Chapter 1 Q3 Describe the relationship between business processes and value chains?

A Business process is "a collection of related, structured activities that produce a service or product that meet the needs of a client.’

A value chain is a chain of activities for a firm operating in a specific industry. The business unit is the appropriate level for construction of a value chain, not the divisional level or corporate level. Products pass through all activities of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of added values of all activities. It is important not to mix the concept of the value chain with the costs occurring throughout the activities. A diamond cutter can be used as an example of the difference. The cutting activity may have a low cost, but the activity adds much of the value to the end product, since a rough diamond is significantly less valuable than a cut diamond. Typically, the described value chain and the documentation of processes, assessment and auditing of adherence to the process routines are at the core of the quality certification of the business, e.g. ISO 9001.
Consequently, and in conclusion, a value chain is made up of different business processes to achieve its aim of added value.
Moreover, when the business is aware of its many business processes, it may then allocate its support activities accordingly.