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Both Porter and Shank assess the addition of value as management of costs in an effort to increase efficiency or add value to the organization as a whole. Porter model concentrates primarily on the internal control of operations via the value chain, whereas Shank concentrates on value addition. Porter’s model utilizes internal cost strategies for internal reduction of costs to increase value only on the value additions (microcosm) whereas Shank expands the value chain against both internal and external evaluations within the organizations and with competitors through strategization.
Porter’s model looks at primary and support functions within the organization’s value chain to create added value to the organization. In looking at purchasing, specifically, only looking at how to decrease costs inherent to the purchasing process may eclipse the firm’s ability to take advantage of synergistic interactions with the firm’s suppliers to reduce costs and capital use even further......

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Approximate Pages: 3 (250 words per double-spaced page)

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