A Value Chain Analysis for manufacturing firms can be illustrated by creating Support Activities and Primary Activities, and these two decide the Margin. As the diagram illustrates, the support activities of the manufacturing firm are firm infrastructure, human resource management, technology development, and procurement. The primary activities can be inbound logistics, operations, outbound logistics, marketing and sales, and services. A Value Chain Analysis focuses on the systems and activities with customers as the central principle rather than on departments and accounting expense categories. As shown below, the value chain analysis links systems and activities to each other and demonstrates the effect on costs and profits. Instead of creating Value Chain diagrams on complex and highly-paid tools, use free value chain makers like EdrawMax or EdrawMax Online. The templates provided by EdrawMax are 100% customizable and can later be shared in any format required.
