IDEF node tree

Part of the art in dehning activities for activity-based costing and other applications is to balance the potential for improvement with the materiality of the activity. For example, if this is a new supply chain, then partners might want to focus on the activities most likely to put the venture at risk. This can involve a technology innovation in supply chain processes or products, or assumptions about market penetration and the channels needed to maximize sales. 

For a supply chain that has been in operation for a while, the focus might be on cost. A natural response is to focus on the most expensive activities. An alternative is examining not only the most expensive, but also the most improvable activities. This can be accomplished with a top-down approach using a tool called IDEFq. The name is an acronym for ICAM Definition Language. The modeling language was developed as part of U.S. Department of Defense efforts to modernize its industrial base. 

Another feature is the existence of production, decision-making, and planning activities. The decision-making and planning functions may not be costly in terms of direct expense, but they heavily influence costs in other activities. An activity such as A21 Forecast Aspermuten Requirements can have a profound impact on the efficiency of the supply chain, affecting capital investment in plant and equipment, inventory, and productivity. 

Including these activities also shows the assignment of responsibility to parties in the chain. An important part of supply chain design will be deciding where activities like this are performed and what the mles will be. Activities requiring information exchange may also be good candidates for investments in new systems. 

---