11.2 Supply chain management and customer value
Value, in the context of supply chain management, has emerged as a feature of fundamental significance. This is because supply chain management is focussed on providing system wide optimisation of resources while producing superior customer value. If we look at the traditional concept of logistics management, we see that the focus of logistics management had been on reducing transportation and distribution costs of the firm. The logistics initiatives were also concerned with customer service and its impacts on value. The understanding gained in those initial phases of logistics management, even if the focus at that stage was confined to the level of the firm, continue to be relevant as the basic parameters of customer value remain the same. The concept of value, however, needs to be appreciated in a much broader context in the supply chain framework where optimisation and value creation extend beyond the corporate boundaries to embrace other partners in the supply chain.
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