Comparing Value Chain and Supply Chain

https://www.qstockinventory.com/blog/comparing-value-chain-and-supply-chain/ In business, there are certain processes that need to be done if anyone is to see any profits. One such process is implementing an effective value chain. It's sometimes easy to confuse the value chain with the supply chain. There is a difference between the two, though seemingly subtle, but a big difference. We are going to take an in-depth look at what a value chain is and we'll also review some similarities and mostly the differences between that and a supply chain. Michael E. Porter's definition of Value Chain Simply put, a value chain is the set of input activities that a company carries out in order to create value for its valued customers. Sounds like a mouthful but it's really simple. In order for companies to make money, they have to create a product. This often involves finding the raw material for manufacturers or just simply packaging and marketing for retailers. What you need to ask yourself is how your company takes whatever business input it has and transforms that into outputs to be presented to its customers. The trick is doing this in such a way that the outcome of the whole process is having an output that is of higher value than the whole process of creating it. How much profit a business makes is determined by the quality of the value it creates. The reason every high-end store charges considerably more for their goods and services is because they have created better value for their customers. Either that or they just simply target wealthier clients who can spend more. But with wealth comes higher standards and expectations, which means the store has to be able to provide better and more suited products to satisfy their clients' demands and expectations. Simply put: The value a business creates and captures - the cost of creating and capturing that value = their profit margin Porter proposed a general-purpose viewpoint of the value chain. He says that the way a co