Logistics and Supply Chain Management, 6th Edition

The supply chain becomes the value chain

Of the many changes that have taken place in management thinking over the last 30 years or so, perhaps the most significant has been the emphasis placed upon the search for strategies that will provide superior value in the eyes of the customer. To a large extent the credit for this must go to Michael Porter, the Harvard Business School professor who, through his research and writing, has alerted managers and strategists to the central importance of competitive relativities in achieving success in the marketplace.

One concept in particular that Michael Porter has brought to a wider audience is the ‘value chain’:5

Competitive advantage cannot be understood by looking at a firm as a whole. It stems from ...