Ramon Magsaysay Memorial Colleges

Bachelor of Science in Customs Administration

General Santos City, Philippines

Assignment Title:

Value Chain Analysis and Application in a Real-World Business Context

Mini Project – Your Own Value Chain Analysis (50 pts)

Presented to

Maam Adelyn Velasquez

In Partial Fulfillment of the Requirement for the Subject

SCM2 Warehouse Operations Management

Prepared by :

Mikaella S. Melchomo

CN : 28050

August 13, 2025

Introduction of the Business:

Watsons Pharmacy is a leading health and beauty retailer in the Philippines, part of the

global AS Watson Group. It operates over 1,166 stores nationwide, offering a wide range of

health, wellness, and beauty products through an integrated online and offline network. Watsons

is known for accessible community pharmacy services, strong customer focus, and convenient

shopping experiences.

PRIMARY ACTIVITIES

Inbound Logistics Operations Outbound Marketing & Service

Logistics Sales

Sourcing and Managing over 275 Distributing Promotions, Post-sale support

warehousing of health, stores and products to stores merchandising, and omnichannel

beauty, and wellness pharmacy services and online order and personalized customer care.

products. with efficient fulfillment. customer service.

workflows.

How Each Activity Adds Value or Contributes to Cost

Efficient sourcing and Streamlined store Timely delivery Promotions and Post-sale support

warehousing reduce and pharmacy enhances personalized builds trust and

costs and ensure processes improve customer service boost sales loyalty, with some

product availability. service quality and satisfaction but but require added service costs.

lower labor costs. incurs transport marketing spend.

costs.

SUPPORT ACTIVITIES
Firm Infrastructure Human Resource Technology Procurement

Management Development

Partnerships and Staff training and Advanced forecasting, Strategic sourcing and

strong corporate & development. inventory systems, supplier management.

tech infrastructure. and online platforms.

How Each Activity Adds Value or Contributes to Cost

Partnerships and Staff training Advanced systems Strategic sourcing

technology improves service but optimize inventory lowers purchase costs

investments enable involves training and shopping and ensures quality.

improvement and expenses. experience, needing

development but capital investment.

come with fixed costs.

Strategic Actions To Improve Efficiency, Reduce Costs, Or Increase Customer Satisfaction.

Localized Call & Integrate Digital AI-Powered Flexible Staffing

Deliver Health Services Inventory And Upskilling

Forecasting Programs

This is to reduce Integrating digital Using AI-powered Implementing flexible

delivery time and health services in inventory staffing and ups-

costs while enhancing community forecasting at local killing programs to

convenience and pharmacies for virtual stores to optimize improve employee

safety. consultations and stock, reduce waste, engagement, reduce

prescription and meet local turnover, and

accessibility and quality.

loyalty.

Short Written Explanation

Watsons Pharmacy operates through a series of primary and support activities that work

together to deliver health and beauty products efficiently while keeping costs manageable and

satisfying customers. The primary activities begin with inbound logistics, which involves

sourcing products from trusted suppliers and managing warehouses so items are always available

for customers. This efficient handling reduces storage costs and avoids shortages, ensuring

customers can find what they need when they visit. Next, the operations activity covers running

hundreds of stores and pharmacies smoothly, using well-designed workflows and principles like

LEAN (refers to Lean Management or Lean Methodology, which is a systematic approach to

improving efficiency by eliminating waste, optimizing processes, and delivering more value to

customers with fewer resources) to serve customers quickly and accurately. This reduces

unnecessary labor costs and improves the shopping experience. For outbound logistics, Watsons

ensures fast and reliable delivery to both physical stores and online customers. While delivery

costs are part of running the business, timely delivery keeps customers happy and encourages

repeat purchases. In the marketing and sales function, Watsons carries out promotions and

personalizes service to attract and keep customers loyal. Marketing requires investment, but it

helps increase sales and strengthens the brand. The final primary activity is service, where after-

sales support and advice are offered both in-store and online, building trust and encouraging

customers to come back, even though maintaining these services adds to operating costs.
 Supporting these are the support activities that provide the backbone for smooth operations.

The firm infrastructure includes partnerships with local retail groups and investments in

technology that allow Watsons to scale and operate efficiently. Although these come with fixed

costs, they are essential for long-term growth. Human resource management focuses on training

pharmacists and staff to deliver expert and friendly service, which enhances customer

satisfaction but also requires spending on training programs. The technology development area

involves using advanced systems for inventory forecasting and integrated online shopping

platforms. These systems help minimize waste and ensure the right products are stocked, but

they require continuous investment. Lastly, procurement ensures Watsons buys quality products

at good prices through strong vendor relationships, directly lowering the cost of goods and

helping keep prices competitive.

To improve Watsons Pharmacy’s operations further, several strategic actions are

recommended. First, expanding localized Call & Deliver hubs closer to customers helps cut

delivery times and expenses while providing safe, convenient access to medicines and wellness

products. Second, integrating digital health services in community stores—such as virtual

pharmacist consultations and electronic prescription management—makes healthcare more

accessible and personal, increasing customer loyalty. Third, adopting AI-powered inventory

forecasting tailored for each local store can reduce overstock and shortages, which saves money

and ensures customers find what they want. Lastly, implementing flexible staffing and upskilling

programs helps keep employees motivated, reduces turnover, and maintains high service quality,

especially during busy periods.

smart logistics, marketing, and excellent service, supported by strong infrastructure, technology,

and workforce development, creates great value for customers while managing costs. By

adopting these targeted strategic improvements, Watsons can run more efficiently, reduce

expenses, and provide even better customer experiences, reinforcing its leading position in the

health and beauty market in the Philippines.