Understanding the Value Chain & Impact of the Value Network
This article is an excerpt from the Total Financial Network (TFN) white paper by Christopher Vincent titled Value Chain Networking. Download the entire white paper in pdf format HERE. This is Part 2 – Return to the Introduction Understanding the Value Chain As touched on earlier understanding the make-up of a company’s Value Chain via Value Stream Mapping or a similar exercise is a critical activity. Not only understanding the internal structure but how the company fits into the Value Chain of the industry or sector also becomes necessary. This critical issue is truly identifying the company’s core value added activity in the eyes of their customer. This can be further broken down however and be used at the group, campaign or product level. This is not always possible though and at times a more loosely defined approach as seen in the Value Network Analysis is needed. From Wikipedia on fast-track complex process redesign… “Product and service offerings are constantly changing – and so are the processes to innovate, design, manufacture, and deliver them. Multiple, inter-dependent, and concurrent processes are too complex for traditional process mapping, but can be analyzed very quickly with the value network method.” A relevant real world example of this is how customer interacts on a company’s social media sites. A company may have a process for how they delivery content to their followers, however managing the response to this content and the tangential questions or comments that arise may be too loose and require a more free-flowing process to implement effectively. Impact of the Value Network The effect of belonging to multiple Value Networks changes actions and behaviors of individuals and business on a daily basis rather they know it or not. A lesser known fact is that Value Networks can breed negative results. As seen for individuals via social pressures, guilt and mob mentality. Business can get stuck into micro-economies or loose the organized structures to be cost effective and timely for their customers. By and large however when utilized and understood correctly Value Networks become a huge positive for all parties involved. This is evident in phenomena such as “group buying” and other voice of the customer communities. Online forums and social media have allowed Value Networks of consumers and activities to get together and communicate more effectively back to producers and suppliers in the same or congruent over-arching Value Network. For businesses it affords peace of mind and ease of business transactions. Also, by formalizing agreements it drives costs down between organizations and allows for a decrease in forecast error along the supply chain. For example a customer may have a group of suppliers that they routinely order supplies from. By formalizing these arrangements and guaranteeing volume it allows both parties to enjoy lowers costs and smoother day to day transactions. This is standard purchasing and logistics practice in supply chain management. The importance of the Value Network, is that when relationships and business networking is leveraged it allows for more parties to benefit from the collective whole. In the traditional approach both product and informational flows in one direction and process gaps or errors are more likely. Untimeliness of delivery and feedback is also an issue with this traditional setup. With the Value Network approach there is more connectivity and better information flow across the supply chain. Products can also get to the customer faster and in unfinished or aftermarket formats directly from entities higher up in the chain. An example of this type of approach is very evident in the world of personal computing with manufacturers like Intel and Microsoft and/or...
Read MoreValue Chain Networking Definitions
This article is an excerpt from the Total Financial Network (TFN) white paper by Christopher Vincent titled Value Chain Networking. Download the entire white paper in pdf format HERE. This is Part 1 – Return to the Introduction As summarized in Aristotle’s Metaphysics, “The whole is greater than the sum of its parts,” this is too the case with the concept of VCN. However before understanding fully how the concept works and can be utilized for business, it is important to define the key concepts and how they are both independent and can become interdependent on the process of VCN. Value Chain or Value Stream The term “Value Chain” also referred to as “Value Stream” and the business management concept thereafter were first popularized in Michael Porter’s 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance. From Wikipedia, at the Firm Level, a Value Chain is defined as follows… “A value chain is a chain of activities for a firm operating in a specific industry. The business unit is the appropriate level for construction of a value chain, not the divisional level or corporate level. Products pass through all activities of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of the independent activity’s value.” At the Industry Level… “An industry value chain is a physical representation of the various processes that are involved in producing goods (and services), starting with raw materials and ending with the delivered product (also known as the supply chain).” To better understand how a value chain works view the general company example below. The key separation to note is the split between primary activities and support activities. While necessary for business continuance, support activities do not add value to the product and therefore are not considered part of the value stream. Some Lean Manufacturing or Six Sigma experts will go as far as to refer to these processes as waste, even “necessary waste.” A typical analysis used to identify the value stream in a company and thus identify opportunities to improve processes, reduce cycle time and eliminate unnecessary waste is “Value Stream Mapping.” For the businesses that are not sure of what makes up their Value Chain, creating a simple process map on their core business practices should first be conducted to identify these elements. Understanding the value chain of the suppliers, vendors, business customers and even competitors is critical when analyzing and creating the make-up of the Value Network. Value Network The international bestselling book by Thomas Freidman called the “The World is Flat: A Brief History of the Twenty-First Century” analyzes globalization and alludes to the shift required for companies to remain competitive where historical and geographic divisions are becoming irrelevant. With the onset of the internet among other technological advancements, the business world is a level playing field in terms of commerce where all competitors have an equal opportunity. Technology and locality no longer become a sustainable competitive advantage. Value Network enthusiasts assert that Value Networks and the true nature of collaboration meets this challenge head on with a systemic, human-network approach to managing business operations and ecosystems. Value network modeling and analytics provide better support for collaborative, emergent work and complex activities. A value network is a business analysis perspective that describes social and technical resources within and between businesses. The nodes in a value network represent people (or roles). The nodes are connected by interactions that represent tangible and intangible deliverables. These deliverables take the form of knowledge or other intangibles and/or...
