Value
Indices
Example

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Value indices measure the direction and rate of value improvement generated by a supplier. Value can be measured three ways: price only (for highly competitive commodities); price and quality (when total cost is important, especially in long term agreement in the absences of market forces) and; price, quality and cycle time for strategic suppliers (particularly for items that are sole sourced).

In the global competitive environment "end customers" are demanding every increasing value. Therefore, the supply chain must continue to provide value upstream in the supply chain.