Understanding the Dynamics of the Value Chain

The Limitations of the Porter Model

The absence of a “culture” component is one limitation of the Porter model. There are some others. Since the mid-1980s, there have been radical changes in business thinking that have significant implications for any value chain model. For example, he identifies procurement as a “support activity” in his generic value chain. He notes:

A given procurement activity can normally be associated with a specific value activity or activities which it supports, though often a purchasing department serves many value activities and purchasing policies firm-wide.3

With the development of the concept of supply chain management over the past decade, procurement, now more descriptively called supply management, is ...