Value Chain Value Chain Analysis is one of the fundamental elements of Chain Analysis, which is itself a critical element

of the contextual framework upon which all business models are pinned.

The most basic breakdown of primary functions includes input logistics, operations, output logistics, sales and marketing and service. You should use the other models and frameworks within this software to further differentiate between, and add to, these domains. Product Innovation is one area that is not normally included in the de jure model but is often included in the de facto model.

The most basic breakdown of secondary functions includes technology, organizational structure, human resources and procurement. Again, you should use the other models within this software to further differentiate between, and add to, these domains. Finance is one area that is not normally included in the de jure model but is often included in the de facto model.

Once you have derived a breakdown of domains, which should accurately reflect the processes that deliver your product or service to customers, then value-adding activities can be analyzed.

Multidimensional Value Chain The traditional Value Chain is linear - for example, it assumes that input logistics are directly related to operations - and that value between these linear nodes should be analyzed. However, in reality,

each domain links with multiple other domains - for example, sales and marketing often link with input logistics in order to determine costs, pricing and branding. These non-linear relationships should also be considered.

Further, there are links between domains to other companies - for example, output logistics may link to various other firms depending on the exact nature of an order (first class customers may require delivery through Fedex and economy customers may require delivery through the United States Postal Service etc). There is increased value to be found in each of these relationships.

Supply Chain, Other Chains (Chain Analysis) The Value Chain is one method of analysing the chain from source to delivery. The Supply Chain and many others are also useful, parallel Chain Analysis Tools.

Various differences between the models exist. For example, a focus on the Supply Chain may lead to optimization (which may cost money) whereas a focus on the Value Chain may lead to value-adding (which may save money).

These models are included in the software.

Value, Supply, Chain Grids The Value Grid, Supply Grid and Chain Grids call for multi-firm analysis and coordination. Common value-adding and margin maximizing activities could include minimizing the risk of the future cost of oil (purchasing, hedging; this is common amongst airlines) or countering political risk in new markets (many western energy firms considered a move into Russia to carry certain risks). Gaps found in these forms of analysis can justify mergers and acquisitions, partnerships, outsourcing and so forth.

Value Chain Evolution Value Chains vary over time. Markets evolve, mature and die. Product innovation modifies the chain. Snapshots of the Value Chain at different periods can highlight revealing value-adding opportunities.

Summary

All in all, advanced Value Chain, Supply Chain, Chain Analysis requires much more work than at first appears. This software provides you with the tools to achieves that.