Future of Work Enabler: Flexible Value Chains

Enabling the flexibility to choose and source value chain elements from anywhere - and change strategy as the market demands - is a key component of the future of work. By Cognizant

November 03, 2014

It sounds so simple: Successful companies are effective at providing goods and services that their customers need, when and where they want them.

The collection of activities that makes this possible — from the sourcing of raw materials to post delivery service — are what we have historically called the “value chain.”

However, for a variety of reasons, the “chain” as we know it is increasingly becoming unlinked, sub-segmented and re-looped, as chain segments are flexibly inserted or removed, previously distinct links are melded into joined units, and links that were previously at opposite ends of the chain meet for the first time.

The value chain, in other words, has become more of a continuously morphing value web.

Put less abstractly, value chain roles and activities that companies previously completed internally are now performed by external providers that provide a competitive advantage in speed, quality and cost. The reverse is also true; case in point are retailers that may soon become pseudo-manufacturers with the help of 3-D printing.

Meanwhile, processes that traditionally took place on-site — such as order management, medical management, clinical trial management and digital asset management — are moving to the cloud. With better access to real-time data and more fluid means of collaborating, upstream and downstream partners are working more closely than ever before.

At the same time, value chain participants such as distributors are taking on new roles, such as assembling custom goods according to consumer needs and desires. Whole new ecosystems are being established as erstwhile competitors, teaming as partners, apply systems of engagement to virtually supply data-intensive services such as logistics management to fend off upstarts and embellish the value chain.