Creating Profit Through Alliances - business models for collaboration E-book | Page 14

In addition, decisions within the link may affect
activities in other links:
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The decision to use semi-finished products
instead of raw products leads to a shift in
activities and perhaps also a choice of other
suppliers. This may be more efficient for the
entire chain if the new supplier has a better
process for this than the company itself, or if the
transport costs are drastically reduced as a result
of that.
The way in which the product is packed directly
affects the logistics process in the next link.
Introducing additional quality control to the
operations could lead to extra costs in the own
link, but will lead to large savings in subsequent
links due to a lower amount of rejected
products.

So links in the value chain and activities outside of it
cannot be treated separately. Only when you look at
things more closely will you be able to see hidden
costs and find a solution to that. In some countries,
for example, electronics supplier Samsung outsources
maintenance on printers to Microfix. This required a
lot of coordination between the department at
Samsung with customer contact and the schedule of
Microfix engineers. That is why it was decided to
outsource the entire process of making an
appointment with the customer to Microfix,
integrating customer contact and scheduling. This led
to efficiency on both sides.
3. The value chain doesn’t end with delivery
The value chain does not end with the delivery of the
product or service to the consumer. Various activities
take place at the consumer as well, and this is where
a lot of opportunities to create added value can be
created. Let's take the sale of a microwave. This is a
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product that a lot of consumers buy in the shop and
take home with them straight away. The microwave
must be transported, taken out of its packaging,
inspected, installed and tested, the user manual must
be read and the packaging must be disposed of.
All these activities harbour opportunities to add
value, without it costing substantial amounts of extra
money. A delivery service is an obvious idea. A
smaller box or a different type of packaging would
make it easier to carry and reduce waste. Three 'IKEAtype' pictures on the box could immediately simplify
the installation process. A well-designed operating
display could render a user manual virtually
superfluous. And as soon as a seller of microwaves
starts promoting a certain model because he never
receives any complaints about it, the price of that
product could be increased by ten dollars.
Another underestimated element of the value chain
at the consumer (but also at a company's purchasing
department) is the effort made to come to an
informed choice. This begins with focusing on
potential suppliers, finding information on the
product, and taking a decision that can also be
explained to the partner or manager. The process
continues up to placing the order and making the
payment. A customer may perhaps spend more time
making his purchase than you do in the sales process.
Adding value is possible in this part of the process
too. By being findable, having transparent sales
material, offering tailor-made suggestions, collecting
positive references and simplifying the ordering
process, you can make it so much easier for the
customer. A good example of this still is the
amazon.com website, which gives you personalised
tips each time you log in and which allows you to
browse books.