Value chains have played a major part in organisational growth over the past years. However in the digital world the empowered buyer has become central to the supply process because quality, price and frictionless delivery are increasingly vital as competition increases.This in turn drives the need for relationships between customers, suppliers and partners that are more multi-dimensional and as a consequence Value Chains are giving way to Value Networks.
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When we look at Value Chains they are mostly linear, however this is no longer true for the paths to purchase in the digital age. Furthermore important business information is held in silos, so responding to change is slow and difficult.
Fundamentally linear architectures make it difficult to respond simultaneously to multiple demands from across the Value Chain - being hardwired they become unresponsive, harder to maintain and can be prone to breaking which results in possible costly downtime.
Any organisation that sells goods and services is looking at ways to better interact with customers, partners and suppliers. The move to digital is transforming the way in which they now do this, thus enhancing the customer experience and helping further build better relationships. Since it is well know that the cost of retaining an existing customer is far less than that of trying to gain a new one, this is good news.
Future success will require a shift from the linear Value Chains towards collaborative Value Networks that are made up of dynamically connected “Plug & Play relationships. They require collaboration inside and between organisations, so that we can innately understand data that we exchange
Manufacturers | Distributors | Shippers | Financial Institutions | Retailers
Value Chains are:
Value Networks are: