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Why is “value delivery network” a more relevant term to use than “supply chain”?

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Stephen Hammel eNotes educator | Certified Educator

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Let's start by looking at definitions.

A supply chain is a network between a company and its suppliers to produce and distribute a specific product to the final buyer. This network includes different activities, people, entities, information, and resources. The supply chain also represents the steps it takes to get the product or service from its original state to the customer. (https://www.investopedia.com)

Value delivery network is a part of supply chain of a company and includes all its direct participants involved in production, distribution, marketing, customer service, etc for given geographical area. (https://www.mbaskool.com)

On the surface, they seem like very similar terms. The linguistic shift, however, comes from the term "value." A supply chain is a network that procures, produces, and sells a product. In examining the supply chain, we look specifically at what each player does to get the product to the customer.

In a value delivery system, the focus is not on the product specifically, but on what value each component of the system adds to the product.

We know that customers will spend a little more for a product that is of higher quality. That quality comes in many forms. When we look at what customers expect after the sale, discount customers have a very different expectation than customers in high-end markets.

Value includes ideas like the quality of raw materials, craftsmanship, customer service, color choices, readable instruction manuals, warranty conditions, delivery time, post-sale follow-up, and every other service you can place on any given product.

Anybody can make a widget. Not everybody can make a widget in sixteen colors, with on-site support, 24/7 customer help lines, next-day delivery, and a three-year warranty that covers return shipping and no-questions-asked replacement.

Looking at your value delivery system will move you away from selling just another widget and toward selling a widget people tell their friends about.

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