In the B2B universe, understanding the difference between supply chain and value chain is essential to optimize operations and maximize customer satisfaction. While both concepts are crucial to a company’s success, they focus on different aspects of the business.
The supply chain refers to the operational and logistical flows required to transform raw materials into products, as well as delivery to the consumer. The focus is on optimizing purchasing operations, reducing costs and improving efficiency in delivery logistics.
This encompasses activities such as production, storage, transportation and distribution. The supply chain must ensure that the right products arrive at the right place, at the right time and in the right condition, thereby maximizing customer satisfaction and operational efficiency.
The value chain places the customer as the protagonist and encompasses all activities that add value to the product or service from the customer's point of view. This includes everything from innovation and design to product development, as well as marketing and market research.
Unlike the supply chain, which considers operational and logistics management to be the most important and ends with product delivery, the value chain focuses on the complete customer experience. In this sense, after-sales processes, such as customer support and maintenance services, are also considered fundamental in the process.
Value chain goes beyond product production and delivery
The concept of value chain was created in 1985 by Michael Porter, one of the greatest experts in modern management. For Porter, customer value begins long before the product is delivered; it begins with the conception of the idea. For example, when developing a new product, market research to understand the customer's needs and desires is a fundamental step that can define the success or failure of the launch.
Porter's value chain is divided into two main categories of activities: primary and supporting. Primary activities are directly related to the creation, maintenance, and support of the product or service, and include operations (production), internal and external logistics, marketing, sales, and service, such as installation and repair.
Support activities provide the services needed for primary activities to occur efficiently and include company infrastructure, human resource management, and technology development. Each step in the chain adds some value to the product or service, and it is this final sum that differentiates the company from its competitors, thus increasing the value perceived by the customer.
Effective supply chain and value chain management
Integrating value chain thinking into your supply chain can create significant value for customers that goes beyond the cost of the goods or services provided. Understanding the difference between supply chain and value chain can help boost your company’s competitiveness, increase profitability, and build brand credibility.
By strategically aligning these two perspectives, companies can not only optimize their operations, but also innovate in the way they create and deliver value to their customers, increasing their competitive advantage in the B2B market.
At Mercado Eletrônico, we understand the importance of balancing operational efficiency with innovation and value creation. Our e-Procurement solution is an excellent tool to strengthen both supply chain and value chain issues.
Learn more about Mercado Eletrônico's e-Procurement solution by clicking here.
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