A01 chaf6542 06 se fm indd

Value chain analysis

This is an analytical framework for decomposing an organisation into its individual activities 

and determining value added at each stage. In this way the organisation can then assess how 

effectively resources are being used. It may be possible to use information systems to increase 

the efficiency of resource usage for each element in the value chain and even between activities.

Value stream

The combination of 

actions required to deliver 

value to the customer as 

products and services.

M06_CHAF6542_06_SE_C06.indd   268

7/23/14   12:22 PM

---

269

Chapter 6  Supply chain management

How can an organisation positively impact on its value chain by investing in new or 

upgraded information systems? Porter and Millar (1985) propose the following  five‑  step 

process.