Definitions for TrueValueMetrics
Value Chain in the Supply Chain

Value Chain From Raw Material to Final Consumer to Eventual Disposal

Value Chain From Raw Material to Final Consumer to Eventual Disposal

The value chain from raw material to consumer to final disposal helps to show why some companies are very profitable and others are not. The value chains show how costs accumulate and what profits are extracted from the value chain.

1. The petroleum value chain helps to explain the various connects and disconnects between the origin of oil in a poor part of the world to gas being used in rich places. How is it that excellent crude oil in the Niger Delta makes some Nigerians super rich, with the country remaining terribly poor. How is it that there is seemingly little rational link between high gas prices at the pump and the costs of producing this gas? How do markets work ... and who do they work for?
2. The coffee value chain does the same for coffee. How is it that coffee consumed in a retail coffee shop is many times more to buy now than years ago ... but the price paid to farmers for their coffee has increased so very little. Where is the money going? Value chain shows that some of the organizations that were created to make the economic playing field fairer for the farmer have been gamed and have ended up being merely a way of extracting profit from the value chain without doing very much if anything in return.