GRADE

12

ENTREPRENEURSHIP
Work Sheet (Q2, Wk5)

Value Chain & Supply Chain

Most Essential Learning Competency:

Create an effective Value & Supply Chain for the enterprise.

GOVERNMENT PROPERTY
NOT FOR SALE
 Activities

Activity 1.1
Title of Activity: Creating an Effective Value & Supply Chain
for the Business

Objective:
1. Create an efficient and effective value & supply chain for the business.

Procedure:
A. In the group activity for the innovated product/service, create an effective
Value Chain for the business. This should be consisted of all members
among the group who will form the Value Chain. Specify the tasks and
department of each one.
B. Identify also the business’ Supply Chain, how the product/service will reach
the consumer from business.
C. Include these in the Business Plan document presentation.

Critical Thinking Questions:

1. How did your group based the members’ tasks in the Value Chain?

________________________________________________________
2. Do you think that your group’s Value Chain is effective & efficient enough for the
company’s productivity and profitability?

3. How effective do you think your business’ Supply Chain for the consumer?
 Remember

 The Value Chain is the strategic linkage or a series of value-adding individual

activities required to create, produce and deliver products and services to the
customers, that fit the total business plan to create profit for the firm.
o It helps the employees visualize and understand the role each department of
an organization plays in meeting the needs of other departments.
o A value chain is a step-by-step business model for transforming a product or
service from idea to reality. Value chains help increase a business's
efficiency so the business can deliver the most value for the least possible
cost.
o A value chain is a set of activities that a firm operating in a specific industry
performs in order to deliver a valuable product for the market.
o For short, it describes the primary activities needed to accomplish a firm’s task
and asks the question “What’s the most efficient way to do what needs to be
done?

Sample Value Chain of a Manufacturing Company:

Source: Internet

 Entrepreneurs can reflect on the strengths and weaknesses of each of the

firm’s Value Chain’s elements, then create initiatives to narrow performance
 gaps. A strength in one Value Chain function can be pulled down by
weaknesses in other parts of the Value Chain. Hence, simultaneous
improvements would be needed to keep the process or the machinery well-oiled.
 Example: Pizza Hut’s delivery campaign (free pizza if not delivered within 30
minutes), is not honored by operations people if orders are placed during peak
hours.
 The Value Chain is important especially for start-ups as it defines the time and
effort required in each stage of the Value Chain before products can be sold to a
paying customer. The time and effort needed also to estimate the cash flow
required to get things going in the start-up
o Example: A successful Filipino entrepreneur’s expansion to an Asian country
was hampered due to the delay in the release of its foreign investment license
for almost two years instead of just only six months. Likewise, their shipment
was also held for a month before release even if there were no exceptions
noted. These resulted to the destroyed business momentum and low-morale.
The Value Chain timetable was underestimated.

 The Value Chain of a company strategy that is differentiated will differ from the
Value Chain if the strategy is low cost. Differentiated versus low-cost
activities would be different in value and cost, hence, can drive competitive
advantage.
o Example: The competition between Ford and General Motors, in which it was
too late for Ford to offer colored vehicles resulting to General Motor’s market
leadership.
 Source: Internet

Source: Internet

 IMPORTANCE OF VALUE CHAIN

1. It defines the role of each member plays in the flow of materials, information
and relationships with trust as a central issue.

• Materials – suppliers delivering orders is the most fundamental part in a value

chain.
• Information – Online e-commerce sites like Shopee as well as logistics
companies – Lalamove/Grab, have live tracking features for cutomers to know
status of their shipment.
• Relationships – government & private offices have EDP/MIS department not
only to secure companies’ info data but also provides computer/IT trainings to
other departments’ personnel

2. It shows the profit pool of an industry by segment in the entire value chain.
 SM Group have been able to increase total profitability by having the
negotiation power for higher margins as well as having different types of
support funds.

3. It identifies the potential complementers who can

help the firm create differentiation and barrier to
competitive entry.
 Philips is the manufacturer of Sara Lee’s Senseo
coffee machine. Philips agreed to sell the machine
at cost while earning royalty from the sale of Senseo
coffee pods, creating an innovative & collaborative
business model.
 4. It identifies the complementers who can help
the firm execute strategy that no other
company can do as efficiently.
 Dell has a vendor management inventory
(VMI) system where suppliers automatically
deliver parts to them based on a pre-agreed
supply formula.

5. It shows how value chain boundaries of tasks performed can be

expanded or collapsed in case of an innovation.
• Cemex Mexico expanded the value
chain by adding a sequence of solutions
like a unique financing scheme to a
buyer’s group, do-it-yourself
construction classes, & periodic site
supervision, creating a different value
chain vs. competition.

