What is the use of PCM when there are A/D converters?

An Analog-to-Digital Converter has the function of converting an analog value to its digital
counterpart. Suppose, for understanding, the ADC has an N bit digital output. So, the
number of distinct analog values it can digitize is 2N−1.2N−1.
An analog signal is continuous both in time and frequency. It comprises infinite number of
amplitude levels. So, if each of these levels of the signal is to be represented distinctly in
digital form, the number of bits at the output to represent each such levels uniquely would
be infinitely large, which is practically not feasible in terms of transmission rate, as well as
capacity of the converter.

Hence, it is essential that the analog signal with infinite range of values is sampled at
discrete instants of time (with sampling rate greater than the Nyquist rate), and the sampled
values are quantized to a fixed set of levels, so that each of those levels can be mapped to a
digital value by the ADC.

In this way, if we have a finite number of levels, say L, then the number of bits, N, at the ADC
output should be such that L≤2N.L≤2N.
Hence, the PCM system comprises of the essential operations of sampling and quantization,
before using an analog-to-digital converter to encode the quantized signal. ADC is
essentially a subset of the PCM transmission system.

The above is the block diagram of a PCM system. The encoder section encloses the ADC.

So, before feeding any input to the ADC, we must ensure that the input is quantized, with
finite number of amplitude levels, so that the ADC can convert each of those levels to the
appropriate digital form, and thereby perform encoding.

To sum it up all, the use of PCM is to modify an analog signal suitably (by the operations of
sampling and quantization) before it is fed to an ADC to be encoded and thereafter
transmitted in digital form.
How does the ADC convert a signal?

Many ways have been developed to convert an analog signal, each with
its strengths and weaknesses. The choice of the ADC for a given
application is usually defined by the requirements you have: if you need
speed, use a fast ADC; if you need precision, use an accurate ADC; if you
are constrained in space, use a compact ADC.

All ADCs work under the same principle: they need to convert a signal to
a certain number of bits N. The sequence of bits represents the number
and each bit has the double of the weight of the next, starting from the
Most Significant Bit (MSB) up to the Least Significant Bit (LSB). In a
nutshell, we want to find the sequence of bits bN−1, bN−2, ..., b0 that
represents the analog value Vin as
Vin=∑n=0N−1bn2nVref2N.

The MSB has weight Vref/2, the next Vref/4, etc., and the LSB has weight Vref/2N. Therefore, more
bits leads to more precision in the digital representation. Here we simplify the range to be between 0
and Vref, although the range may be between any two values.