Value Chain Map
Maps core processes and the value chain.
PURPOSE
The Value Chain Map is used to make the core processes and value chain of an organization visible and to identify optimization potential. It helps to understand how value is created for the customer and where in the chain waste, bottlenecks, or weaknesses exist. This way, process improvements can be targeted where they have the greatest impact on value creation.
HOW TO USE
First identify the primary activities of your value chain: from inbound logistics through production and outbound logistics to marketing, sales, and service. Add the supporting activities such as infrastructure, human resource management, technology development, and procurement. Evaluate each step in terms of its value contribution and costs. Identify activities that can be eliminated, automated, or improved.
WHAT IT IS
The Value Chain Map is based on Michael Porter's value chain model and visualizes the entire sequence of activities through which a product or service gains value. It distinguishes between primary activities (direct value creation) and support activities (indirect support). The map shows the value creation stream from supplier to end customer and makes the margin structure and improvement potential visible.
EXAMPLE
Example: As a management consultant, you analyze the value chain of a furniture manufacturer using the Value Chain Map – from wood procurement through design, production, and logistics to customer service. You identify that the greatest value loss occurs in logistics because furniture is transloaded three times before reaching the customer.