DB Forum 1 Adding Value through Supply Chain Management
Dale Crowe

Economic Theory of Adding Value through Supply Chain Management Young (2012) writes that supply chain management (SCM) is a function of collaborating firms working to improve operating efficiency and to leverage strategic positioning. In addition, Young references this function as not only the physical attributes of product distribution, but also to include related information, such as production or delivery status, and the capability to access such information. Such capabilities allow SCM to be an important link in fulfilling customer needs and providing value. Young adds that in the current customer-driven market, the perceived value of the entire relationship with a company has become most important to the customer; as the measurement of a company’s product and service qualities has progressed from internal quality assurance to external customer satisfaction to customer value. The complete SCM process and emphasis on added value is a reason customers choose one company’s product or service over another; as the entire range of product, services, and intangibles combined make up the perceived value of a company’s brand and image (Young, 2012). Customer value is important as it drives changes, improvements, and innovation. In a customer-driven market, companies need to differentiate themselves, as many cannot compete on price alone. Value-added offerings are a way that companies can separate themselves from competitors, while providing more profitable pricing structures (Young, 2012). The supply chain strategy can be determined by the type of products or services offered and the value of the various elements of the particular offering to the customer (Young, 2012). As Young states, the supply chain should be included in any product and sales strategy and could even provide a company