Business values framework

Companies can apply the sustainable value framework to their existing portfolio of products and services to identify risks and opportunities. Managers assess the overall value created for a business or product in both shareholder and stakeholder terms. For... 

The book is intended for a primary audience comprised of professionals in the chemical industries, including those designated managers in business, research, and development, operations, health, safety and environment, security, and sustainable development. Yet, managers from other industries in the value chain of chemical companies will benefit from this text. Future decision-makers, such as students, are provided with a framework with which to lead in a world where social and environmental stewardship skills are just as important as technical, financial or marketing skills. 

In the Future 500 stakeholder engagement schema, the corporate or shareholder stakeholder terrain is at the center of the sphere. The heart of any corporation is its mission and values, its policies and procedures for doing business, and its value proposition - that is, what product or service is being creating. A company s cultural values and ways of doing business are created in this terrain. A company s culture emanates from this center and little can be done to transform activities in the outer layers if there is no alignment with what exists at the heart of the stakeholder framework. Primary stakeholders in this terrain include the executive management team, the board of directors, and all shareholders. 

Customers are the reason that organizations exist—they are the most valuable assets. They are consumers or other businesses that utilize the enterprise s products and services. Large customers and/ or groups of customers can exert significant influence over an organization. The business model is a framework for analyzing the contributions of individual activities in a business to the overall level of customer value that an enterprise produces, and irltimately to its financial performance. 

The supply chain structure is the network of members and the links between members of the supply chain. Business processes are the activities that produce a specific output of value to the customer. The management components are the managerial variables by which the business processes are integrated and managed across the supply chain. In combination, the SCM definition and this new framework move the SCM philosophy to its next evolutionary stage. 

In principle, BCA is simplicity itself add up the benefits of a project, add up its costs, and make approval dependent on whether the difference, total net benefits, is written in black ink or red. Of course, close up this simplicity disappears there are great technical hurdles to be overcome in such areas as valuing intangible or difficult-to-measure costs and benefits, deciding on the rate of discoimt to apply to outcomes that will occur in the future, and, if the analyst is conscientious, adjusting for the effect that income inequality has on the dollar value of outcomes to different social classes. This keeps economists busy. Despite these complications, however, they can appeal to the overall common sense of the benefit-cost framework to gain support in the political process. In the early applications to water policy the technical problems were not important -the most wasteful projects were easily identified - but as the use of BCA widened the problems increased, and different studies of the same proposal worild often come up with wildly divergent numbers. 

As the value discussion evolves, the need for a supply chain strategy becomes paramount. Business leaders want to know how they can align operational silos to improve the business strategy. This results in the development of a supply chain strategy. Figure 2.2 is a framework for this development. 

In the building of market-driven value networks, each of these manufacturing concepts has a place. However, they need to be rationalized based on the rhythms and cycles of the value network against the business strategy. One size does not fit all. Here we start with the definition and then share a framework on how to apply the concepts. 

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