If you’ve been exploring career options in business or manufacturing, you may have come across the terms supply chain management and value chain management. These functions overlap and complement each other, focusing on different components of operational processes.
You can discover the differences between these processes and pursue related career paths by enrolling in a degree program like the online Master of Science (M.S.) in Supply Chain Management program from Florida Institute of Technology. This area of study prepares you to excel in a wide array of managerial positions in the critical field.
Explore the Difference Between Supply Chain and Value Chain
If you’re like most people, you may not be sure what the differences are between supply chain management and value chain management. They both relate to the processes involved in getting goods from the design board, through manufacturing and into the hands of consumers. Yet each discipline views the process from a unique perspective and standpoint, and with different objectives.
Learning the difference between supply chain management and value chain management can help you gain a better understanding of manufacturing, retailing, consumer demand, and other aspects of the global supply chain and international trade. Once you develop this understanding, you can make an informed choice regarding the educational and professional path that suits your interests.
What Is Supply Chain Management?
The objective of supply chain management is to guide the flow of products from raw materials through manufacturing through distribution to consumers. A whole series of related processes takes place along the supply chain. Effective supply chain management ensures the successful control and completion of these processes in order to deliver goods to end-users while remaining efficient, on budget, on time and competitive. Supply chain management consists of five main elements:
- Planning and designing a product to meet consumer demand
- Sourcing the materials or components needed to produce the goods
- Manufacturing the product
- Delivering the product to the buyer
- Accepting returns of defective products
In supply chains, the primary focus is on costs of materials and efficient delivery. Effective supply chain management reduces costs to the consumer and increases profits for the manufacturer.
Successful supply chain managers bring great value to their employers. They contribute to the organization’s success by fulfilling roles such as:
- Choosing and managing suppliers of components or raw materials
- Strategic planning for production and delivery to support marketing efforts, special offers and seasonal demand
- Monitoring inventory and product flow to avoid supply shortages
You can fast-track a career in supply chain management by earning an M.S. in supply chain management. This advanced degree provides a strong foundation of business knowledge, along with the specialized skills needed to compete for the most desirable supply chain management jobs. Whether you visualize a career with a manufacturing company, service provider, retailer or operations center, supply chain management could be a great choice.
What Is Value Chain Management?
Value chain management also concerns the flow of goods to consumers but takes a different approach. You might say it’s a complementary view of the supply chain process. The difference between the two is that in supply chain management, the flow is down — from the source to the consumer. In value chain management, the flow is up — from the consumer to the source.
In value chain management, the consumer is the source of value. Consumers create value for manufacturers when they demand products. The focus is not on the cost of goods, as in supply chain management, but on creating value from the consumer’s perspective.
To properly manage the value chain, companies often split operations into primary activities, such as logistics and production, and support activities, such as human resources, marketing and information technology. Creating a profitable value chain requires a connection between what customers value and want, and what the company produces. Value chains are strategic, placing emphasis on:
- Innovation
- Research and development
- Product testing
- Marketing
- Social trend analysis
- Economic Conditions
Value chain managers are typically responsible for analyzing issues and opportunities to provide insight and maximize the value created for a business. They may use supply modeling to explore options and mitigate shortages. Other duties might include preparing product plans or collaborating with customer service and marketing departments on activities that add value to the consumer.
Career Paths in Supply Chain vs. Value Chain
Careers in supply chain management and value chain management are diverse, rewarding and exciting. Competing for positions in these related yet distinctive fields requires a top-notch education, such as that provided by Florida Tech’s online M.S. in supply chain management. Choosing the best career lies in deciding which aspects of supply chain processes you would like to focus on, be it from the consumer perspective or the manufacturing and production perspective.
Now that you know more about the differences and similarities between supply chain and value chain management, you can better choose a career that fits your abilities, interests and career goals. Through exploring your professional aspirations, you can plan your educational path accordingly.
Learn more about the online M.S. in supply chain management from Florida Institute of Technology.
