Value Chain and Supply Chain Analysis
Value Chain and Supply Chain Analysis
Global value chain is described as activities companies use to bring out a product and share its conception from the beginning to the end. Design, production, marketing, distribution, and customer support are activities included in this process. The production of goods and services are value chain activities that are found in large geographical areas or different locations. The term “global value chain” means that value chains are divided in multiple firms and spread throughout wide geographical locations. Global value chains are organized by international production, trade and investments with different stages of production processes. Companies have been motivated to restructure their international operations through outsourcing and other activities off shores. Production of goods or services involves processes that are complex and need sourced activities globally. Global value chains are known as these complex processes because they tell how these products or services are distributed over international borders.
Multinational companies play a major role in the development of global value chains by making decisions on where to source. Global value chains have also been a part of in the global economic and financial crisis. Global supply chain management is a supply chain consisting of all of the businesses and contributors who creates products from raw materials and turns them into merchandise. Supply chains can include manufacturing, design, packaging, and transportation. In global business, supply chain management requires involvement in politics, international relationships, trade laws, and quality control. Global supply chains can be complicated both logistically and technologically allowing management specialists to oversee different processes. Customers’ values are also maximized and businesses are able to gain a competitive advantage in their industry. Production, product development, and information systems are covered by supply chains in order to make businesses efficient as possible and economical. Supply chain management has two core ideas that is part of the concept. One idea is that every product that reaches a single consumer represents effort of all involved organizations.
These multiple organizations are referred to as the supply chain. The other core idea is that supply chains manage the entire activities of the delivery of products to the customers. Many supply chain partners create long term plans, control flow of goods, and the material used in production. Unlike logistics management, which focuses on the inbound and outbound flow of products, services, and related information from a focal organization’s perspective, this definition leads us to the conclusion that supply chain management is a management process that deals with inbound and outbound flows, from the perspective of the focal organization, its suppliers, and its customers (Mentzer, Stank, & Myers, 2006). At Allstate, global value chain management is used to find international talent and extend technology infrastructure.
Allstate has opened new offices in different countries to lead technology initiatives, enterprise testing, mainframe development, and other specialized IT services. Allstate has a competitive advantage because of its sophisticated model pricing for auto insurance. Allstate established a supplier diversity program that seeks out diverse suppliers and invites competition against existing procurement opportunities. During this process, managers allow the suppliers the opportunity to compete for Allstate’s business alongside other competing vendors. Allstate obtains the suppliers goods or services needed to continue operating smoothly. Jobs and other services are provided to strengthen communities and grow diverse businesses.
Allstate opened its first technology and operation in Bangalore, India joining other large corporations such as Microsoft, Volvo, and GE. The Allstate centre is part of Allstate’s value chain providing technology infrastructure and support through its vendors. Allstate Corporation is US’s largest publicly held personal lines insurer serving approximately 16 million households through its Allstate, Encompass, Esurance and Answer Financial brand names. Suren Gupta, executive VP of Allstate Technology & Operations, talks about how its Bangalore centre complements the company’s global operations cutting across business lines (Phadnis, 2012). The Allstate centre in India is part of the global operations that assist in claims, sales, customer service, and marketing. Allstate is one of the first companies to open the insurance market in India. India established a new Insurance Regulatory and Development Authority from companies in which foreign investment may be 26 percent. Allstate identifies opportunities with the company’s supply chains and encourages partnerships with suppliers. Allstate supplier strategy has created competition for the goods and services and also helps other businesses grow.
References
Mentzer, J., Stank, T., & Myers, M. (2006). Why Global Supply Chain Management? Phadnis, S. (2012, June). Allstate invests over $100 million in India annually. The Times of India.
