The Value Chain Concept
According to Gokus (2015), value chain entails the complete supervision of the production's internal processes in any business. The idea of the value chain is used in an organization to supervise the movement of operations, services, or goods from the point they begin to be developed through all other means in the production process until they reach the final stage. Additionally, the management can know if its production process has been a success or a failure through proper analyzing of the value chain. The main idea about value chain is to deliver quality services or goods in the market.
The concept of value chain was initiated by Michael Porter where he described how organizations receive the raw materials, use various techniques to add value to the raw materials and after that create a finished product that they sell to the customer (Parida et al. 2015). To ensure efficiency, every organisation looks at each production process to determine the area within the chain where they can improve to give the best product to the clients. Moreover, by doing value chain analysis, organisations can identify the steps which are costly and develop appropriate measures.
SFDA's Value Chain Strategies
For any organisation to improve its efficiency and production in its value chain, proper strategies must be laid out. The most common approaches include identifying the company's primary activities and support. Moreover, Romero et al. (2016) claim that it is fundamental for organisations to consider every step or event listed in the cost of production. Having the right strategy means that every issue arising from the value chain is appropriately addressed. Cost is an essential factor in the value chain, and it is necessary to discuss it in each of the chain processes. Also, identifying the various links that exist in the chain allows an organisation to see how best multiple stages of production can link to give the best result and minimise the overall cost (Romero et al., 2016). The Saudi Food and Drug Authority has utilised most of these strategies in its course to improve its service delivery.
The Saudi Food and Drug Authority main roles are to control and regulate the efficiency, quality and safety of medical devices, food and drugs to guarantee consumers that the products they are taking are good for their health. The value chain strategies of the SFDA captures the organisation's tertiary and primary activities. By categorising its undertakings in either tertiary or primary, the SFDA can perform its tasks effectively and with ease. Another strategy SFDA utilises to boost its performance is by applying the model of competitive advantage developed by Michael Potters.
SFDA's Primary Activities
The Incoming Logistics
The inbound or the incoming logistics is concerned with assessing all the raw materials that are used when producing foods and medicine coming from either the country, neighbouring nations or any other part of the world. The most critical step to ensure safety is by assessing band examining the distribution, storage and reception of raw materials (Grant & Jordan, 2015). The SFDA takes this step very seriously.
Additionally, assessing incoming logistics ensures that the medicine and food production in the country utilises the correct and safest raw materials. According to Akamp and Muller (2013), having the right raw materials is the only guarantee that manufacturers are producing safe products. To the ensure that the raw materials are in good condition, the SFDA developed a screening procedure that provides there is proper checkup guaranteeing safety. Moreover, the organisation has a clear message to all manufacturers that the quality of raw materials should not be compromised at any given time.
The second strategy that the SFDA utilises is analysing all the production processes that place in companies. For any firm to be allowed to produce its desired products, they must meet the clear procedures and policies laid out by the SFDA. The method and policies protect the consumer from harmful taking harmful products and also provides safety for all employees working in various firms. Furthermore, every production process must that a company has must be approved by the SFDA.
The outbound or the outgoing logistics is all about the distribution of procedure, policies, and services. According to Clarke and Boersma (2017), it is not enough to develop laws, policies, and procedures if they will not be enacted or implemented. The SFDA has a clear plan on how to apply the various process and policies it outlines concerning production and delivery of good and services. Its strategy includes having an able and competent workforce that analyses the distribution of products in various firms. The organisation usually conduct impromptu searches in multiple companies, and the offenders of these policies are punished as the law dictate.
The nature of the SFDA is to provide services that ensure that all food and drugs produced in the country are of the right quality. Furthermore, its primary role is to guarantee safety for the consumers by making sure producers comply with the stipulated guidelines and procedures. According to Akamp and Muller (2013), it is essential for any safety authority to ensure that consumers do not consume products of low quality or sold goods at abnormal cost. SFDA role is to give a certificate of conduct to manufacturers who comply.
SFDA's Tertiary Activities of Production
Infrastructure and Technological Developments
With the help of an operative value chain management system, the SFDA effectively coordinates its infrastructure and technological developments. Clarke and Boersma (2017) note that the infrastructure and technological developments are interdependent and hence there need to ensure they are run and coordinated together. The primary function of the SFDA is significantly dependent on these two types of development.
To have overall access to how the SFDA runs its operation, the organisation has incorporated current technology in all of its process. According to Grant and Jordan (2015), the use of technology allows firms to share relevant information with their counterparts ensuring that communication is effective. Moreover, technology will enable SFDA to share information with other global regulatory authority on the latest and most effective tools of providing quality.
Human Resource Management
Having enough and competent workforce is key to the success of any organisation (Bidgoli, 2010). SFDA human resource is skilled and responsible when it comes to service delivery, and every employee knows that serving the public is the organisation's top priority. As an organisation that is supposed to safeguard the lives of people, professionalism is something the SFDA strives to archive. The organisation hires only qualified professionals in the country and if necessary from all over the world to handle the various units of service delivery within their charter. Additionally, employee satisfaction is guaranteed whereby their need and wants are appropriately addressed to motivate them (Sato & Stehrer, 2015). SFDA has effectively used its human resource to make its supply chain more effective.
SFDA's Value Chain Delivery Effectiveness
Analyzing the value chain of SFDA shows that it's competent and capable of giving good results. Foesrstl et al. (2010) state that a good value chain is one that can ensure an organisation runs its operations smoothly while at the same time reducing the overall cost. This is what SFDA has been able to do since its value chain allows it to effectively serve the companies through giving them directions and also the consumers by ensuring their safety. While performing its functions, the organization provides that each stage of operation is optimised to ensure efficiency and more importantly reduce the cost of service. Looking at the reports the authority gives to its overseeing ministry, it is clear that the organization can perform its duties effectively.
According to Grant and Jordan (2015), the management of any organization significantly determines how effectively delivery of systems will be realised since it's the responsibility for allocating the right personnel and guidelines. Since the SFDA is a public organization, various political unrests and changes usually affect it management meaning that the delivery of value chain is affected. For the organization to perform well, it must be freed from external influence.
Guaranteeing SFDA's Success in Its Value Chain
The value chain of the SFDA has performed well over the years but there still areas of improvement (Reese, et, al., 2016). One way SFDA can boost its success is by full automation of all its service delivery actions. This entails having the latest technologies in all of the stages of production encouraging performance and improving efficiency. Additionally, the SFDA should also to assess and enhance its policies and laws that govern its operation to ensure that any flaws are eliminated.
Additionally, as much as SFDA has invested in technology and infrastructure, there is still much it can do to guarantee success in its value chain. Foesrstl, et, al (2010) notes that having proper technological infrastructure is essential for the success of any organization as it boosts employees performance in all units of production. Furthermore, technology allows organizations to record its performance and after that analyze various sections that can be improved and this is what the SFDA needs. Moreover, there some parts of the SFDA that lacks adequately qualified employees and this at times brings in incompetence. Therefore, the organization should boost its human resource to ensure that it has the best employees in every part of the production.
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Foesrstl, K., Reuter, C., Hartmann, E., &Blome, C., (2010). Managing supplier sustainability in a dynamically changing environment - sustainable supplier management in the chemical industry. Journal of purchase supply management, 16, 118 - 130.
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