What’s Procurement’s Place in the Value Chain?

Porter’s Value Chain

In 1985, Michael Porter published his best seller: Competitive Advantage: Creating and Sustaining Superior Performance.

Source: Porter (1985)
  1. Operations — are all the activities required to transform inputs into outputs (products and services).
  2. Outbound Logistics — include all the activities required to collect, store, and distribute the output.
  3. Marketing and Sales — activities inform buyers about products and services, induce buyers to purchase them and facilitate their purchase.
  4. Service — includes all the activities required to keep the product or service working effectively for the buyer after it is sold and delivered.

What is Value today?

In a recent post, I introduced a concept that I truly believe has become and will continue to be, the widely accepted consensus of modern value creation: Value 2.0.

What’s Procurement’s place in the Value Chain?

Procurement is one of the sole functions in an organization that can truly implement and realize quality and sustainability initiatives in the line; considering procurement’s ability to impact the supply chain at the supplier level.

  • How those goods/services are being produced or delivered?
  • Why you are procuring from those particular suppliers?
  • When to eliminate defective/non-compliant suppliers?

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