Marketing the Value Delivery Network Is Comprised

Marketing

The value delivery network is comprised of all direct participants in the industry in your area, and it is important to understand the ways in which supply chain management contributes to the value delivery network. Suppliers, intermediaries, agents and logistics partners are all part of the supply chain. Participants in the industry manage the supply chain in order to extract value that competitors cannot, either by moving goods around more cheaply, or more quickly, or preferably both, than the competitions. There are several different actors within the supply chain whose contributions to the value delivery network are relevant -- merchants and facilitators are two of the most important.

Priem and Swink (2012) view the issue of supply chain management through the resource-based theory of the firm. They argue that firms can gain competitive advantage by effectively managing key inputs. This means that they are able to find the best goods at the best prices from the merchants, and bring those goods to market in the most effective way (price or speed) through the skilled management of facilitators. Firms that are able to consistently manage the key resource (inputs) are going to have long-run competitive advantage over their competitors.

Seuring and Muller (2008) make the point that it may be possible to establish supply chain management as a source of sustainable competitive advantage, if the supply chain management systems themselves are sustained. The authors note that when a firm develops competencies in supply chain management that its competitors do not, it gains market advantages that, if the supply chain management is sustained, may be hard for competitors for replicate.

Within the framework of the value delivery network, firms have a number of different options of merchants and facilitators. In most situations, competitors will also have access to the same merchants and facilitators. Thus, supply chain management is the only real differentiating factor between firms. The value derives from the strategic use of the assets that exist within the value delivery network, and the superiority of that use vs. The way the competitors utilize those same assets.

In addition to seeking to obtain lasting competitive advantage, supply chain management can also reduce risk associated with one-off events. Chopra and Sodhi (2004) note that effective supply chain management not only provides advantage on a day-to-day level but also can deliver superior results in the event of major events that affect multiple companies within the industry. They note an example where a fire at a Philips plant in Albuquerque damaged millions of microchips. One customer, Nokia, was relatively unaffected while rival Ericsson would lose around $400 million due to supply chain disruption. The moral of this story is that within the value delivery network, there are many linkages. How firms work within the value delivery network to manage their supply chains will dictate how competitive they are on the global stage.