Both the value chain and the supply chain are essential for analyzing competitive advantage. The value chain encompasses activities that generate value within an organization, while the supply chain focuses on forecasting, purchasing, production planning, warehousing, and distribution. The value chain is a subset of the supply chain that includes activities that add value. Figure 1 provides a visual comparison between these two chains.
From the customer's perspective, the value chain examines why a product holds value for them. On the other hand, the supply chain starts with product components and ends with delivering them to customers. It is crucial to comprehend and distinguish these terms as they are often mistakenly used interchangeably.
The supply chain is a series of processes and actions that aim to transport a product from its raw material state to the customer's hands. It may also involve deli
...vering the product to recycling companies after it has been used. The evolving customer requirements can impact the supply chain, altering purchasing and transportation procedures. On the other hand, the value chain consists of processes, actions, and services that aim to enhance a product's value. This includes manufacturing as well as additional services like customer service and warranties.
The value chain assesses the perceived value of a product through customer satisfaction, production quality, and peripheral services. Despite being distinct entities, the value chain and supply chain work together seamlessly. It is crucial to acknowledge that each customer's value chain is distinctive as it depends on their willingness to pay for different product features. The supply chain is impacted by the customer's requirements, which are influenced by their value chain. Ultimately, customers will evaluate the price o
the product based on its unique characteristics, thus further shaping the overall value chain.
The value chain determines customer priorities and therefore influences the supply chain. Any changes made to the value chain will also impact the supply chain. Essentially, the structure of the supply chain is determined by the value chain. The value chain is a strategic tool used to analyze the competitive distribution process.
Additionally, the value Chain is included in the supply Chain in which account for value added activities as demonstrated in fgure 1. Value Chain starts time and money; whereas the supply Chain starts from product components, and hain is related to customer's need in the way that it will change depending on the services aimed to add value to the item. It includes the steps of fabrication of the warranties. Value chain defines the perceived value of the product depending on the satisfaction of a customer's need, on the quality of the production, and depending on Value chain and supply chain are different but complementary things.
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