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International Business (Liberty University)
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W4 – DISCUSSION – ADDING VALUE 1
Adding Value through Supply Chain Management
XXX
School of Business, Liberty University
Author Note
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I have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to XXX
Email: [email protected]
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W4 – DISCUSSION – ADDING VALUE 2
Adding Value through Supply Chain Management
We live in an age where technologies and consumer habits are evolving at a rapid pace.
The factors such as globalization, competitive markets environments, and consumers' demands
for much higher value against their spending have made service providers offer dynamic sets of
a value proposition for consumers. As Ida (2017) emphasized, service providers need to reach
the competitive edge to retain their customers. Ida (2017) further emphasizes that it is even
harder to retain customers unless they derive a sense of value from their services. The
continuous challenge of value creation for service providers is the reality of our time. The
industry of supply chain management is no exception. The industry has its competitive
environment and challenges of creating value-proposition to acquire and retain its clientele
across the globe while handling geo-economic and regulatory compliances.
Kovanoviene et al. (2021) link the success of an organization with its ability to create
unique perceived value for the consumer. What is a value, and how a consumer perceives it? The
degree of derived value may vary from consumer to consumer and the nature of products and
service offerings. Several academic studies categorize different types of values based on
products and services. Kovanoviene et al. (2021) refer to one of the types, functional value, as a
benefit for consumers based on the value from price, quality, and range of assortment of the
product or services. Due to the nature of products and services offered by the supply chain
management industry, its consumers primarily look to achieve functional value from their
transactions.
Supply chain management based on value-added solutions for its customer drive its
competitive edge against competitors. As service provides, the critical questions include whether
the client needs 24x7 premium customer service and a fast delivery schedule at a higher cost than
a minimal logistic service and longer delivery timeline at a lower cost. The answers may vary
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W4 – DISCUSSION – ADDING VALUE 3
from customer to customer based on their needs and nature of business. Service providers create
value for their customers through an extensive understanding of their needs and requirements for
customers. This particular aspect of value creation origins back in the process of marketing
products and services. Rutner and Shepherd (2017) argue that marketing has been seen as a core
component of supply chain management. Liberty University (2021) emphasizes that creating
customer value is the driving force behind a company's goals and that supply chain management
is a necessary means. Customer retention is essential for the sustainable growth of a service
provider. Ida (2017) highlights that retaining a consumer can be up to ten times cost-effective
than attracting a new one. Hence, service providers must offer their customers the best suitable
value proposition consisting of services, relationships, and experiences (Liberty University,
2021, p. 202) for sustainable business growth.
Application and Example
Özlen and Handukic (2013) emphasize that the essential purpose of any retail business is
to dynamically maintain its responsiveness to changing trends through offering new designs for
all of its customers at an affordable price. The business model and value proposition strategies
practiced by Zara, one of the leading fashion retail chains globally, are remarkably aligned with
the above narration of the essential purpose of retail business. Zara has successfully integrated
the role of the supply chain into its value proposition for its customer. Through efficient use of
supply chain, robust inventory management, quality control, attractive merchandising, customer
services, multiple marketing initiatives, and affordable prices, Zara has amicably maintained its
value proposition and customer base. Hence, it is essential for service providers in supply chain
management to employ a combination of strategic benefits best suitable for a client to offer
value-added solutions.
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W4 – DISCUSSION – ADDING VALUE 4
Questions for Classmates
In your opinion, how supply chain management decisions may be influenced by the
balancing of an integral aspect of cost and quality?
Summary
The dynamics of businesses, industry trends, technological advancement, and consumers
behavior have significantly transformed. With ever-changing business challenges in our world
of globalization and international trade, the role of supply chain management has evolved
exponentially. The need to create sustainable value for customers through strategically
integrating value-added solutions is critical for service providers for long-term business growth.
References
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W4 – DISCUSSION – ADDING VALUE 5
Holy Bible, New International Version®, NIV® Copyright ©1973, 1978, 1984, 2011 by Biblica,
Inc.® Used by permission. All rights reserved worldwide.
Ida, E. (2017). The Role of Customers’ Involvement in Value Co-creation Behaviour is Value
Co-creation the Source of Competitive Advantage? Journal of Competitiveness, 9(3), 51–
66. https://doi.org/10.7441/joc.2017.03.04Kotter, J. P. (2012). Leading Change, With
a New Preface by the Author. Harvard Business Review Press.
Kovanoviene, V., Romeika, G., & Baumung, W. (2021). Creating Value for the
Consumer Through Marketing Communication Tools. Journal of
Competitiveness, 1, 59–75. https://doi.org/10.7441/joc.2021.01.04
Özlen, M. K., & Handukic, I. (2013). Fashion Industry Supply Chain Issues: Zara (Azel France).
European Researcher, 47(4–3), 999–1008. Quigg (2021)
Rutner, S. M., & Shepherd, C. D. (2017). Is Marketing Still Part of Supply Chain Management,
and Should Marketing Academics and Practitioners Care? Atlantic Marketing Journal,
6(1), 111–122.
