Value Chain

Introduction

Value chain in the chain of activities in an industry through which a product or service passes through and gain value before the final product is delivered to the customer. In every industry, the key to success for any player is to manage the value chain such that it can deliver maximum value product to the customer. This process is called Value Chain Management (VCM) in layman’s terms (Chopra and Meindl 2001, pp. 112-117). It is also important to note that engineers have a crucial and important role in VCM. Automobile Industry is no different in this regard. The report will try to understand the Value chain of the automobile manufacturing industry. The report will also try to analyze the role of the engineers in the management of the Value Chain and the business benefits to the organizations by including them in VCM.

Value Chain of Automobile Industry

Automobile industry is one of the major industries in the world and involves a very huge value chain before the final product (vehicle) is delivered to the customers. The value chain of the automobile industry can be divided into two major groups of activities – Supply Chain and Demand Chain. Supply chain of the automobile industry generally involves these major operations- Procurement, Design, Production and Distribution each having many activities. While the Demand chain of the industry includes these major operations- Marketing, Sales and Service each one having many activities. (Panizzolo, 2008, pp. 23-34)