ABSTRACT
The differences between the definitions of the supply chain and the value chain are illustrated in Figure 1.1. In Figure 1.1 the supply chain is shown as a series of arrows moving from the raw materials stage to the final customer. Each of these arrows represents an individual firm, which has its own value chain. In Figure 1.1 this value chain is enlarged for one firm in the supply chain so that some of the internal functions of the firm that add value can be shown. In this example note that purchasing, marketing, and operations management are shown as part of the firm’s internal value chain. These are internal functions of the firm and they occur in every firm that is a member of a supply chain.