Read MoreIntroduction to Value Chain Networking
This article is an excerpt from the Total Financial Network (TFN) white paper by Christopher Vincent titled Value Chain Networking. Download the entire white paper in pdf format HERE. The ever changing pace of today’s consumer market coupled with the transparency of technology and media, present a variety of challenges for all businesses. Start-up and existing small businesses may lack the structure and resources available to enact change whereas mid-sized and larger organizations may lack the flexibility to implement change within their culture. What becomes evident is that an ever evolving methodology of conducting business both internal to the company and external is required for success. As the saying goes, much like a tomato, a company is either ripening or rotting. For many businesses, an emphasis on more loosely collected / pooled resources or an emphasis on partnerships / alliances tends to be the trend as opposed to traditional vertical aligned, ridged and hierarchical designed organizations. This “networked business” or affiliate approach allows smaller organizations to utilize the assets of the collective whole while still maintaining the agility of a niche company. This can be seen most predominately in, subcontracted and resold products / services as well as the outsourcing of business commodities. Within this new, emerging and loosely defined approach, how do businesses formalize and intentionally pursue putting this framework together? How can owners and managers measure their success and their utilization of the tangible and intangible resources that are the most valuable to their business? The activity of Value Chain Networking (VCN) aims to answer these questions among others and offer a business strategy for implementation. Continue to Part 1: Value Chain Networking...
Read MoreMobile Credit Card Processing
What is the Best Mobile Payment Solution? With the rapid development and wide spread use of smartphones over the last 5 years, mobile payment processing has found a new platform for expansion. Previously if you wanted to take payments on the go or if you were a full time mobile business such as a contractor, plumber, painter or trade show merchant; you were pretty much limited to an expensive and bulky wireless terminal along with additional wireless transaction fees. Enter the smartphones, mobile payment apps and card reader/printer peripherals. iPhone and Android phones coupled with a solid payment app have pretty much made the traditional wireless terminal extinct. Here are a few reasons why mobile phones are better. No need for an additional piece of equipment No need for separate merchant account No additional wireless processing fees Hardware does not go out of date Connectivity through existing phone ports or Bluetooth Interface is sleek and becoming more recognizable to customers Now that we understand the benefits of utilizing your mobile phone over a traditional wireless terminal, the next questions should be, “What is the best mobile credit card processing solution?” A better way to phrase it, is, “What is the best platform that will give me the most options for processing and hardware integration?” While Square and Intuit mobile processing solutions have become widely popular in the last few years, they are not the best fit for every business. This is especially true for companies that process more than $3,000 per month in debt/credit cards. For those looking for solutions that not only give the business owner merchant account options but also hardware compatibility check out our review of the three (3) best solutions at the link below. Check out our review of the Best Mobile Credit Card Processing...
