Thursday, April 03, 2014

Creating a value chain

The first part of mapping is to create a value chain. This is a chain of NEEDs. You start with the User need and determine the components needed to meet these needs and then any subcomponents that those components need ... and so on.

I often use the example of a cup of tea in tutorials / workshops. I've provided a simple and incomplete example of this in figure 1.

Figure 1 - a chain of needs.

It should be noted that :-

a) The value chain represents a chain of needs with the top being the user (i.e. the people we provide)

b) Things are valuable to others that NEED them.

c) The chain can have cascade effects e.g. if POWER is down then the USER won't get their cup of tea. However what the user cares about (and hopefully pays for) is the cup of tea.  The user doesn't care about your power supplier. As the supplier of the cup of tea then power is your problem. Your power supplier is in effect 'invisible' to the user and the only thing the user cares about is whether you deliver on their cup of tea. If the power fails then the user problem is you failed to give them a cup of tea - this is what is 'visible' to them. 

When mapping, it's important to start with USER needs and by that I mean what they need and not what you need i.e. starting of with a top level need of profitability or branding will lead you down the wrong path as I can guarantee you that most USERS don't have a top level need of making you profitable.