Supply chain, value chain — whats the difference?
A. There’s a temptation to use “value chain” and “supply chain” interchangeably, but there’s really a difference in the concepts that’s worth remembering. The supply chain model — which came first — focuses on activities that get raw materials and subassemblies into a manufacturing operation smoothly and economically. The value-chain notion has a different focus, and a larger scope. Value-chain analysis looks at every step from raw materials to the eventual end-user — right down to disposing of the packaging after use. The goal is to deliver maximum value to the end user for the least possible total cost. That makes supply-chain management a subset of the value-chain analysis.
