Porter (1986) developed the value chain analysis, which provides a method of looking at the business with the main objective being to identify ways in which competitive advantages can be achieved.
The value chain anlaysis can be viewed in a variety of different ways, such as buyer, supplier or a top down Just-In-Time perspective.
Look at the model above and apply it to your business the logic is simple, the top four sections (a) Firm Infrastructure, (b) HRM, (c) Technology Development, (d) Procurement, these are items which add support value of a product.
Whilst the main value adding activities are classed as being (a) Inbound Logistics, (b) Operations, (c) Outbound Logistics, (d) Marketing & Sales, (e) Service, are classed as the primary value adding variables.
The supply chain anlaysis allows us to examine all activities, looking at whether they are firstly still needed, and then to examine ways of firstly improving efficiency and trying to achieve cost reductions to increase the profit margins for the business.
This model is very useful as it's application is centred for the role of purchasing and logistics.