Supply Chains, Transport Chains and Added ValueLocations are competing to attract, expand and retain
economic activities since the provide employment and generate
value for an economy. The generation of value in a supply/commodity/value chain is a process that mainly
takes three major forms:
Value creation or capture. Value creation concerns
the formation of
new activities within a supply chain, such as manufacturing,
distribution and transport. It is often linked with a paradigm
shift such as a new terminal, lower distribution costs, a new technology, new market
opportunities, etc. and increases the level of return. Value capture
attracts activities from another location, a process which can
be incited through various costs and infrastructure advantages
that may include improved intermodal facilities or logistics zones.
Value expansion. The growth of existing strengths, mainly
in relation with the growth of traffic along a supply chain.
Therefore, the more traffic, the more value generated for the
local economy.
Value retention. Involves keeping desirable added-value activities
which under existing circumstances would have ceased or relocated
elsewhere (value capture by another location). It is a difficult
process to mitigate since it is linked with changes in economic fundamentals
such as comparative advantages.
However, value capture and expansion can have a significant impact
on value retention since it creates local clusters of
interdependent activities.
The structure of transport chains underlines how locations
(gateways, regions, localities, etc.) are able to capture, expand and
retain value added activities. It is in this context that policies,
regulations and investments are articulated for the expected multiplying
effects related to value capture. Since many supply chains are globally
oriented, added value is performed at a wide array of locations, which
is the outcome of decisions made by multinational corporations to maximize
their revenue. It is worth underlining that in a supply chain, from
suppliers to customers and through all the intermediary stages,
it is a matter of
where each added value function takes place. For many sectors,
added value activities have moved downward the supply chain as a strategy
to lower production (input) costs. In other cases, added value
activities have moved upward to expand market potential, mainly
through better freight distribution strategies. In almost all cases,
improving the efficiency of freight distribution is a salient factor
of added value.Several regions, such as the North America, Japan and
Europe, have seen a "devaluation" of several of the supply
chains they are involved with. For the retailing sector, most
added value activities related to production have been
off-shored and the added value performed in North America mainly
concerns distribution; how to move finished goods to a wide
array of markets (gateway / hinterland relationship).