Value Creation – lame duck or powerful process?January 29, 2016 | Markus Schwarzer

colorful-duckSome people claim that Value Creation is a Lame Duck and is an obsolete approach to our nowadays digital world. Well, I am not so sure.

I may be a dinosaur but I do believe that value creation tools are still as valid as they have always been.

What gives me confidence?
I am confident because I have used the Activity Chain Analysis Business Tool to do precisely that: identify and fine tune the value creation process.

So what – give us a specific example?
One of the best examples I know: IKEA – the Scandinavian furniture designer that sells products that are simple, practical and at low cost to the consumer. I would estimate that 90% of German households have a least one item from IKEA.

What makes IKEA unique?
IKEA develops consistently outstanding products with unique design that fit nicely into the IKEA logistics (flat cartons).  The innovative idea that the customer collects the package after purchase and assembles it at home. Although it can be a frustrating experience too!

How do they do it?
Constant review of their Activity Chain. The whole economic basis of IKEA’s is focussed on targeted cost. The relentless pursuit of optimising all processes in the company.

“Wasting resources is a mortal sin at Ikea” Ikea founder Ingvar Kamprad

Activity Chain Analysis in action
If IKEA encounter a problem in their Activity Chain Analysis, they attack it and turn into an opportunity.

“Solve big problems in small steps” Ingvar Kamprad

A strong focus on cost-optimised manufacturing. Yet they still sell attractive furniture for the mass market.  A fine balancing act indeed. IKEA also optimise processes with their suppliers and communicate closely with their customers.

Can I also use Activity Chain Analysis?
Yes, you can. The principles apply to small and big. Manufacturing or service industry. Online or ‘bricks and mortar’.  All organisations can benefit from this powerful analytical tool.

Want to know more about the Activity Chain Analysis Business Tool?

 

 

 

 

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