Building a value chain of non-core processes

Summary

The transcript explores the application of value chains beyond core business activities, focusing on support and management processes. It illustrates HR support processes involved in hiring, including recruitment, induction, probation, and performance planning. Accounting processes like payroll, bookkeeping, reporting, analysis, and auditing are also highlighted, emphasizing flexibility in order. Management-focused value chains are exemplified through risk management, covering risk identification, analysis, evaluation, and treatment, as well as supplier management in wholesale operations, including supplier evaluation, contract signing, and sourcing procedure definition. Overall, the discussion showcases how value chains structure and streamline both support and management processes in organizations.

Takeaways

• 😀 Value chains can model not only core processes but also support processes.
• 😀 A typical HR value chain for hiring includes recruitment, induction, probation, and performance planning/review.
• 😀 The order of processes in a value chain is not always fixed, and certain steps may happen out of sequence.
• 😀 In accounting, a value chain might involve payroll, bookkeeping, reporting/analysis, and auditing.
• 😀 The order of steps in accounting (such as reporting/analysis before bookkeeping) can vary depending on context.
• 😀 Management processes, like risk management, often consist of risk identification, analysis, evaluation, and treatment.
• 😀 A wholesaler's value chain for managing suppliers includes supplier evaluation, contract signing, and sourcing procedure definition.
• 😀 Risk management value chains follow a structured order: identification, analysis, evaluation, and treatment.
• 😀 The flexibility in the order of processes within a value chain allows for adaptation to different business needs.
• 😀 Understanding value chains helps organizations better structure both core and non-core activities to optimize operations.

Q & A

What is a value chain in the context of business processes?

A value chain refers to a series of activities or processes that a business or organization carries out to deliver a product or service to its customers. It can include core, support, and management processes, which all add value in different ways.

Can a value chain model non-core processes? Give an example.

Yes, a value chain can model non-core processes. For instance, in HR, a value chain for hiring a new staff member involves four non-core support processes: recruitment, induction, probation, and performance planning and review.

What are the typical support processes in an HR value chain?

The typical support processes in an HR value chain for hiring a new staff member include recruitment, induction, probation, and performance planning and review.

Is the order of processes in a value chain always strict?

No, the order of processes in a value chain is not necessarily strict. For example, in the accounting value chain, reporting and analysis may be performed before bookkeeping, or bookkeeping could be done before payroll.

What are the key processes involved in an accounting value chain?

The key processes in an accounting value chain include payroll, bookkeeping, reporting and analysis, and auditing.

Can the processes in a value chain be reordered?

Yes, the processes in a value chain can be reordered based on the organization's needs. For example, reporting and analysis may be done before bookkeeping, or vice versa.

What are the typical management processes involved in risk management?

The typical management processes involved in risk management include risk identification, risk analysis, risk evaluation, and risk treatment.

What are the three management processes involved in managing suppliers for a wholesaler?

The three management processes involved in managing suppliers for a wholesaler include supplier evaluation, contract signing, and sourcing procedure definition.

Are value chains applicable only to core business processes?

No, value chains are not limited to core business processes. They can also model support and management processes, such as HR functions, accounting, and risk management.

Why might an organization choose to model its support processes using a value chain?

An organization might model its support processes using a value chain to better understand how these processes add value to the overall business operations and to improve efficiency and alignment between different functions.