Our approach to value chain thinking and analysis.

Abstract

Abstract This paper introduces a new approach: Value Chain Thinking or VCT. VCT involves chain members collaborating to understand, create, deliver and share value as defined by shoppers and consumers. The aim of collaboration is that the value chain improves its effectivenes(maximising the opportunities for creating value) and its efficiency (creating and delivering that value at least cost and with minimum wastage). In this way, collaboration increases the size of the pie, and so chain members collectively can increase the size of each of their own slices without needing to reduce someone else's. VCT increases chain members' incomes by sharing the higher returns which come from: (1) Increasing revenue into the chain through understanding market opportunities, and cooperating to focus on creating and delivering what these opportunities require; (2) Reducing waste by tracing and tackling the root causes of waste across the chain; and (3) Everyone being a better supplier to their customers (more reliable and more consistent), and so avoiding the need to compete with other suppliers on price alone. The paper also provides case studies on which VCT can be applied and also tips on how to apply this new approach.