Understanding the Value of Value Chains

How can cross-functional value chain teams promote efficiency and resilience in today’s rapidly evolving market conditions?

With the velocity and volatility of change in the market, businesses need to be nimbler than ever to successfully respond to financial and operational risks.

We know organizations want to be able to (and think they can) turn on a dime, but the reality is many are slow to respond to market conditions due to a lack of communication, planning and analysis.

As they say, time is money, and a delayed response can directly impact an organization’s profitability. For the best results, organizations must have  proper processes, policies and procedures in place to guide them through market challenges.

So, how can organizations be better prepared to address changing market conditions at the speed of change?

While there is no one-size fits all solution for companies, the creation of a value chain team is a sensible starting point.

What is a Value Chain Team?

A value chain team is traditionally constructed of members from sales, finance, product management, operations and supply chain who meet regularly to share quantitative and qualitative data from each of their respective departments.

A productive value chain team can help identify key risks and opportunities within each area of the organization and use their time together to develop strategic solutions to a gamut of market and customer challenges. Some of the key contributions a value chain team can make are:

• Developing decision support tools that provide early warnings and situational awareness of relevant challenges and obstacles facing the organization
• Evaluating potential scenarios and developing the appropriate response strategies if various events trigger a needed response

By committing to the development and maturation of value chain teams, organizations will have the foresight to successfully identify and respond to market challenges, build cross-functional capabilities and handle uncertainty in a nimble, agile manner.

If you have any questions about the advantages of value chain teams or models, please feel free to contact me directly at [email protected].

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