Value Chain

A value chain can be conceived at two levels: first, at the level of the firm, the value chain is a series of primary and support activities that acquire and process inputs I order to create value. Second, at an industry level, the value chain describes the linkages between the different firms operating in the same supply chain. Its significance for procurement and supply chain management is not limited to the fact that it proposes that participants in the same supply chain are united in a common value stream. The value chain also identifies inbound and outbound logistics as primary activities in creating value for the enterprise. Value chain analysis implies a review of the organisation’s key activities to identify opportunities to increase margins through a focus on a range of cost drivers. See also Costing, Activity Based.

« Back to Glossary Index

Discover the world’s largest Glossary of Procurement terms

With over 800 Procurement specific terms (and growing) you will find everything you need to know or thought you knew about the Procurement function. Our aim is to provide you with a comprehensive list collated from the Comprara Groups hub of training and consulting source materials.The Procurement Glossary has been compiled by industry expert Paul Rogers.