As we have learned, the value chain focuses on all activities – whether material or immaterial – that create customer value. When comparing classic supply chain models with the value chain approach, it quickly becomes clear that thinking in supply chains is only half the story. The problem is that many supply chain models neglect that value can be created from immaterial processes too. The reason why these models have nevertheless been so successful is that, in the last decades, customer value has been generated through production and efficient distribution. However, recently, there has been a fundamental shift towards the importance of information as an immaterial customer value.
Customers want to buy products that match their lifestyle and solve a problem they have. They want to know as much as possible about the product, have the possibility to engage and be included in the process. To achieve this, companies and customers have to share a lot of information, which has an effect on production and distribution. This requires new ways of thinking.
Thinking in value chains, for example, means focusing on the customer and allows businesses to reinvent processes and products. Let’s take returns as an example: Instead of trying to handle returns as efficiently as possible (supply chain approach), you can offer better consultation at the point of sale to minimize or avoid returns in the first place (value chain approach). The value chain approach is also useful for assessing demand by analyzing customer behavior and weather forecasts. What’s more: These two examples would also be good news for the environment. Digitalization also makes a significant contribution here.
Viewing things from a value chain perspective, helps companies become more resilient. The value chain is like a blueprint for generating customer value. It holds the information on why a product is developed and how. Even if manufacturers or suppliers have to screech to a halt due to unexpected events such as natural disasters, pandemics or war, this blueprint remains. Companies can form partnerships with new businesses, making their value chains more robust.