Read MorePOS Evolution: Retail and Hospitality
The Evolution of POS Systems in Retail and Restaurant Industries POS is an acronym that stands for Point of Sale or Point of Service. Basically, it is a structured system that businesses use when there is an exchange of products and service for monetary value. When it comes to retail industries, POS means retail point of sale. Moreover, when it comes to restaurant industries and other hospitality related business, POS means point of service. POS systems are applicable in many business industries such as department stores, restaurants, hotels, stadiums and retail outlets. A POS system is employed at the cashier or checkout counter where the transactions occur. As technology advanced, the trend for POS systems in various businesses has also developed over time. Here are the POS systems used by retail and restaurant industries. POS Systems of Retail Industries A retail industry provides products and services to consumers. Typical examples of retail industries include supermarkets, malls and other retail stores. The retail point of sale for these retail industries is located at the cashier stand where the buyers place their items to a counter for totaling of the cost. Usually, the counters are long and there are moving belts to transport the products near the cashier. Then, the cashier scans the item and obtains the total amount that should be paid for the products bought. The buyer will then have to pay. The early POS systems of retail industries include electronic cash registers. As technology developed, there were already advanced computers that could be used to make the payment processing faster and more efficient. Scanners also contribute to faster transactions in retail stores. The cashier simply needs to pass the item through the scanner and the computer will automatically register the product and the pricing details. Software used for credit card processing gives the customer convenience in paying for the items they bought. Today, touchscreen monitors are also used by many retail stores. POS Systems of Hospitality Industries Unlike retail industries, most restaurants are dedicated towards providing more hands on service to the consumer. Examples of these restaurant industries can be cafes to upscale sit down restaurants. Prior to electronic point of sale, checkout was cumbersome and prone to errors while nightly close was a very long process. Waiters or cashiers would have to list the orders of the customers on paper. Then they would have to go to the kitchen to give the order to the kitchen staff. After that, they will go back to the customer to bring a hand written receipt with the total cost of the order. With the advent of technology, the pace and service of the restaurant industries has also progressed. With the use of computers, the orders of the customer are directly networked to the kitchen. There are also touchscreen POS systems that are used for faster transaction input. The latest advancement for POS of restaurants is the use of smartphones for payment transactions. There are already POS platforms that are available in smartphones which enable the restaurants to process payments through credit card readers. Advancement in technology and awareness has really contributed to the development of POS systems in both restaurant and retail environments. From manual systems, large computers, to touch screens and smartphones, POS systems are more efficient both to store owners and to the...
Read MorePoint of Sale Software
How Point of Sale Software Works So have you finally bought that sought after system known to the retail and restaurant industries as point of sale software? If so, congratulations! No more manual inventories, no more lack of financial statement reports, no more inefficient costing and pricing tasks. You also don’t need to hunch your back every night just to understand your cashier’s handwriting! But before you relax and plug that system, there are a couple of things you must know. You must first understand how your software works, what its parts are and how your point of sale software is different from other POS software. Here is a quick overview on point of sale software focusing on the retail and restaurant industries. So What is POS Software About? POS software is a computerized pit stop for goods transaction, no more cash register. This efficient software is used in retail, food, beauty, sports & leisure, and hospitality industries alike. Companies in these industries typically choose to utilize this system because it can be used for inventories, printing detailed transactions history e.g. invoices and receipts, and can also handle payments in cash or credit/debit cards. This system is also designed to suit the needs of the merchant’s business. Retail vs. Restaurant Point of Sale Software Point of sale software is an advanced type of software that caters to different industries but the retail and restaurant industries are its most profitable ones. The biggest difference between the retail and restaurant POS software is the fact that retail POS is highly encompassing but is complex and a specialized type of system. What it means it that the retail POS program, design, and system sometimes cannot be altered. On the other hand, the restaurant POS software is an adaptable and straightforward system. The difference in function is also immense. Restaurant POS software is a times limited to inputting customer orders to be sent to the kitchen or the bar, print out order checks and receipts, and can only print out simple financial status reports. Typically a retail POS requires more functions such as advanced inventory and stocking protocols. Retail POS is also capable of doing price and cost analysis, analyzing different retail trends and producing reports (financial and sales). Of course it can also do the basic retail cashier functions such as recording the sales, exchanges, and returns. Both restaurant and retail POS systems are capable of processing multiple payments at one time and inputting promotional sales info such as house accounts, loyalty programs, and gift card transactions. How Payment Cards work within POS Software POS software utilizes UPC card data and codes that are encrypted, thus ensuring safety, and for the computer to process the information the POS system, it actually uses specialized computer software. In most cases this software is already included in the POS System kit so you need not worry about it. In order to use the system, the user will just swipe the card or input the information needed about the client, continue with some security checks, depending on system, and that’s it transaction finished. All information about the transaction will be recorded and saved. Its important to ensure that a POS and/or payment professional helps you set up this portion of the POS system to ensure PCI...
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