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How Do You Map the Value Chain?


We recently demonstrated why value chain mapping is important for business performance, but how do you define and document the internal delivery cycle of your product or service? Who’s involved?

The process is incredibly scalable, but every company is different so the approach will vary. As a result, it might be not immediately clear what steps you need to take. 

All aspects of your organization will affect the way you map your value chain – whether it’s your business model, product pricing or the sales and marketing strategy.

With that in mind, we’ve put together a simple framework that outlines strategic considerations to help map your company’s value chain.

1. Designate a Project Lead

Whether it’s an external consultant or an internal business analyst, you should have someone who can plan, organize and spearhead the process. It could even be someone within the C-Suite. However, it should not be someone who is responsible for the product or service, because you want a neutral facilitator for the process.

Think of the project lead not as a champion but as the enabler for value chain mapping. Your champions will be the department heads that get involved and drive the initiative.

2. Involve Your Managers and Subject Matter Experts

It’s impossible for any individual to define and document the entire value chain. Effective mapping requires a group of people who are intimately involved with the different steps, transition points and processes.

If you’re a corporation with hundreds or thousands of employees, this might seem incredibly difficult if not impossible. But you might only need to bring together several global business unit managers and subject matter experts.

When we run a value chain mapping workshop, we generally involve between five and 10 people. Our advice would be to assemble a small cross section of key departments at leadership and operations levels.

You want a team of people who know how things move through your company and its departments. They should be free to speak about a process or step without repercussion or disagreement, be able to participate from start to finish and be open to change.

3. Ask the Right Questions

There are critical questions you should address at the discovery phase of value chain mapping, including:

  • What do buyers value the most and how does that vary by persona?
  • What problems do we address for clients?
  • How do we deliver the items that buyers care about at each step?
  • What is the hidden value within each step? In other words, what would happen if we skipped this step?
  • What can we afford (if anything) to give away?
  • What could we add to our process to make it better, bigger, costlier and so on?
  • What could we subtract to make it faster, cheaper and more competitive?
  • What can we combine to accelerate or collapse our products and services?
  • What would help differentiate us?
  • What would we do differently if we had the money and time to rebuild from scratch?

Every business is different – from the operating model to the internal structure. But all businesses have a process or method for delivering their goods or services from start to finish.

Most companies have never defined it on paper or considered what the critical milestones are to define for customers.  

Start by figuring out what makes your organization tick and where it adds value. If you’re a manufacturer, are there processes in the shop floor that could be hurting productivity and therefore impacting your customers’ expectations?

Or, do you have processes that deliver added value to customers which your competitors haven’t adopted?

These are often taken for granted, unknown or forgotten by sales and marketing teams. In many cases, we find that they help to define price points or become USPs when revealed.

Setting your team up with questions that establish context will make it much easier to rectify obscure process issues and surface opportunities.

Diagram every step and action you take to deliver your service or product – cards or whiteboards will suffice. Then ask someone from outside the team to comprehend and verify it.

Are they any gaps? Is it clear? If it doesn’t make sense, refine it further. But make sure nothing is left out.

4. Frame the Information

Once you’ve gathered the information, articulate the steps as critical stages. This will help you group and label all of the various actions into larger buckets along the delivery life cycle.

In some cases, customers might come into a process or product in the middle of a stage. For example, a construction firm might not often engage at the early stages of project planning or engineering. Or, their customer relationships might not extend into areas like maintenance or facility expansion.

Manufacturers often implement R&D stages that rarely include clients. I’ve seen buyers who are willing to pay for destructive and nondestructive testing that manufacturers view as free quality testing.

Smaller businesses might have more, higher-touch measures to quality assurance processes. These measures could be used to defend higher price points or ensure more accurate and timely delivery. But left undocumented, they will be squandered

You build more trust when your process overlaps the customer life cycle, reduce margins for error and demonstrate a like-minded sense of value.

And by comparing and contrasting your methods to your customers, you should be able to identify delineated signatures or milestone activities that reflect where processes matter most and/or need to be improved.  

At this point in your value chain mapping initiative, you’ll hopefully see profound insights emerge – things you might not have discovered or addressed previously.

Maybe there’s a disconnect between quality assurance and production that’s linked to a decline in customer orders. Or, perhaps it turns out your company has an incredible on-site inspection process saving customers thousands of dollars.

Have you factored that into your brand differentiation? Have you considered the possibility of charging for hidden or assumed measures?

Frame the information and you’ll uncover aspects of the business that will help strengthen your position in the marketplace.

The Value Chain is Your Benchmark

When people can understand your exact procedures and see what makes your company different, the more confident they’ll be in your ability to deliver on your brand promise.

We’ve helped companies collapse or expand product lines, bundling them into a suite of offerings that their customers were willing to pay more for. Other clients have been able to monetize specific processes and incorporate them as differentiators in service guarantees.

All because they documented every stage of their value chains.

Incremental improvements can lead to a transformative outcome for your business. And I’ve never seen a value chain that did not pay for itself many times over.