Which term describes the value provided to customers vs. supply chain expense?

The term that best describes the value provided to customers as compared to supply chain expense is supply chain surplus. Supply chain surplus reflects the difference between the total value created for customers and the total costs incurred in delivering that value. It encompasses a holistic view of how well the supply chain converts inputs into outputs that are valuable to customers while maintaining cost-effectiveness.

A supply chain that generates a large surplus effectively balances customer satisfaction with minimized costs, contributing positively to overall business performance. This concept helps organizations assess how well they are doing in creating customer value while managing expenses, signaling to management where improvements can be made to increase either value or reduce costs.

While terms like supply chain efficiency and supply chain effectiveness relate to resource utilization and performance outcomes, they do not directly address the comparison of value and expense in the same way. Cost-effectiveness refers to the relationship between the costs incurred and the outcomes achieved, but it does not explicitly frame the discussion in terms of customer value versus expenses. Hence, supply chain surplus is the most comprehensive term to describe this relationship.