What Is Value Chain In Services & In Manufacturing?

1. There is nothing truer than the fact that “Customers always purchase a benefit or a solution when they buy a product or service.â€� We may like to take this one step further by saying that customer buys something that provides acceptable value at the time of purchase.  
2. The value derived by a customer is a sum total of value added by a chain of entities. Most companies have other firms or persons on the supply side (vendors, partners, infrastructure providers, material and information providers, manpower providers, and the like). Similarly, there are entities on the customer side (integrators, marketing partners, distributors, dealers, agents, buyers, purchasers, influencers, end users)
3. The entire set comprising of the supplier sequences, the company, and the customer sequences create the value chain. The efficiency and the effectiveness of this value chain decide whether the customer will perceive and derive value (an acceptable combination of quality and prices) from the offering. 

Here are some examples of effective users of Value Chain in services and in manufacturing- 

• GE considered its value chain pro-actively and ensured that suppliers developed world class abilities to enhance end user value.
• Airtel has been considering a large value chain of partners via outsourcing and insourcing activities.
• A credit card company finds that the agencies who bring in applicants are key value chain partners crucial for its success.
• BPO & KPO organizations see that forecasting, scheduling, resource management form key drivers of business and some of the best business impacting projects have been those that engaged the client (who is also the supplier). 
• Some of the best cargo and logistics companies have worked with partners on both sides (supplier side and customer side) to achieve benchmarks in excellence. 
• Online sellers like eBay depend on partner capabilities to ensure great delivery for their tangible goods. 
• Automotive giants are very detail oriented users of value chain learning. 

Value Chain includes interlinked value adding activities and consists of inbound distribution, internal operations, outbound distribution, marketing & selling, and after sales service. These are supported by purchasing or procurement, research and development, human resource development (HRD), and corporate infrastructure.