reduces environmental impact. It increases productivity. It enhances the image of the brand, company, or organization. It aids in supplier management and negotiations, among other benefits.
It is a cycle. Driven by digital transformation and integrated planning, operations, engineering, monitoring, and management solutions, it delivers tangible results throughout the entire value chain cycle.
Digital transformation demands an integrated system that connects the entire operational chain from end to end!
Orchestrating operations and managing process efficiency becomes much easier with an automated system. Embrace the challenge of digital transformation. If you need help, rest assured that you can count on us!
