Chapter 12, Problem 12.1DQ

Summary Introduction

To discuss: The comparison and contrast of upstream and downstream partners in an organization supply chain as well as the reason why the value delivery network may be better to utilize than the supply chain.

Introduction:

A supply chain is a system between an organization and its suppliers to distribute and produce a particular product. The supply chain of any organization takes care of every step involved, from the delivery of a product to final consumers. It is divided into two parts: downstream and upstream partners.

Explanation of Solution

The comparison and contrast between upstream partners and downstream partners:

• Upstream partners: The upstream partners comprises of all the firms which help the company in manufacturing a product or service.
• Downstream partners: Downstream partners take care of making a product available to consumers in an efficient way. It includes all the middlemen such as wholesalers, dealers, and retailers who are links between the consumer and organization. Downstream supply chain is also called as distribution channel or marketing channel.

The reason the value delivery network may be better to use than a supply chain:

The term supply chain in an organization just talks about how to make and sell a product. However, prior to that, it is important to know the market demand for that product. Therefore, the demand chain plays a more major role than the supply chain, as it talks about the response and sense approach of the organization.

Even the demand chain does not explain the complete operation of the business. Many organizations now follow complex and continuous processes of the value delivery network.

The main focus of the value delivery network is in improving the performance of the entire process including the company, its suppliers, distributors, and finally, its consumers. Therefore, the value delivery network gives the complete view of the business. Thus, it is better to use a value delivery network than a supply chain in any business.