In today’s world businesses have become extremely complex. The interplay of the three C’s viz. consumers, competition and convergence has thrown upon the organizations all over the world with new challenges. The turbulent process of turbulence coupled with economic sensitivity to external environment has created the highest degree of uncertainty and unpredictability to business processes. To top it all, globalization effect has shifted the balance of power in the favor of customer, thought it may have opened a plethora of opportunities for everyone, in the form of choice and variety. For many reasons, pressures of competitive forces have enhanced product changes, supercharged by shortening technology and product lifecycles. Management of value chains in such a highly dynamic economic environment has become very critical for survival as well as growth of organizations. The very definition of ‘Value’ has also undergone many changes. In order to combat risks and challenges, round the globe organizations are reorganizing and streamlining their value chains, and redefining the rules of economic and trading relationships across the value chain.
Thus value chain becomes an integral part of any business operation for achieving efficiency thereby profitability for the firm. Thus the value chain framework helps in analyzing the various activities through which firms can create value and competitive advantage. Thus state of the art value chain is obtained for each activity taking place in the firm. Collaboration on product designing and development is carried out among all value chain participants along with web based applications for product development. Supply chain itself is changed by strategic decisions taking into consideration cost, quality and delivery requirements of customers.
In manufacturing section value is added by collaborating with chain members and by applying of lean techniques for better responsive nature to the continuously changing market. This is also done by reducing the cycle time, on time deliveries and productivity. Selling value addition is done by means of transparent data transfer among the value chain partners with regard to market forecast and sales data.
In this report, we look at the detailed concepts of value chain analysis, its importance along with its application. We also look at a case study of Indonesia’s cocoa bean value chain and see what their trouble shoots were and how it can be overcome.