Primary activities in a value chain

Full Answer Section

1. Inbound logistics: This involves the procurement and storage of raw materials and components used in the production process. For example, a car manufacturer would acquire steel, glass, and other materials from suppliers and store them in warehouses.
2. Operations: This refers to the transformation of inputs into outputs, or the actual production process. In the case of the car manufacturer, this would involve assembling the car components into a finished product.
3. Outbound logistics: This includes the distribution of the finished product to customers. The car manufacturer would transport the cars to dealerships or directly to customers.
4. Marketing and sales: This involves promoting the product or service and generating sales. The car manufacturer would use advertising, public relations, and sales promotions to attract customers and sell the cars.
5. Service: This refers to providing after-sales support and maintenance. The car manufacturer would offer services such as warranty repairs, maintenance, and customer assistance.

Example: A Coffee Shop Value Chain

• Inbound logistics: Purchasing coffee beans, milk, sugar, and other supplies.
• Operations: Brewing coffee, preparing food items, and cleaning the shop.
• Outbound logistics: Serving customers and delivering orders.
• Marketing and sales: Promoting the coffee shop through advertising and social media.
• Service: Providing customer service and handling customer complaints.

b. Impact of Information Systems on Supply Chain Performance

Information systems can significantly affect supply chain performance by:

• Improving visibility: Information systems can provide real-time visibility into inventory levels, production processes, and transportation routes, allowing companies to make more informed decisions and respond quickly to changes in demand.
• Enhancing collaboration: Information systems can facilitate collaboration between suppliers, manufacturers, distributors, and retailers, improving communication and coordination.
• Reducing costs: By automating processes and reducing manual tasks, information systems can help to reduce costs throughout the supply chain.
• Increasing efficiency: Information systems can help to optimize processes and improve efficiency, leading to faster delivery times and higher customer satisfaction.

c. Challenges of International Information Systems Management

1. Cultural differences: Different cultures have different ways of doing business and communicating. This can make it challenging to implement and manage information systems in international settings.
2. Language barriers: Language differences can hinder communication and collaboration between employees in different countries.
3. Legal and regulatory differences: Different countries have different laws and regulations governing data privacy, security, and other aspects of information systems. This can make it difficult to comply with all applicable laws and regulations.
4. Infrastructure differences: The quality and availability of information technology infrastructure can vary significantly between countries. This can impact the implementation and performance of information systems.
5. Political instability: Political instability and uncertainty can create challenges for international information systems management, as it can disrupt operations and increase risks.

Sample Answer

Value chain is a model proposed by Michael Porter to describe the series of activities a company performs to create value for its customers. It consists of two categories of activities: primary activities and support activities.

Primary activities are directly involved in creating and delivering the product or service.

These activities include