News

Gathering Information For Value Chain Analysis: Primary Activities

Gathering Information For Value Chain Analysis: Primary Activities

September 16th, 2019

by Ian Smith

Conducting a value chain analysis is a very daunting task whether it is on your first attempt or if it is a regular exercise for a variety of industries.  Economic development agencies can spend a lot of time worrying about results and potential decisions to be made, however; not enough time is focused on the type of information that is needed for the exercise.   Whether an agency is relying on an external consultant or lead executive within the organization, it is vital that the information is current and reflects the recent developments in the industry that is being examined.  In order to do so, an information gathering system should be in place and aligned with the different activities in the industry’s value chain.  For the purposes of this post, the following primary activities (as seen in Figure 1) will be discussed in the context of collecting information for analysis reasons.

Figure 1: Primary and Support Activities of Value Chain Analysis

1 Inbound Logistics

This primary block in the figure focuses on the activities associated with receiving, warehousing and inventory control of raw materials.  The only avenue to gather details regarding inbound logistics is to into companies in the sectors and interview senior managers.  Although gathering information can be done via questionnaires or surveys, interviews allows for more “open-ended” questions and insights regarding different issues.

2 — Operations

This secondary element of the model investigates the process needed to take the raw materials to create the final product to sell to the end consumer.  While it may be more efficient to talk to production managers regarding product processes within the company, however; conducting some secondary research is recommended.   Secondary research can unearth information that managers may not be willing to discuss with anyone. 

3 — Outbound Logistics

The third block of the model is geared towards the warehousing and distribution of finished products.   It is important to note that the warehousing and distribution activities might be done by another entity where gathering information may be very time consuming.  As a result, a good starting point would be to cull information from the web about the warehousing and distribution companies.   The next step in the information gathering process is to arrange to have interviews with managers at the companies.  Be aware than some managers may not be willing to talk about their client service offerings.

4 — Marketing and Sales

The Marketing and Sales portion of the analysis frameworks aims to understand the activities needed to promote products in the industry.  Primary and secondary information can be gathered regarding different forms of advertising (i.e., radio, print, web), sales promotion strategies and pricing.  Individuals that will be responsible for collecting the information must understand that it is a time-sensitive task in order to assess the effectiveness and efficiency of all marketing and sales initiatives.

5 — Services

The final block of the model examines the services linked to the final manufactured product.   From client services to product exchange policies, details on available services can be discovered via secondary research methods.  The first and obvious source to consult is the manufacturer’s website to learn about all relevant available services and policies.  This exercise might entail taking a deep-dive into the website where information can in .pdfs that are not easily accessible via a routine Google search.

In order to perform or facilitate a proper value chain analysis, the right information must be gathered.  From primary to secondary sources, analysts must ensure that the information is current and be used in the correct context to tell a story about the industry that is under investigation. 

Need help applying the value chain analysis for economic development initiatives?  Contact us TODAY.  

Read Related Past Posts: