A book named Supply Chain Redesign (Handfield and Nichols, 2002 Financial Times Management) gives a good definition of what a "value chain" is. They describe it like this:
A connected series of organizations, resources, and knowledge streams involved in the creation and delivery of value to end customers. Value systems integrate supply chain activities, from determination of customer needs through product/service development, production/operations and distribution, including (as appropriate) first-, second-, and third-tier suppliers. The objective of value systems is to position organizations in the supply chain to achieve the highest levels of customer satisfaction and value while effectively exploiting the competencies of all organizations in the supply chain [pg. 11-12].
Basically what it is saying is that we are reliant upon all parts of the chain to assure our success in serving our customers.
What it does is keep us from considering what is best for the company now, and focuses on how we can serve our customers in the most efficient way that will cause them to rave about our business.
The thing that determines success is the efficiency of our information sharing. The closed, secretive business that stands alone, pretty much no longer exists.
We are in a much more cooperative era now and must have open systems with our partners so that there can be smooth interaction for the end result of benefitting everyone involved.
It is absolutely essential to competing in our current business climate.
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