Supply Chain VS Value Chain: A Detailed Comparison

The supply chain and value chain occupy an important factor in our sales process. In order to save our logistics costs, we can choose high-quality supply chain and value chain, suppliers. Then, this article will introduce the advantages and differences between supply chains and value chains, the practical steps of supply chains, help you understand the importance of supply chains and value chains, and adjust supply chain and value chain strategies to screen out high-quality value chains and supply chains. Providers, providing free solutions for merchants.

What is the Meaning of a Supply Chain?

Supply chain refers to the core enterprise, which can link suppliers, manufacturers, and distributors and finally deliver products to consumers through a systematic sales network. Successful supply chain management coordinates and integrates all activities in the supply chain into a seamlessly integrated process.

1. Steps in the Supply Chain

  • Planning

Design all supply chain processes in accordance with the principles of minimum consumption, minimum emissions, and optimal performance to achieve the best ecological benefits, such as optimizing inventory planning, developing raw materials, and reusable recycling plans. As a fact, the low-carbon supply chain plan fully considers the low-carbon emission requirements of the integrated supply chain and integrates this requirement into all links from product design, packaging, order batch, specification, weight, delivery method, delivery time, distribution network design, material handling, etc.

  • Procurement

Establish a procurement strategy, select green suppliers, select products with green environmental protection labels and recycled low-polluting raw materials and components, and adopt green inward transportation and material handling links.

  • Manufacturing

Adopt environment-based design to consider the green design concept of the product life cycle in the product development stage, and consider the disassembly and recyclability of products; adopt green production equipment and facilities for energy saving and emission reduction; adopt the concept of lean manufacturing to maximize the Minimize waste, etc.

  • Delivery

From order acceptance, and order processing, to receipt, inspection, warehousing, sorting, packaging, delivery, transportation organization, network design, and other links, low-carbon, and green environmental protection management and technical means are adopted. Low-carbon delivery is the goal of achieving minimum emissions per unit of output by increasing unit volume or reducing unit fuel consumption. Low-carbon transportation and low-carbon warehousing are the main links of low-carbon delivery.

  • Recycling

Refers to the adoption of green management and technical means in recycling planning, recycling authorization, channel recycling, direct recycling, dismantling and recycling, and reverse logistics.

2. Supply Chain Best Practices

  • Simplify the Procurement Process

The company implements an excellent supply chain management system, which can help us effectively save procurement costs and make our procurement more convenient.

  • Improve the Manufacturing Process

Lean supply chain management first gained popularity in manufacturing, thanks to the rapid and dramatic improvements it enables. In this way, the manufacturing process can be improved to reduce required resources and waste while ensuring optimal operational performance.

Quality is an important part of lean thinking. When there are no flaws in the process, water is reduced and the tissue is more efficient. Better quality means fewer customers returning goods, reducing the resources required for quality control, repairs, and returns.

Organizations adopting lean manufacturing practices improve their supply chains by examining their routes, equipment, and bills of materials to find areas for further improvement.

  • Reduce Waste in Warehousing and Transportation

We should take care of warehouse processes examined to identify areas where the waste of resources and non-value-added processes can be reduced. One of the areas companies should continue to work on is reducing unnecessary inventory. The accumulation of inventory requires companies to devote capital and other resources to storage and maintenance. Reducing unnecessary inventory helps simplify the supply chain and minimize storage space.

What is Value Chain?

A value chain refers to a series of activities carried out by an enterprise that conforms to a specific pattern. In other words, the value chain is the value-added link or chain of the products or services produced by the enterprise, and each activity in the value chain increases the value of the products or services.

1. Two Types of Value Chain

There are two types of the enterprise value chain, one is classified according to dimension, and the other is classified according to the main body. The value chain adopts the subject scope classification, which is divided into an internal value chain and an external value chain.

  • Primary activities

Primary activities refer to activities that can bring added value, make customers benefit, and show the uniqueness of the company. They are an important part of an enterprise. It usually includes inbound logistics, outbound logistics, and service.

  • Support activities

Compared with primary activities, support activities refer to secondary activities and other activities conducive to the success of an enterprise, including infrastructure operation, procurement management, technology development, and human resource management.

2. Benefits of Value Chains

Value chains can help our business understand and evaluate cost efficiencies better. Value chain analysis can help our business to obtain higher profits from the following aspects. It can help us correct previous wrong views and help us make better decisions. Familiarize ourselves with the relationship between different areas, which can reduce our costs, and improve our cost advantage.

Key Differences Between Supply Chain and Value Chain

There are differences between the supply chain and the value chain.

  1. Understanding

A supply chain is a business transformation tool that minimizes costs and maximizes customer satisfaction by delivering the right product at the right time, at the right place, and at the right price, while the value chain is a way to gain competition The way of advantage through which a business can beat its competitors and meet customer requirements.

  1. Relationship

The supply chain is about operation management. It is the integration of all activities, personnel, and businesses that move products from one place to another. Simplify supply chain processes and improve visibility to diagnose problems and find appropriate solutions faster. It is obsessed with adding value to the product at every step until it reaches the end consumer.

  1. Purposes

A supply chain is the steps required to deliver products to customers. It involves all aspects of ensuring customer satisfaction. Having an interconnected network of suppliers and distributors will reduce delays and increase customer satisfaction. The value chain is about providing customers with the best price, enhancing product innovation, and increasing customer loyalty is the process of adding value to the materials sold to customers, to enhance the market competitiveness of enterprises.

  1. Sequence

A supply chain is the flow of materials, products, and funds used to create and sell products to customers. A value chain is an opportunity to add value to a business. It enhances the value of business products, ensures that any shortages are resolved, develops product plans, and collaborates with others to gain a competitive advantage.

Conclusion

In order to improve customer expectations for delivery time and convenience, many businesses choose to standardize their processes to improve order fulfillment efficiency. But this process can put some pressure on the supply chain. Honest FulPhilment has a variety of service models to help small and medium-sized sellers solve problems encountered in order fulfillment. If you want to link more content about the value chain and supply chain, you can contact us.

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