The Value Chain

Operations

Any part of a business that is involved in converting the raw materials into the final products or services is part of operations.

Technology development

The technological advances and innovations that support the primary activities.

support activities

Functions in an organization that support, and cut across, all of the primary activities. Firm infrastructure, Human resource management, Technology development, Procurement

primary activities

Functions that directly impact the creation of a product or service. Inbound logistics, Operations, Outbound logistics, Sales/Marketing, Service.

Procurement

The activities involved in acquiring the raw materials used in the creation of products and services are called procurement.

Service

The functions a business performs after the product has been purchased to maintain and enhance the product's value are part of the service activity.

Sales/Marketing

The functions that will entice buyers to purchase the products are part of sales and marketing.

Inbound logistics

These are the functions performed to bring in raw materials and other needed inputs. Information technology can be used here to make these processes more efficient, such as with supply-chain management systems, which allow the suppliers to manage their own inventory.

Outbound logistics

These are the functions required to get the product out to the customer.

Human resource management

This activity consists of recruiting, hiring, and other services needed to attract and retain employees.

Firm infrastructure

This includes organizational functions such as finance, accounting, and quality control, all of which depend on information technology; the use of ERP systems is a good example of the impact that IT can have on these functions.