Section 4: What could I do differently?

Understanding value

Supply chains can make themselves more competitive by improving the value they deliver. The basic reason for getting closer to your supply partners is to improve the value you jointly deliver, whilst making sure that you both continue to do well commercially. There is no point in improving the value delivered to the customer at the expense of your own commercial returns, or those of your partners.

So, how do you improve the value you deliver? To answer this question, it is useful to think about Value in the following simple, but powerful terms:

So, when a customer buys something, their sense of the value of what they are getting increases when they get more benefits, and decreases the more they have to pay to get these benefits. This applies whether the customer is receiving a product or a service.

Activity: Ways of improving value of products and services For each of the following products and services, put yourself in the position of the end customer. Products Services Mid range family car Visit to the hairdresser Bar of chocolate IT support for a business Select 'new journal entry' in your MyStuff Learning Journal to record your ideas about how the supply chain could improve the value it delivers, using the definition of value above. Now read our thoughts on ways of improving value in the discussion.