How to Gain Business Collaboration in True Value Chains
Submitted by bcfc on November 1st, 2006
Much is written about business collaboration through value chains. But the value chains are contrived one-off chains for the particular situation. Have you ever seen an example of a value chain model that any enterprise can use to collaborate with any other enterprise?
The conventional enterprise cannot build managed value chains
In order to construct a value chain you need to know where your value lies. You must manage the value at each link in the chain in order to manage the chain. A value chain is not worth much unless you can precisely define and compare all costs incurred to create the value at each link for alternative collaborators in the chain. You must manage the utilization of capital as specific performance solutions that produce a cost for all tangible and intangible capital utilized. The costs for each link in the chain must be charged against the value created to determine the value-added at each link in the chain.
Can you do this with the 20th century methods you use today? The 20th century enterprise cannot collaborate in true value chains because it can not manage the value created and costs incurred at each link in the chain. [more...]
