Review Questions
- What Is Your Understanding of a Value Chain and Its Relationship with The Supply Chain? Select A Big Box Retailer and Explain/Depict Its Supply Chain, Value Chain, And Extended Value Chain
According to Lee & Yang (2000), value chain refers to a series of functions that companies engage in to deliver a product or service that satisfies the market demand and specifications. Value chain possesses a significant relationship with the supply chain. This is because the value chain involves a company activity that aims at adding value to the acquired raw materials for production of new products and services meant for consumers consumption. On the other hand, the supply chain is represented by steps of activities that are necessary for availing the resulting product or service to the market or consumers.
Best Buy Big Box Retailer
This is a multinational retailing business company that deals in selling of electronics, cell phones and home appliances. This retailing business to consumer retailing company has adopted a supply chain that is based on the needs of its customers rather than the volume of sales (Randall et al, 2011). To achieve this, the company has a variety of products in its segment stores. Nevertheless, the company engage its customers about their products in relation to their needs.
In relation to the value chain, the company provides for warranties for its products. Nevertheless, information about their product’s manufacturers is also provided. To access a wider scope of customers, Best Buy retailers have partnered with several business partnerships from various geographic regions as an extended value chain. This has facilitated access to the retailer’s products by customers in regions where it does not operate.
- Explain Electronic Procurement and Just in Time Purchasing. Also, Briefly Explain How Electronic Procurement Tools Can Benefit Just in Time Purchasing.
Electronic procurement also commonly known as e-procurement refers to the purchase and selling of goods and services within the business to business, business to government and business to consumer models through the use of internet platform and other related inter-linking information technology network platforms or systems such as enterprise resource planning. On the other hand, just in time purchasing relates to purchasing of goods at the exact time when they are needed by a customer. In simple terms, this strategy involves a supplier organizing for appropriate purchases upon receiving orders from a customer. JIT purchasing saves companies and suppliers inventory costs that would be associated with the product.
Electronic procurement tools form an essential foundation for achieving the just in time purchasing goals. The e-procurement tools benefit the JIT purchasing through the provision of a timely and spontaneous medium of making product orders. Internet and information technology network systems facilitate timely making and acknowledgement of orders by customers and suppliers respectively. Nevertheless, since JIT purchasing aims at minimizing the inventory costs and other related costs associated with the product purchase process, e-procurement aids in the realization of this objective through prevention of duplicate expenditures and paper-work costs. E-procurement tools also benefit JIT purchasing by limiting chances of errors associated with the process of purchase. Finally, e-procurement facilitates the speed of transaction during the just in time purchasing thereby improving business confidence and trust.
- Discuss the Differences and Key Objectives for The Following:
- Involving purchasing after completion of the new product development process
This strategy relates to the involvement of suppliers’ contributions and services upon completion of the process of developing a new product. It possesses the key objective of providing information that relates to whether the product specifications and design meet consumer demands. Additionally, this strategy provides producers with information concerning the number of products that are desired by the intended market.
- Involving purchasing throughout the new product development process
According to this strategy, purchases and related services from supply chain stakeholders such as suppliers are incorporated during the entire process of developing a new product. It aims at incorporating suppliers’ contributions during the entire process of new product development. It serves the main objective of constantly updating the producers of any emerging change in customers product specification preference. As a result, these changes are adopted before introducing the final product to the market for consumption. Additionally, this strategy aims at informing the producers of other emerging technologies and products from competitors within the industry.
References
Lee, C. C., & Yang, J. (2000). Knowledge value chain. Journal of management development.
Randall, W. S., Gibson, B. J., Defee, C. C., & Williams, B. D. (2011). Retail supply chain management: key priorities and practices. The International Journal of Logistics Management.