What's it all about
What is a value chain?
Things we buy rarely come from a single origin, but have travelled along a chain in order to reach us. A bottle of wine for example, passes a lot of links in the chain on its journey from research in a lab to fruit on the vine, to the bottle of wine being bought by a consumer. This chain is often known as a supply chain.
A supply chain becomes a value chain when what consumers want is made the priority, and all the links in the chain work together to deliver this in the most efficient way.
Supply chains focus on creating consumer demand for products, pushing products through the chain of suppliers, distributors and so on, and convincing consumers to purchase.
Value chains use the wants and needs of consumers to pull products through the chain.
Sharing information is a crucial success factor in value chains. When all the links in the chain understand what it is that consumers value and how they behave, they are then able to work together toward that common aim: delivering to consumers what it is they want. When the final purchase is made, all links in the chain benefit from having understood what consumers want, and having delivered it efficiently.
Consumers care about more than just price. We are increasingly concerned with the environmental impact of our purchases. 'How much carbon was emitted in the process of producing this can of food, and how does it compare with a similar brand sitting just next to it on the supermarket shelf?' We also care about the social impact of our purchases: 'Is any money being donated to a charity when I buy this brand?' 'Can I be confident that the products have been purchased in a fair trade environment?' Consumers are becoming aware that in order to purchase in a truly sustainable manner, we need to check off on all three points of the triple bottom line.
As the South Australian food and wine industries seek to build competitive advantage, appeal to consumers locally and globally, and operate in a truly sustainable manner (economic, environmental and social), value chain thinking offers solutions to achieve this.