Supply chains were invented in the late 20^th Century to achieve orderly transformation of inputs into finished products for customers. For decades supply chains were seen as linear and mechanical processes. In these ordered systems, organizations strive to maximize their revenue within narrow, closely managed spheres of control. Most often, there is little or no knowledge or interest in the other actors in the supply chain. These supply chains are engineered with robust frameworks and models like Supply Chain Operations Reference (SCOR) and Global Supply Chain Forum (GSCF).

 

In the 21^st Century there has been a rapid evolution of the supply chain into loosely coupled, self-organizing networks of businesses. These value networks interoperate to furnish and improve complex product and service offerings. Value networks evolved because increasing supply chain complexity was not being met with the rigid engineering practices of the 1990s.

 

Value networks achieve mastery of the entire supply ecosystem -- including roles, relationships, skills, knowledge, brand, revenue generation and reputation, for example. While SCOR and GSCF furnish adequate models for natural resources supply chains and consistent, low-differentiated ‘smokestack’ manufacturing, they fall down in a world of dynamic offerings and products with extremely high degrees of knowledge content.

 

Value networks are complex sets of social and technical resources that work together via relationships to create goods, services and economic value. Value network analysis (VNA) is a methodology for understanding, using, visualizing and optimizing internal and external value networks to improve complex supply networks.

 

VNA works in concert with traditional SCM to optimize roles and network intangibles to complete the entire system context and ecology. This in turn optimizes the entire supply network, including productivity, revenue and innovation. The business outcomes are far lower risk and much greater resilience, agility and stability in the supply chain. Overall supply chain equilibrium and operation is improved dramatically. Finally, value networks and VNA make innovation a natural property of the supply network, thus expanding sustainability and prosperity overall.

ValueNetworks.com™ Professional Edition is a comprehensive, third generation suite of network analytics for optimizing supply networks. Professional Edition provisions one button 'Load and Go' network analysis. In seconds it generates comprehensive and attractive social, organizational and value network maps, flow paths, indicators, metrics and narratives for network optimization as follows:

 

1. Complete, animated PowerPoint presentation;
2. Detailed Auto Layout Visio diagrams;
3. Summary "dashboard" report of network indicators;
4. Complete 25 page report with over 50 network and value indicators;
5. Comprehensive narrative in plain English of the network dynamics.

 

Here is how Carol Rozwell, vice president and distinguished analyst, Gartner (NYSE: IT) sees it:

 

"In contrast to the old concept of the supply chain, which Rozwell dislikes because of its implied linear rigidity, the value network shows a more complicated set of two-way relationships. "Life and business don't work as a series of sequential handoffs from A to B to C," she says. Rather, multiple participants interact simultaneously in complex ways. "Back in 2003, I was working with a bio-pharma. I put up the value network picture, and they gasped at the complexity --- nearly 20 different entities. They had never really examined their company's relationships with all the other players, so they found the value network map to be very enlightening."

 

The Boeing Company and Royal Dutch Shell are among the advocates and users of value networks and VNA for supply chain transformation. Giant pharmaceuticals are embracing VNA for converting supply chains to networks and creating novel innovation pipelines. The Boeing Company is currently using the comprehensive suite of VNA qualification offerings, online education, application training and other learning assets to train several hundred people in the next several weeks.

 

Glenda Turner, a supply chain executive at Boeing, summarized this way, “Now that I know the value networks methodology I would not consider doing a six sigma, Lean, SCM or any other kind of project without first doing a VNA to provide the ‘systems’ context for the initiative.” 

The applied use of value networks and VNA for supply networks is supported by expanding resources that include:

 

 

Open Value Networks:         http://www.value-networks.com/

Value Network Cluster:        http://www.vnclusters.com/

Community Clusters:           http://www.vncluster.com/

Value Network Group:         http://groups.google.com/group/Value-Networks

Value Network LinkedIn:     http://www.linkedin.com/groups?gid=3410

Products and Services:       http://valuenetworks.com/

Interactive Blog:                   http://valuenetworks.com/public/blog/207591