How Does Supply Chain Differ From Value Chain?

The difference between a value chain and a supply chain is that a supply chain is the process of all parties concerned with fulfilling a client request, whereas a value chain is a set of interrelated activities a company uses to form a competitive advantage.

Supply Chain is the interconnection of all the functions that start from the manufacturing of raw material into the finished product and ends when the product reaches the end customer. It forms a connection between the channel partners like suppliers, manufacturers, wholesalers, distributors, retailers, and the customer.

The process which plans and manage the supply chain operations is known asSupply Chain Management. It manages the movement of raw material, within the organization and the movement of finished goods out of the firm along with full customer satisfaction side by side.

Value Chain refers to the range of activities that add value at every single stage in designing, developing, and delivering a quality product to the customer. Value chain implies the series of business operations in which value is added to the goods and services offered by the firm so as to strengthen customer value.

Value Chain Analysis is used to evaluate the activities inside and around the organization and relating to its ability to provide value for money, goods, and services.

 

Key Differences Between Supply Chain and Value Chain

The following are the major differences between the supply chain and value chain:

  1. The integration of all the activities, persons, and business through which a product is moved from supplier to customer is known as supply chain. Value Chain refers to a chain of activities that is indulged in adding value to the product in every single stage until it reaches the final customer.
  2. The idea of Supply Chain is originated from operational management, whereas value chain is derived from business management.
  3. Supply Chain activities comprise the transfer of material from one place to another. On the contrary, Value Chain is primarily one place to another involved in providing value for price product or service.
  4. The order of supply chain initiate with product request and ends when it reaches the final customer. Unlike value chain, which begins with the customer’s request and ends with the finished product.
  5. The main objective of the supply chain is to gain complete customer satisfaction which is not with the case of the Value Chain.

 

Get in touch with the experts at Tenaxx Logistics today for more information and updates about supply chain management.