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Value Chain

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A value chain describes how value is created and linked in processes through a chain of activities. The value chain is also referred to as a process chain or service chain.

Structure of a value chain To analyze a value chain, a company’s value-adding activities are divided into primary and supporting activities.

The primary activities are activities related to the creation and distribution of the company’s services.

These include:

Inbound logistics Production Marketing and sales Outbound logistics Service The supporting activities help the primary activities to remain functional and enable the company to perform. They are a prerequisite for the successful execution of the primary activities.

The supporting activities include:

Company infrastructure Human Resource Management Technology Development Procurement The goal of these activities is to identify a company’s competitive advantages. The analysis of the individual processes should help to create a marketable end product.

Value Chain Diagram (VCD) The value chain diagram is used to get started with business process modeling. In a value chain diagram, the core and support processes of an organization are modeled.

Possible structure-forming relationships between the individual value chains are as follows:

The functional organizational structure, i.e. the representation of different hierarchy levels in which the process-oriented super-/subordination is represented by the decomposition of subfunctions (e.g. “corporate process” is superordinate to the three processes “product development”, “production optimization” and “sales processing”). The process structure, i.e. the representation of the sequence in which the value-added processes take place (e.g. “product development” → “production optimization” → “sales processing”). For more information, see Integration of the stationary trade into the value chain of e-commerce.

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