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1. Understanding the Distinction: Supply Chain
vs. Value Chain
Supply chain:
The supply chain includes the end-to-end process of sourcing, sourcing, manufacturing,
and delivering goods or services to customers. It involves the flow of materials,
information and finance at various stages, from supplier to producer to distributor and
finally to consumer. The main goal of a well-managed supply chain is to ensure that
products or services reach their target customers efficiently and at the right cost.
Value Chain:
On the other hand, value chain refers to the chain of activities that a company
undertakes to create value for its customers. These activities include everything from
research and development to manufacturing, marketing, distribution, and customer
service. Each step of the value chain contributes to the overall value perceived by the
customer. The primary goal of value chain optimization is to improve a company's
competitiveness by providing superior value propositions to customers.
Main difference:
Scope and purpose: Supply chain mainly focuses on the physical movement of goods,
materials and services from the supplier to the end user. However, the value chain

2. encompasses a broader range of activities that contribute to value creation, including
design, marketing and customer service.
Customer-centric approach: While supply chains emphasize logistics and efficiency,
value chains focus on meeting customer needs and delivering a unique value
proposition.
Create value: The primary goal of a supply chain is to manage costs, reduce lead
times, and improve operational efficiency. The main objective of the value chain is to
create value for customers by differentiating products, improving quality and improving
customer experience.
Internal and external focus: The supply chain is more focused on external
relationships with suppliers and distributors to ensure a smooth flow of goods. The
value chain examines both internal and external processes, looking at how each step
adds value to the final product or service.
Businesses its utilization Axolon ERP solutions uae frequently run more effectively,
providing them an advantage in the marketplace.