Source: Andrews and Hahn 1999 Value Webs zForces Reshaping Value Chains yPeripheral changes in the roles of value chain members yCustomer/Consumer preference

Source: Andrews and Hahn 1999

Value Webs

Forces Reshaping Value Chains Peripheral changes in the roles of value

chain members Customer/Consumer preference for

personal customization These forces morph value chains to

value webs


Value Chains Vs. Value Webs

Value chains do not motivate their members to develop an integrated infrastructure.

Value webs promote a fully integrated infrastructure that links together all the members.


Value Web Management (VWM)

A model of infrastructure that is capable of supporting the value webs.

Produced by the marriage of business and technical infrastructure.

An extension of the old Supply Chain Management.


VWM

Allows value web members to exchange critical information/knowledge in real time and synchronize their efforts to respond and produce the desired results also in real time.


VWM and SCM

SCM promotes logistics as the key mechanism to link the individual members of the value chain.

VWM promotes one integrated business system.


Key Concepts

Information/Knowledge: Value Web collects, archives, retrieves, creates, shares, and otherwise leverages information that can be translated into knowledge and wisdom.

Real Time: The best enterprises must manage their business in real time because of the dynamic and fast paced environment in which they operate.


Guiding Principles of the Value Web

Disintermediation: the removal of any intermediary node in the value web; a synonym for value chain collapse.

Reintermediation: change in role of any intermediary to better serve the value web.

Infomediation: the addition of new information/knowledge-based intermediaries.



Role Transformation: changes in the roles of value web members, individually and as a whole.

Dematerialization: the conversion of materials and material-related assets to bits and bytes.



Digitization: capturing all pertinent information/knowledge for the value-web members to be used efficiently, effectively and interactively.

Resource Exploitation: leveraging certain pre-specified skills, capabilities, competencies, assets, structures, and infrastructures of others within the value web.

Source: Alter 1999

Business Processes

Architectural characteristics that affect business process performance

Evaluating business process performance

Role and value of information systems

Source: Alter 1999

Architectural Characteristics

Degree of structure degree of predetermined

correspondence between inputs and outputs of a process

structured, semi structured, and unstructured tasks

using information systems to impose different degrees of structure on business processes

Source: Alter 1999

Imposing Structure on Work

Highest Level: Substitution of technology for people Replace the person with technology

ATM

Automate much of the workComputer programs

Source: Alter 1999


High Level: Enforcement of rules or procedures Control each step in the work

Loan approval system of a bank using a fill-in-the-blanks form

Provide real-time guidance for work steps performed by peopleAn interactive shop-floor control system

Source: Alter 1999


Low Level: Access to information or tools Use a model to evaluate or optimize a

potential decision.Model to help the allocation of funds

Provide specialized tools that help people do their workA CAD system

Source: Alter 1999


Low Level: Access to information or tools Provide information that is filtered,

formatted, and summarized to make it useful.An MIS

Provide a general purpose tool to help people do work.A telephone, spreadsheet or word processor

Source: Alter 1999


Range of involvement - the organization span of people involved in a business processes too many participants or too few information systems can broaden or

constraint the range of involvement in a business process

Doers vs. checkers

Source: Alter 1999


Integration - mutual responsiveness and collaboration between distinct activities or processes extent of integration between two

processes or activities is related to the speed at which one responds to events in the other

five levels of integration

Source: Alter 1999

Levels of integration

Common culture shared understandings and beliefs

Common standards using consistent terminology and

procedures to make business processes easier to maintain and interface

Information sharing access to each other’s data by business

processes that operate independently.

Source: Alter 1999

Levels of integration

Coordination negotiation and exchange of messages

permitting separate but interdependent processes to respond to each other’s needs and limitations

Collaboration such strong interdependence that the

unique identity of separate processes begins to disappear

Source: Alter 1999


Complexity a combination of how many types of

elements a system contains and the number and nature of their interactions.

Degree of reliance on machines assign tasks to people and machines in

a way that emphasizes strengths and de-emphasizes the weakness of each.

Source: Alter 1999


Attention to planning execution, and control what to do, when to do it, and how to

make sure it is done properlyTreatment of exceptions, errors and

malfunctions especially important is computerized

business processes

Source: Alter 1999

Information Issues Related to Planning and Execution

Planning (Future) Having reliable methods of projecting into the

future by combining models, assumptions, and data about the past and present

Execution (Present) Providing new information to make adjustments Using current information to identify problems

or errors Collecting information

Source: Alter 1999

Information Issues Related to Control

Control (Past) Having reliable methods of using past

data to develop or adjust plans Providing real-time information to guide

current actions

Source: Alter 1999

Performance Variables and Related Roles of IS

Rate of output - average units per hour or week; peak load units per hour or week

increase rate of output by performing some of the work automatically

increase rate of output by systematizing the work

Source: Alter 1999


Productivity - output per labor hour or machine hour; ratio of output to input (in dollars); scrap rate; Cost of rework

help people produce more output with the same effort

automate data processing functions systematize work to reduce wasteschedule work to improve resource utilization

Source: Alter 1999


Consistency - defect rate; percentage variation; rework rate

systematize work to reduce variability of the product

Provide immediate feedback to identify and correct errors

Help process participants analyze the causes of defects

Source: Alter 1999


Cycle time - elapsed time from start to finish; total WIP inventory divided by weekly output

perform data processing work more quickly

make it possible to combine stepsmake it possible to perform steps in

parallel, thereby eliminating delayssystematize work to reduce waste

Source: Alter 1999


Flexibility - number of possible product variations; ease of customizing to customer specifications

systematize the form and content of product specifications to make it easier to handle variations

make it possible to control the process based on specifications that can be entered through a computer

Source: Alter 1999


Security - number of process breaches in a time interval; seriousness of process breaches in a time interval

systematize record-keeping about business process

systematize record-keeping about computer access and usage

track all nonstandard transactions such as changes to completed transactions

Documents

Source: Andrews and Hahn 1999 Value Webs zForces Reshaping Value Chains yPeripheral changes in the roles of value chain members yCustomer/Consumer preference