6. It identifies potential competitors, as members in the value chain may want

to stretch their activities beyond their normal territory as part of expanding
their core to their adjacency.
• Mega Sardines shifting from operating fishing
vessel supplying sardines to a sardines
manufacturer, due to sardines’ price control by
canneries.

 A Supply Chain is the entire process of making

and selling commercial goods, including every
stage from the supply of materials and the
manufacture of the goods through to their
distribution and sale. Successfully
managing supply chains is essential to any
company hoping to compete.

o It is a network between a company and its

suppliers to produce and distribute a specific
product to the final buyer.
o The supply chain also represents the steps it takes to get the product or
service from its original state to the customer.
 Examples of Supply Chain:

 The 2 Types of Supply Chain:

 Reactive Supply Data-Driven Supply
Chain Strategy Chain Strategy

Operational improvements based A data-driven approach helps even

on guesswork or imitating best-in-class manufacturing operations
competitors. find new ways to improve efficiency

o For Data-Driven Supply Chain Strategy - use research, customers & suppliers’
feedback

 6 Types of Supply Chain Models:

1. “Continuous-Flow” Supply Chain Model

Relies on supply and demand stability, with
processes scheduled in such a way as to ensure
a steady cadence and continuous flow of
information and products. This model typically is
for a very mature supply chain with a customer
demand profile that has little variation.

2. Fast Chain Model 

Most often used by businesses that manufacture
finished products and deal mainly with extremely
trendy products that have a short lifecycle.
This model works best with businesses that
must change their products frequently and get
them to market quickly before a trend is no
longer relevant.

3. “Efficient” Supply Chain Model

In this model, management must maximize
utilization of machinery and other assets and
maintain high overall equipment efficiency to
reduce cost. They also rely on very accurate
forecasting to ensure product availability and
perfect order fulfilment.

4. Agile Chain Model 

 Basically refers to the use of responsiveness, competency, flexibility, and
quickness to manage how well a supply chain entity operates on a daily basis.
• Another key benefit of agility in the supply chain is focusing on avoiding
potential shortages and eliminating excessively stocked inventory.

5.  "Custom-configured" Model
The custom-configured model combines the
continuous-flow and an agile supply chain
models where the processes
before configuration of the product are
managed under the continuous-
flow model while downstream processes
operate as an agile supply chain.

6. Flexible Model
Source: Internet

Checking your Understanding

Critical Thinking Questions
1. Among the uses of Value Chain, which one is the most important to you ?
______________________________________________________________
________________________________________

2. How important is Value Chain to the productivity of the business?

___________________________________________________

3. If you are an entrepreneur, what model of Supply Chain will you follow, why?
______________________________________________________________
________________________________________
 Evaluation

Directions: Write the letter of the correct answer for

Answer Card

Evaluation
1.
2.
3.
4.
5.
References
Books:
Josiah Go & Chiqui Escareal Go (2018 Ed.), Entrepreneurship, Josia & Carolina Go
Foundation, Inc,
Internet:
Value Chain -https://www.google.com/search?
q=value+chain&oq=value+chain&aqs=chrome..69i57j0i131i433j69i59l2j0i131i433l2j0l2.2795j1j15&s
ourceid=chrome&ie=UTF-8
Value Chain of a Manufacturing Co. (Image) https://www.google.com/search?
q=value+chain+example+for+a+manufacturing+firm&tbm=isch&ved=2ahUKEwi05If49r_uAhUNhZQK
HRczCjsQ2-
cCegQIABAA&oq=value+chain+example+for+a+manufacturing+firm&gs_lcp=CgNpbWcQAzoHCAAQs
QMQQzoECAAQQzoCCAA6BQgAELEDOgYIABAIEB5QoeMCWKeYA2D4pANoA3AAeAGAAaICiAH6G5IB
BjI4LjcuMZgBAKABAaoBC2d3cy13aXotaW1nwAEB&sclient=img&ei=jVwTYPTpLY2K0gSX5qjYAw&bih=
624&biw=1350#imgrc=s1a4jG28c-4UiM

Written by:
EVELYN S. PLAZA, San Juan City Academic Senior High School

For questions or comments, write or call:

Department of Education
Schools Division Office – San Juan City
Pinaglabanan St., San Juan City, Philippines 1500
Telefax: (632) 8451-2699; (632) 8251-2383
Email Address: depedsanjuanrecords@gmail.com

For questions or comments, write or call:

Department of Education
Schools Division Office – San Juan City
Pinaglabanan St., San Juan City, Philippines 1500
Telefax: (632) 8451-2699; (632) 8251-2383
Email Address: depedsanjuanrecords@gmail.com