Value Chains are Built from Results and the Capital Solutions Used to Produce Each Result
20th century enterprise management cannot define and organize real value chains
Much is written about the theory of value chains and various structures have been contrived to lay value chains over the business. But, value chains cannot be defined and organized today, because 20th century enterprise management organizes and manages the enterprise, but does not define or organize the actual business. The actual business is defined as “investments in capital as solutions of worth utilized for cost and effectiveness of performance to produce value and quality in results”. A value chain consists of a chain of results of value produced in sequence to provide a final result of value to an enterprise customer. In order to build a value chain results, capital solutions that produce results, and the performance of each solution to produce each result must be defined and organized as a sets.
21st century business management organizes the business to provide natural value chains
Result-performance Management (R-pM) provides the knowledge, concepts, and procedures for 21st century business management. We cannot build natural value chains, until we organize and manage the business. Business management organizes results as the links in the chain, capital solutions to deploy and implement the capital solutions needed to produce each result, and performance in the utilization of one solution to produce one result. Each link in the chain consists of one result and the capital solutions utilized in performance to produce the result. Result relationships link results in sequence and manage the complete chain.
Results are economic outputs that contain the value created
A value chain organizes and relates results from supplier input results, through results transformed by the enterprise and business partners, to final customer results. Customer payment confers final result value. Enterprise payment confers input result value. Internal customers confer value on internal results added to and transformed in the chain. The total input and internal result value cannot exceed final result value.
Capital solutions utilized add to the cost of results
Results are produced by specific human and other solutions deployed to the result. Solutions incurred costs in development and acquisition that provides the beginning balance for the amortization of the solution in performance costs. Some solutions, such as human personnel and facility supply incur performance costs in the consumption of time and supplies. Each solution utilized adds performance costs to the total cost of the result. Several methods are provided to manage the costs of solutions against a specific result.
Result value-added is managed to optimize value chains
Result value created less total solution performance costs incurred in producing a volume of results gives the result value-added. The result value-added is managed for each result in the value chain. Results with a negative value-added are not produced unless costs are reduced or the customer increases the value, in which case the value of another result in the chain must reduce.

The value of each result in the chain adds to the total value of the chain and the value of the final result from the chain, which is a set-result that includes all the end-results produced from performance in the chain. The cost of each solution utilized to produce results in the chain adds to the total cost for each category of capital utilized and to the chain and the final result. The total value less the total costs is the total value-added for the chain and for the final result, for which the customer is willing to pay the value.
Result value chains enable business collaboration
Collaborators in a value chain use business management to define results consistently and to standardize capital solutions for comparable costs. Collaboration is a matter or re-linking the chain with suppliers, business partners, outsourced solution providers, and customers to eliminate duplicated results and produce the result at the point that achieves the highest shared result value-added.
Result-performance Management (R-pM) provides the knowledge for actual business management
Result-performance Management (R-pM) is the only source of knowledge and expertise on how to manage the actual business. Forward-looking enterprises are now using R-pM guidance to organize and manage their business to gain breakthrough advantages over competitors burdened by unsolvable 20th century management problems. Business management is explained and documented in the Business Management Toolkit. The Toolkit provides procedures for actual business management and maintains emerging 21st century management conventions, definitions, and standards. The Business Management Toolkit guide “How to Build Result Value-quality Chains” describes value chains in detail. Management consultants who base 21st century business management services on R-pM knowledge are licensed to help enterprises learn, organize, and manage the actual business. Business management knowledge and the Business Management Toolkit are available and supported today at result-performance-management.com.
The Solution to the Economic Crisis is explained in free downloads
Three free white papers explain the dead-end 20th century management problems, such as the failure to plan, account for, and manage the actual business, that caused the economic crisis, the way to eliminate the problems, and a government program to address the crisis by stimulating the economy, solving the problems, building a structure for financial and economic management, and organizing local businesses to flourish in the eventual recovery.
- How to Eliminate Problems that caused the Economic Crisis explains the major unsolvable 20th century management problems and the solution to eliminate the problems
- Business management; the only Solution to the Economic Crisis explains how to plan and manage the business to capture business data and provide management the information needed for actual business, corporation, industry, and economic management
- A Government Business Management Program to Answer the Economic Crisis outlines a government program to encourage business management, stimulate the economy, restore confidence, organize businesses to flourish in the recovery, and manage economic cycles to prevent future crisis
These three white paper downloads are available to R-pM Community Members at result-performance-management.com. There is no cost or obligation to join the R-pM Community. Join by entering your email address and personal password. Your email address is protected and used only for download problems, product updates, and occasional R-pM Member news and white papers.
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