Value Chain vs Supply Chain Differences Essay

In this sample essay, we will discuss the topic of Value Chain vs Supply Chain. It’s been seen that there are several people still unknown of these concepts and even if they do know what each one means. But the difference between them is not clear.

So, in this essay, we will be looking at the definition of the value chain and supply chain: the difference between the value chain and supply chain. The advantages and disadvantages of the value chain and supply chain will also be discussed.

What is Value Chain?

The value chain concept refers to when companies or businesses buy the raw material and add value to it. This concept originated from a business management perspective.

The value-adding process involves Production, Manufacturing, and other processes involved in making a finished product. Afterward, the finished product is sent to market, to be sold to customers,

What is Supply Chain?

The supply chain is the companies’ and suppliers’ network that allows the flow of information, services, goods, and so on. The supply chain concept originated from an operational management perspective.

Each step in the process from buying raw material and converting to supplying it and providing it to customers is considered under the Supply Chain.

The Differences in the Process

In this part, we will talk about the different processes of the value chain and supply, one by one.

The Value Chain process

• Logistics (Inbound): receiving raw material, running warehousing, and maintaining inventory control.
• Operations: this includes the value-adding processes example manufacturing, processing, etc.
• Logistics (Outbound): the process that looks after the out-flow of finished products.
• Marketing and Sales: This process involves getting people to buy the product.
• Services: this includes services provided to the customer in order to keep them interested like warranty service, customer help services, and so on.

The Supply Chain process

• Product development:  The product development process includes all the steps from buying raw material to making it into the final product.
• Marketing:  the goal of marketing is to get it into public eyes and get some recognition.
• Operations:  All the operations are covered in this topic.
• Distribution: The distribution of finished products to suppliers and to customers.
• Finance: the process of getting Funding and maintaining financial stability
• Customer service: it includes customer services like customer care, warranty, and guaranty services. Unlike the value chain, the supply chain also handles Customer requests.

The Advantages  of the value chain and supply chain

Here the advantages of the value chain and supply chain will be discussed.

Advantages of the Value chain

• The Improved Flow of Materials and Products:  the value chain also improves the flow of materials coming in and finished products going out.
• The Seamless Flow of Information: If the value chain is used correctly, its flow of information is almost seamless. This helps in better relations between customers and the brand.
• The Enhanced Flow of Finances:  It aids organizations in dealing with the financial flow issues and other problems related to it. This is done by enabling them to assess processes and look for weak links.

Advantages of Supply chain

• Better Flow of Materials, Products, as well as Information: Supply chain is based around the flow of material, service, and goods. So applying the supply chain system correctly provides a better flow altogether.
• Enhanced Financial Practices and Cost Cutting: The supply chain clears all the flow and allows a clearer system. This also helps in reducing the cost and capital put into the supply chain.
• Vendor Relationships: the supply chain system also improves the relationships between the brands and the vendors. Making it a win-win situation for both.

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