The Role of The AIS In The Value Chain

THE ROLE OF THE AIS IN THE VALUE CHAIN

The goal of most organizations is to provide value to their customers. To add value to their customers, most organizations carry out a number of different activities. Figure 1-5 shows that these activities can be conceptualized as forming a value chain consisting of five main activities that directly provide added value to customers:

1. Raw Materials (Inbound logistics) receiving, storing and distributing materials that are input for the organization's products or services. For example, a pharmaceutical company, this activity could include the treatment of chemicals and other elements that will be used to make drugs.

2. Operations (operations) change the input into products or services. For example, a pharmaceutical company, this step might include mixing chemical raw materials and supporting materials with labor and equipment to produce drugs to be sold to customers.

3. Finished goods (outbound logistics) distribute products or services to customers. For example, a pharmaceutical company, this step involves packaging and distributing drugs to drugstores, doctors and hospitals.

4. Marketing and Sales (marketing and sales) help customers to buy products or services. For example, visiting and offering medicines to drugstores, doctors, etc. and accepting orders.

5. Services provide after-sales services to customers, such as the repair and maintenance of certain functions. For example, pharmaceutical companies usually provide consulting services to pharmacists.

Supporting activities enable the five main activities to be carried out efficiently and effectively. they are grouped into four categories:

1. Firm infrastructure for accountants, lawyers, and administration

2. Human resources include the recruitment of new employees, employee training, payment of salaries, management of other employee benefits.

3. Technology (technology) activities to improve the quality of products and services (such as website development). For example, research and development of new drugs and improving existing ones.

4. Purchasing (purchasing) buying raw materials, supplies, and fixed assets needed to support the company's activities.