VALUE ADDITION IN THE SUPPLY CHAIN
Richard Mumbi - Chartered MCIPS / MZIPS

VALUE ADDITION IN THE SUPPLY CHAIN

We frequently seek value in many aspects of our lives and endeavors while overlooking the value addition we should provide at both the business and community levels.

Value addition in supply chain management is significant because it allows businesses to increase the value of their products and services, improve the quality and efficiency of the supply chain, and increase customer satisfaction.

Value addition should not be confused with value for money; the two are completely distinct, and I will address the topic of value for money in procurement from the standpoint of how procurement functions and professions may maximise value for money at every level of the procurement process.

What then is value addition in the supply chain?

A 'supply chain' is the system and resources needed to transport a product or service from the provider to the customer. The 'value chain' notion expands on this by considering how value is added along the chain, both to the product / service and the people involved. As a procurement expert, there is a need to identify the numerous stages of procurement and supply chain management stages and how each of these stages may be tools for value addition and transformation of the entire organization's supply chains and procurement process.

A Snapshot of a Value Chain Analysis.

Picture by:

Supporting and Primary activities:

I will not dwell on the details of how value addition can be used at each stage; however, it is important to note and appreciate that all of the above stages provide strategic opportunities for procurement and supply chain professionals to add value in their process and ensure the effectiveness and efficiency of supply chains that provide maximum satisfaction to the customers and end-users.

As we near the end of February, our next podcast will focus on value addition and how procurement and supply chains can reposition themselves as essential organizational strategic partners in the area of value addition to provide the best possible service to their internal and external clients.

Finally, we must all recognize that we are not in company, employment, or any other service to fill a job, but to provide value in whatever manner we can. As a result, our major attention should constantly be on being ready to seize any opportunity to add value. Our legacy is defined by the value we add.

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