What is the difference between supply chain and value chain?

Many people want to know what is the difference between the supply chain and the value chain? And here in this article, we will answer all the questions related to the article. We will learn about the main objective of both terms in business management and operations. The two terms overlap although each of them has a different goal from the other, yet they represent operational efficiency, competitiveness, and also customer satisfaction.

The Fundamental Difference Between the Supply Chain and the Value Chain

• Supply Chain: It represents the flow of information, goods, and services from suppliers, manufacturers, and distributors until reaching customers. The supply chain focuses on reducing costs and ensuring smoothness and efficiency.
  
• Value Chain: It is the one that focuses on adding real value to every stage of the work starting from product design to after-sales service. The main goal of the value chain is reaching customer service and achieving competitive advantage.
  

What Are the Main Differences Between the Value Chain and the Supply Chain?

1. Objective

• Value Chain: What is the difference between the supply chain and the value chain? The value chain works through innovation, added value, and quality to achieve customer satisfaction.
  
• Supply Chain: It works on ensuring the obtaining of products at the lowest costs at the same time in a suitable way.
  

2. Focus

• Value Chain: The value chain is characterized by innovation, differentiation, and achieving the customer experience with the best quality.
  
• Supply Chain: It is characterized by speed, efficiency, and cost reduction.
  

3. Scope

• Value Chain: It is a broader and more comprehensive scope that includes development, marketing, and services.
  
• Supply Chain: The supply chain is characterized by working on operational processes with high efficiency such as manufacturing, distribution, and also purchasing resources.
  

Are Supply Chains Considered Part of Value Chains?

We can answer this question with the word yes. Supply chains are considered an integral part of the value chain as they support added value such as marketing and customer service.
For example: the supply chain works quickly and with high efficiency to enhance customer satisfaction, which shows us that supply chains add indirect value to value chains.

What Is the Difference Between SCM and VCM?

• SCM (Supply Chain Management): It is concerned with planning and control through resources until reaching the customer.
  
• VCM (Value Chain Management): It is concerned with all the activities of the company in terms of research, development, support, and marketing as it works on highlighting the added value.
  

What Is an Example of a Value Chain?

Apple Company (Apple):

• Inbound Logistics: Works on selecting the best components.
  
• Operations: A high-quality and advanced product is manufactured.
  
• Outbound Logistics: Distribution takes place worldwide.
  
• Marketing and Sales: Various and distinctive products are launched into the labor market.
  
• Services: Supporting and updating software takes place.
  

All these stages can achieve strong customer loyalty and added value for customers.

What Are the Three Types of Value Chains?

1. Global Value Chains (GVCs): These global chains spread and appear across many countries.
   
2. Sectoral Value Chains: Represented in a certain industry such as furniture and fashion.
   
3. Company-Level Value Chains: They are internal processes that achieve additional and competitive advantage.
   

What Is a Supply Chain with an Example?

Supply chains include traders, suppliers, distributors, and manufacturers.

Example: A car company buys spare parts from Russia, the car is manufactured in Russia, shipped to Europe, and sold in French stores. This whole process represents the supply chain.

What Are the Five Stages of the Supply Chain?

1. Planning – Represented in placing the order and preparing materials.
   
2. Sourcing – In this process, suppliers are selected.
   
3. Manufacturing – In this stage, products are produced.
   
4. Distribution – Where the product is delivered directly to the customer.
   
5. Returns – A department specialized in returns and repairs.
   

What Is a Real Example of a Supply Chain?

Amazon represents a live example of an effective supply chain, starting from warehouses to customer service and fast distribution.

What Are the Four Types of Supply Chain Management?

1. Make-to-Stock: Manufacturing for storage.
   
2. Build-to-Order: Manufacturing the product according to order.
   
3. Continuous Replenishment: Continuous replenishment of inventory within the company.
   
4. Channel Assembly: Assembly takes place at the distribution stage.
   

What Is the Value Chain Framework?

It is the framework in the value chain presented by Professor Michael Porter and divided into several sections:

• Primary Activities: (Operations, inbound and outbound logistics, marketing, and sales).
  
• Support Activities: (Such as HR, technological development, infrastructure, and procurement).
  

What Is the Agile Supply Chain?

We ask what is the difference between the supply chain and the value chain? It is a supply chain that works with flexibility and quick responsiveness to sudden changes in markets.

Example: Zara company, which adjusts and modifies designs very quickly according to fashion.

What Are the Five Types of Supply Chains?

1. Fast Chain – Focuses on value and cost.
   
2. Agile Chain – Focuses on responsiveness.
   
3. Agile Chain – Focuses on responsiveness.
   
4. Customized Chain – Responds according to customer needs.
   
5. Hybrid Chain – A mixture of more than one type of chain.
   

What Are the 7 Rs in the Supply Chain?

• The right product.
  
• The right quantity.
  
• The right condition.
  
• The right place.
  
• The right time.
  
• The right customer.
  
• The right cost.
  

What Are the 5 C’s in Supply Chain Management?

• Cost: Setting the initial cost of the product.
  
• Capability: The ability to carry out the competitive process.
  
• Customer.
  
• Collaboration.
  
• Culture (organizational culture).
  

Many people want to know the difference between the supply chain and the value chain, as the two terms intertwine to achieve a company’s success. In this article, we hope it has been to your liking, as we have highlighted the essential points.