Extended value networks

Three Primary Types of Extended Value Networks... 

Make data sharing and forecast accuracy part of top-to-top meetings with trading partners. Take ownership of the forecast error in the extended value network. 

We tried to extend the network model to the binary blends and to determine the number n of elastic strands per S2 chain by adjusting the form factor calculated from the recoverable strain to the SANS data. Fig. 25 gives an example of the type of agreement which could be obtained between the model and the data. The corresponding values of n are listed in Table 6. 

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. 

Supply chain processes are characterized by industry. The processes are very specific. As value chains are built, industries are coupled together to build extended supply chains. When industries focus on value-based outcomes, it is termed value networks. 

Value networks do not just happen. Extending the supply chain outward from the enterprise through strategic relationships is an integral piece of the supply chain strategy. It takes time. It is a staged progression. Concentrated effort and a shared vision are essential. Network orchestration is critical. 

To extend the supply chain from an internal to an external focus requires skills, incentives, resources, planning, and leadership. There are many stops and starts. Relationships need to be treated differently based on importance, capabilities, and strategic alignment. Before companies can build successful value networks, they have to be clear on what determines value in the supply chain strategy. 

In this process, companies quickly learn that although they can outsource their supply chain, they cannot outsource the risk or responsibility associated with the extended supply chain from the customer s customer to the supplier s supplier. It needs to happen by building the value network 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 ... 

Together the partners view the model as an extended logistics value network and optimized conditions are the objective as each player sets aside the need for control and uses the most effective system from beginning to end of the supply chain, even when it means one player incurs an extra cost in the process. Balanced scorecards become the means of analysis and assignment and the technique for allocating costs across the extended enterprise. 

Linking customer-related processes throughout an extended enterprise network so valued and trusted partners can help in the pursuit of profitable revenues... 

Companies simply do not have all the resources required to respond in a real-time, effective manner to all of the pressures placed on their performance. Figure 13.1 is a pictorial description covering our general view of the future state of extended enterprise networks. These networks, and the nucleus firms in their center, need to learn how to dynamically balance often conflicting demands so a near state of optimization can occur. As the nucleus firms selectively partner with key business allies, they must discover how to create and deliver new value-adding propositions to the most important customers and consumers. 

Porter s value chain is one basis for the development of the supply chain. The term supply chain was created by consultant Keith Oliver in 1982 according to Heckmann et al. (2003). Compared to the company-internal focus of Porter s value chain, the supply chain extends the scope towards intra-company material and information flows from raw materials to the end-consumer reflected in the definition of Christopher (1992) a supply chain is a network of organizations that are involved through upstream and downstream linkages in different processes and activities that product value in the form of products and services in the hand of the ultimate consumer . Core ideas of the supply chain concept are ... 

---