“Extracting Profit through Agility” Value Networks “Extracting Profit through Agility”

Agenda Supply Chain  Value Chain Value Chain  Value Network Moving around the Value Network Extracting Profit from the Value Network

The Supply CHAIN Producer Supplier Logistical Support Supplies Products Supplier Logistical Support

The Value CHAIN Producer Supplier Logistical Support Value is added by distributing the product where needed or desired Supplies Producer Products Supplier Logistical Support Value is added by bringing together supplies Value is added by creating a product via processes

The Value NETWORK Buyer-1 Supplier-1 Producer Buyer-2 Supplier-4

Putting the “Value” in the Value Network Buyer-3 Buyer-2 Buyer-4 Buyer-1 Supplier-1 Producer Supplier-4 Supplier-2 Supplier-3 Buyer/ Supplier At any point in this network, value can be added At any point in this network, value can be added At any point in this network, value can be added

Moving Around the Value Network At each , value is added and profit can be extracted in return for this value. “Moving around the value network” can be very profitable for the agile firm

Extracting Profit Around the Value Network Profit comes from finding buyer for reseller Profit comes from facilitating supplier alliance Profit comes from locating supplier for producer Profit comes from turning buyer into low risk producer

General Principle Value network integration means firms can play more roles more quickly Finding out where value is added and how to manage that value-adding process is important The more information content to the physical product, the more likely it is that agility holds the key to increased profit