Value Chain Product-Based Companies
Introduction
Supply chain management refers to all engagements required in over-sighting of the movement of product/services from a producer to the final consumer. As a process, it involves the management of materials, finances as well as information through proper coordination and integration between companies. Supply chain forms the heart of a company’s operations to fulfilling its objectives. Effective supply chain has to create, deliver and maintain an effective value chain in its operations. Here, value chain refers to all internal function’s engagement with external suppliers in order to fulfill the needs of the consumer. In reflection to Burt, Petcavage & Pinkerton’s (2010) descriptions of value chain, this paper provides an analysis of two product-based companies, that is, Samsung and the Newmont Mining Corporation.
Discussion
The Colorado-based company mainly focuses on the mining of gold in various regions including Australia, Indonesia, Nevada, Peru as well as Ghana. However, it has diversified venture relationships other mining firms across the globe. The value chain for Newmont Mining Corporation can be explained as below;
(Source: Burt, Petcavage & Pinkerton, 2010)
As evident, the operational processes engage various components in the company’s value chain. The first component is the basic factor of production known as land/earth. Newmont Mining Corporation channels human resources to coordinate and explore in order to determine the specific region that has raw gold deposits. Here, communication and financing are the major activities.
Then, it is until the company’s representatives ascertain that there are minerals, in this case, gold deposits in the identified mining sites when the extraction personnel begins the process to harvest the minerals. This is detailed as the second component in the value chain creation. The harvesting personnel utilize the best technology to achieve the best results.
The converters also known as the suppliers are listed as the third component in the value chain. These are the parties or partner companies that will transport the raw gold from the mining sites to the manufacturers’ plant. The transportation of the materials is a vital component bearing in mind that the goods need to arrive at the manufacturers in time and the right physical conditions (Gattorna & Walters, 2006).
Finally, the original equipment makers/manufacturers complete the value chain cycle for Newmont Mining Corporation. This is where raw gold in processed to make various consumer equipment. In this value chain, the source of income is the manufacturer of the gold materials, and Newmont Mining Corporation has to do anything possible to ensure that they maintain the effectiveness of their clients.
Samsung
Samsung is another product-based company. It is a South Korean based firm that operates in numerous affiliated businesses. For this case, the analysis of Samsung’s supply chain focuses on the electronics business. An elaboration of the various components can be summarized as shown below:
(Source: Burt, Petcavage & Pinkerton, 2010)
Evidently, this supply chain engages more components compared with that under Newmont Mining Corporation. Here, the first component is the basic factor of production labeled as mother/earth. Although Samsung does not engage directly in mineral exploration, it channels its human resource in its processes of obtaining raw materials. For instance, the various semiconductor cables such as copper wires that are significant materials for the manufacture of memory gadgets are obtained from mining activities.
Then, the extractor companies/harvesters of such raw copper materials form the second component in the value chain. These are Samsung’s business associates that ensure a successful extraction process.
The next component comprises the original equipment manufacturers. In this case, Samsung machinery and human resource are actively engaged in making the consumer products. Most of these products are mobile phones, television sets among many electronic devices under the Samsung brand.
Then, marketers take the initiative to identify potential consumers of the Samsung products. This involves both the Samsung’s internal marketing branch as well as the external companies that offer marketing services and platforms. It is also fundamental to note that marketers provide essential information to the manufacturer and the consumer. Such information includes the elements such as quality of products and pricing of the devices (Pita, Laric, Walters & Rainbird, 2004). Then, as the final source of income, the consumers are the final and important component for the completion of the value chain.
Conclusion
As discussed above, a successful supply chain is one that reflects the vital elements of the value chain. These are the value creation, delivery, and maintenance. For value creation, both Newmont Mining Corporation and Samsung use innovative ways to develop their products. In value delivery, both companies also ensure that the value chain cycle if complete so as to fulfill the needs of the end consumer. In terms of value maintenance, the companies incorporate strategies to provide after sale, support, and product maintenance services (Pita, Laric, Walters & Rainbird, 2004).
References
Burt, D. N., Petcavage, S. D., & Pinkerton, R. L. (2010). Supply management (8th ed.). Boston: McGraw-Hill Irwin.
Gattorna, J. L., & Walters, D. W. (2006). Value Chain and Value Delivery Systems for Supply Chain Management. Managing the Supply Chain, 99-111. doi:10.1007/978-1-349-24841-4_6
Pita, D. A., Laric, M. V., Walters, D., & Rainbird, M. (2004). The value chain and marketing. Bradford: Emerald Group Pub.
