Value Chain and Supply Chain Article Analysis
The difference between value chain and supply chain has been an unclear concept for many years. Being aware of the difference between value chain and supply chain can give an organization a better understanding of all aspects of global trade. Although each view of value chain and supply chain have different objectives and unique standpoints, both are associated with processes moving products from the design table to the hands of the customer. This paper will outline those differences and explain which chain is used by Fertilizer Company LLC and why that specific approach was chosen.
Value Chain
The customer is seen as the source of value of a value chain. Like the supply chain, the value chain deals with the flow of products from company to the customer. With value chains, this flow is defined as the path from the customer to the source of the product. It is also defined as having an upward flow in the value chain management process. If there is a customer demand, they create value for the product manufactures. The focus is not on the product in value change management, it is on the customer and how a manufacture can create value in a customer’s mind. In order for a company to be profitable, a value chain must show a clear connection between what is valuable to the customer and what the company manufactures. A company’s value chain strategic focus is on things like the organizations research and development, innovations, marketing, product testing, social trend tests, current economic conditions, and alike. To maximize the value of a company’s business, it’s the value chain managers responsibility to analysis these types of issues and opportunities for worth.
Supply Chain
Opposite from value chain, supply chain management’s path is a flow from the manufacture or source to the customer. This chain is also referred to as a flow downward. In order for a
References: