Building Value Networks

While building the end-to-end value chain was their stated goal for the supply chain pioneers, it has not been their destination. Supply chain leaders have talked about building 

Let s start the discussion with definitions. When the supply chain is extended to a network of trading partners, it is termed a supply network. When the emphasis of this extended supply chain shifts from cost to value, it is called a value chain. When it becomes more strategic to the company, focused outside-in to drive value-based outcomes, it is termed a value network. 

Here we discuss the journey from extended supply chains to value networks. We start with the discussion of how to move from a cost to value and then share insights on how to use this focus to build the right relationships. We then share lessons from the pioneers. 

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Today, with 30 years of supply chain history behind us, companies no longer have to stumble forward. Instead, they can harvest the insights from the pioneers and build value networks to drive lasting value. 

How Do I Transcend Supply Chain Design Concepts to Build Value Networks ... 

In parallel, companies have become more dependent on third-party trading relationships. Outsourced manufacturing and logistics are today s reality. Companies today find that they need to plan globally to execute locally across a diverse network bidirectionally yet, the functional leaders are not incented to build value networks. To effectively plan, companies need to value the important, but the metrics reward the urgent. 

P G s birth is a testimonial to the success In building value networks. The company was formed In 1837 when William Procter (candle maker) and James Gamble (soap maker) began to collaborate to get a better price on hog fat (a common raw material for the two companies). The company now has more than 300 brands—24 of the brands are billion-dollar brands—and the company operates in 180 countries. 

As companies build value networks, they also need to build a risk... 

The supply chain leader sees CSR as an opportunity, while the supply chain laggard complains about the burden of corporate social responsibility initiatives for its supply chain. For all, it is an opportunity to build value networks brick by brick. 

Building value-network effectiveness. In the extended supply chain, what should be the role of the corporate and regional teams In our organization, what does global mean What is the right structure for governance ... 

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