Whither The Value Chain - Does It Have A Role In Our Future?

Over the last two decades we have seen a growing sophistication in discussing and using the concept of a value chain. In my own experience, this has consisted of the use of more well-developed approaches for understanding and redesigning linear processes especially the use of socio-tehcnical systems design (STS). We practitioners then experimented with non-linear design recognizing the increasing role of knowledge work. Others worked to perfect the value chain concept talking about what to do with the white spaces in between steps and extending the value chain on a global basis. Throughout all of this, the underlying assumption was that of the almost inviolate value chain even as we saw it as being less and less linear.

The challenge I believe we are facing now is what role does the value chain have in a network of providers. Can you have a value proposition without having a value chain? If so, then how is value produced? How do you account for the transformation of goods and services from raw materials to finished output? Does a value chain provide more room for maneuver than a supply chain?

I admit to continuing my efforts to fit the idea of a value chain into my current concepts of networks and their realities. For example, I wonder if there is a fit with the collective impact approaches that now have currency and which have application to networks. If you are aligning providers so that each plays a role in remedying an identified societal challenge, e.g. increasing literacy in K-12, then does not each provider play a sequential role in what I call the developmental value chain? Does not the pre-school program come before the after-school program which continues to develop the individual? The end product here is the literate adult.

The alternative approach is to allow for emergence, to recognize that challenges and solutions will emerge and can be pursued by networking around them. According to the collective impact folks, the themes and ideas emerge and become bucketed as sets of initaitves. We assume that actions with regard to each bucket will help us get to the end result of producing value. A governance role is played by a backbone organization though it appears that in doing so the value chain is not a prominent approach.

A recent post spoke about moving from "optimizing a supply chain to leveraging a service constellation." I find this to be a provocative thought. It also adds to our discussion the ideas of governing and intervening in the value creation process.

For the moment, I continue to appreciate the usefulness of the "value proposition" as an organizing principle for a network. It helps with our decisions about structure, strategy and governance. I prefer to let the rest emerge over time.