Definition：
A value chain is a set of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market.
“One of the Bergman’s objective was to optimize the company’s distribution capacity to lower costs so as to increase operating margins, and to increase the level of service to its customers.”
Facts & Analysis
Primary activities
- supplies and inbound logistics
“Company was able to expand out access to more product and obtain some exclusive products from our suppliers. Almost all products were sourced from third-party suppliers.”
- operation
“Acquisitions and joint ventures allowed Schein to gain access to additional product lines”
“Companies added practice management software, and later digital technologies to their product line.”
- distribution and outbound logistics
“With the company expanding internationally, Schein had 61 distribution centers around world. The utilization rate at the company’s distribution centers was 75% to 80%. Distribution capacity as company’s core competencies, Schein built a good relationship with their customers.”
“On average the company shipped 150,000 packages each day to customers. And the company had a 99.9% order accurate rate. Customer call abandonment rate was less than 2%.”
“Pharmaceutical distribution accounted for 90% of its sales.”
- sales and marketing
“Company added sales people and invested in training sales team could become consultants to dentists.” This would be the directly way to increase the sales revenue and save for the cost to hire new employees to be consultants.
- services
“Company moved from mail-order service to full-service dental.”
support activities
- HR management
“Investment in training so our sales team could become consultants to dentists, showing dentists how they could significantly improve their practice.”
- R&D, technology, system development
“As a result of integration, there were 400 different profit and loss statements at Henry Schein, and multiple purchasing system, distribution system, and reporting system that did not seamlessly tie together.”
“For example, within purchasing, we have a system called E3 that bolts onto any host system, and when we acquire an organization, we talk through the technology of E3, and then we explain the benefits.”
