Value nets: reinventing the rusty supply chain for competitive advantage

The traditional supply chain starts with components, which are assembled and pushed through distribution channels in the hope that someone will buy them. A value net, by contrast, starts with customer priorities and aligns the company operations and supplier relationships to satisfy real customer demand. Value flows to the customer, who receives a faster, more reliable, convenient, and tailored offering. Value flows to the suppliers, who have a more accurate reading of real demand, and value flows to the company managing the network, in the form of a differentiated competitive position, which generates greater profits and market capitalization.