In the B2B universe, understanding the difference between the supply chain and the value chain is fundamental to optimizing operations and maximizing customer satisfaction.

Although 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 necessary to transform raw materials into products and deliver them 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 reach the right place at the right time and in the right conditions, thus maximizing customer satisfaction and operational efficiency.

On the other hand, 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 perspective.

This includes innovation and design, product development, marketing, and market research.

Unlike the supply chain, which considers operational and logistical management as paramount 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 Production and Product Delivery

The concept of the value chain was created in 1985 by Michael Porter, one of the foremost experts in modern management.

For Porter, customer value begins long before the product is delivered, starting at the idea’s conception.

For example, in developing a new product, market research to understand customer needs and desires is a crucial 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 support activities.

Primary activities are directly related to creating, maintaining, and supporting the product or service, and include operations (production), inbound and outbound logistics, marketing, sales, and services such as installation and repairs.

Support activities provide the necessary services for primary activities to occur efficiently and include company infrastructure, human resource management, and technology development.

Each stage in the chain adds some value to the product or service, and this final sum differentiates the company from its competitors, thus increasing the perceived value by the customer.

Effective Management of the Supply Chain and Value Chain

Integrating value chain thinking into the supply chain can create significant value for customers that goes beyond the cost of goods or services provided.

Therefore, understanding the difference between the supply chain and the value chain can enhance 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 how they create and deliver value to their customers, increasing their competitive advantage in the B2B market.

At Mercadoe, 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 aspects.

Learn more about Mercadoe’s e-Procurement solution by clicking here.
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