The functioning of ERP systems

The value chain and the supply

chain
the value chain [Porter, 1986]
The model assumes a simple manufacturing
company. The processes in this company are
split in two categories. The first category
consists of primary processes, processes that
are characteristic for the type of organisation.
In a manufacturing company, primary
processes are purchasing of raw materials,
manufacturing, distribution of finished
products, sales & marketing, and after sales
service. The second category of processes
consists of secondary processes, processes the
existence of which does not depend on the
type of company but that occur in most
organisations: procurement, technology &
maintenance, human resource management,
and finance & other support. 2
The predecessors of ERP

3
Value chains for four types of
companies