Value chain

This is the set of activities that an organisation carries out to deliver its goods or services to its customers.

Each activity in the chain has inputs, transformation activity and outputs; the outputs typically provide inputs for subsequent activities. For example, iron ore may be turned into iron bars which are machined into components which are assembled into a vehicle which is delivered to a forecourt where it is sold to a customer.  Analysing each activity in the chain can identify opportunities to improve processes, reduce waste or provide added value.

Value chain is a term normally found in strategic management and performance management.

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