How Do I Drive Value Through a Value Network?

November 2007
How Do I Drive Value Through
a Value Network?
by Lora Cecere
Supply chains are becoming value networks. How do companies design value networks to gain competitive advantage? What are the best practices? And, what determines value? In this Report, we share answers to these questions to help you drive greater value for your company.
Value Chain Strategies ReportAcronyms and Initialisms
APS Advanced planning and scheduling PLM Product lifecycle management
B2B Business to business ROI Return on investment
DDSN Demand-driven supply network S&OP Sales and operations planning
DDVN Demand-driven value network SCM Supply chain management
ERP Enterprise resource planning SCP Supply chain planning
OEM Original equipment manufacturer
© Copyright 2007 by AMR Research, Inc.
AMR Research® is a registered trademark of AMR Research, Inc.No portion of this report may be reproduced in whole or in part without the prior written permission of AMR Research. Any written materials are protected by United States copyright laws and international treaty provisions. AMR Research offers no specific guarantee regarding the accuracy or completeness of the information presented, but the professional staff of AMR Research makes every reasonable effort to present the most reliable information available to it and to meet or exceed any applicable industry standards. AMR Research is not a registered investment advisor, and it is not the intent of this document to recommend specific companies for investment, acquisition, or other financial considerations.This is printed on 100% post-consumer recycled fiber. It is manufactured entirely with wind-generated electricity and in accordance with a Forest Stewardship Council (FSC) pilot program that certifies products made with high percentages of post-consumer reclaimed materials.How Do I Drive Value Through
a Value Network?by Lora Cecere
The Companies face the challenge of changing their culture to fully gain from the Bottomnew evolution of SCM: demand-driven value networks. Line
Executive Few supply chain professionals would deny the need to design a supply chain to drive value. Yet, ask them what value is and how to Summary design for it, and the room will clear quickly. Why? Most supply chains are inherited, not designed, so those that work with them can make little head-way on their own.
Despite these challenges in supply chains, the fundamental question of what drives true value still stands. In the past, supply chain designs focused on physical flows to improve costs. Today, supply chain teams design to improve time to market for new products, harvest opportunities through tax efficiency, meet corporate sustainability goals, bal-ance risk with opportunity, and manage product complexity. All of these components need to be balanced without well-defined processes.
Complexity increases when companies realize there is not just one supply chain but many, each requiring design, modification, and continuous alignment to the business strategy. As companies strive to improve supply chain performance and align operating strategy to business strategy, the design of the supply chain response becomes the foun-dation of these initiatives.
This Report is designed to make you successful in this venture. We based our findings on work we've done with more than 40 companies to define organizational strategies, interviews with 17 companies that have successfully defined an operational strategy to drive value, and insight from 9 major systems integrators. We share insight on how to define value in a value network, methodologies for classifying value networks, and case studies on improving value. We end with a guide to the transformation process, includ-ing rules of the road to help your organization with its journey.
Value Chain Strategies Report | November 2007 © 2007 AMR Research, Inc. 1What is a value network?
To understand where we are in the evolution of supply chain management (SCM) prac-tices, it's helpful to take a step back and reflect on history. While manufacturing pro-cesses and organizations are nearing a century of development, customer-facing supply chain processes and organizations are much newer and much less well defined. For this reason, we find that in all but a few companies, SCM practices and organizations are... [download for more]