A Method to Design a Value Chain from Scratch
Value chain concept and methods has assumed a dominant position in studying industry from management point of view. Decision supports methods using value chain require the acquisition of data from various existing corporate databases or data warehouses. I
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Abstract Value chain concept and methods has assumed a dominant position in studying industry from management point of view. Decision supports methods using value chain require the acquisition of data from various existing corporate databases or data warehouses. In design research discipline, the subject of value chain design is emerging. Only a few of published research took a wide scope comparable to theories used today in engineering design. As an effort in developing the methodology and as a result of research within a national industrial consortium, this paper proposes and discusses a general value chain design approach which opens up a promising perspective to provide a new direction for research and application of value chain from scratch for multi-stakeholder industrial systems. It introduces value chain design as a way to determine, model, and analyze and evaluate the industrial ecosystems, in order to generate future scenarios and provide evaluation criteria for decision makers. To illustrate its application, the establishment of end of life vehicle recycling subsidiary at national level is explored to identify potential values stakeholders. Keywords Value chain Matrix Simulation
Structural analysis System dynamics Scenario
1 Introduction Traditionally, organizations seek to streamline their processes and improve customer service by improving connectivity between both business processes and key operational units. The supply chain of the industry dominates the value generation chain R. Farel (&) B. Yannou Grande Voie des Vignes, Ecole Centrale Paris, Chatenay-Malabry 92290, France e-mail: [email protected]
A. Chakrabarti and R. V. Prakash (eds.), ICoRD’13, Lecture Notes in Mechanical Engineering, DOI: 10.1007/978-81-322-1050-4_49, Springer India 2013
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[1]. Porter has defined the value chain as a chain of activities for a firm operating in a specific industry [2]. Products pass through all activities of a chain from conception through the different phases of production, delivery and disposal, and at each activity the product gains some value [3]. Kaplinsky in [4] point out three key elements of value chain analysis: Barriers to entry, Governance, and Different types of value chains. Essentially, the primary returns (arising from design, production, marketing, etc.,) accrue to those parties who are able to protect themselves from competition. This ability to insulate activities can be encapsulated by the concept of rent, which arises from the possession of scarce attributes and involves barriers to entry. The economic rent arises in case of differential productivity, and takes various forms including technological capabilities, organizational capabilities, etc. Build on similar works [5] governance ensures that interactions between firms along a value chain exhibit some reflection of organization rather than being simply random. Value chains are governed when parameters requiring product, process, and logistic qualification are set which have consequence
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