Value chain
Porter and Millar (1991) have also been useful in establishing the need for
value chain analysis. This looks at where value is generated inside the
organization, but also in its external relationships, for example with suppliers
and customers. Thus the primary activities of a typical manufacturing
company may be: inbound logistics, operations, outbound logistics, marketing
and sales, and service. Support activities will be: firm infrastructure, human
resource management, technology development and procurement. The
question here is what can be done to add value within and across these
activities? As every value activity has both a physical and an informationprocessing
component, it is clear that the opportunities for value-added IT
investment may well be considerable. Value chain analysis helps to focus
attention on where these will be.