Conceptualized organization of activities an organization performs to provide value to their customers.
Value Chain Parts
1. Inbound Logistics 2. Operations Activities 3. Outbound logistics 4. Marketing and sales 5. Service
"Receiving, storing, and distributing the materials an organization uses to create the products and services it sells."
Transform inputs into final products or services.
Distribute finished product or service to customers
Marketing and sales
Help customers buy the products or services the organization provides.
Provide post-sale support to customers
Allow the five primary activities (value chain parts) to be performed effectively and efficiently.
Support Activities Outline
1. Firm Infrastructure 2. Human Resources 3. Technology 4. Purchasing
Firm Infrastructure Activities
"Accounting, finance, legal and geneal administration activities that allow an organization to function."
Human Resources Activities
"Recruiting, hiring, training, and providing employee benefits and compensations."
Improve a product or service.
"Procure raw materials, supplies, machinery, and the buildings used to carry out the primary activities."
A manufacturing organization interacts with its suppliers and distributors. Value chain is a part of this.
How an AIS can add value to an organization
1. Improving quality & reducing costs 2. Improving efficiency 3. Sharing knowledge 4. improving the efficiency and effectiveness of its supply chain 5. Improving the internal control structure 6. Improving decision making
"repetitive, routine, understood well enough to be delegated"
incomplete decisions need for subjective assessments; can be computer aided
"nonrecurring and non-routine, require judgment and intuition. "
effective efficient performance of tasks
effective and efficient use or resources
establishing objectives and policies to accomplish objectives.
adding features or services not provided by competitors
be the most efficient producer
variety-based strategic position
providing a subset of the industry ex. Jiffy Lube only oil changes
needs-based strategic position
trying to serve most or all of the needs of a particular group ex. AARP tries to get all retirees
access-based strategic position
serving a subset of customers who are different ex. Edward Jones only operates in small towns
the system is greater than the sum of its parts
use data and algorithms to forecast future events
value of information
benefit produced by the information minus the cost of producing it
MAJOR BENEFITS OF INFORMATION:
1. Reduction of uncertainty 2. Improved decisions 3. Better ability to plan activities
required by a governmental entity
required to conduct business with external parties