In the previous step “Understand current business context” the current commercial scope has been determined, by examining the customers, products, markets and channels. In the same workshop setting the top level value added chains and business domain model are determined.

Level 1

Preparation

• Participants: management team (highest level for the project scope involved)
• Plan half a day for creating the level 1 value added chain.
• Bring slides to explain the business process mindset and methodology.

Input

• Product, market, channel, customer analysis

Execution

1. Ask all participants to create a value added chain for their own department for one product/service. Set a maximum to the number of business process to be used (7/8), to prevent too low level detail.
   (As an alternative, you can ask them to make the value added chain of another colleagues department.)
   Hang the output on the wall.
2. Introduce the business process mindset.
   This introduction allows the participants to realize that business processes have little to do with the organizational structure. Therefore when assembling the value added chains, the organization is to be ignored.
3. Take the most important product/service and start modelling the value chain for this product/service on a blank brown paper. Talk the participants through the end-to-end process and use ingredients from the earlier made organizational value chains (step 1). Focus on the core processes first.
   Once the core processes are done. Start adding the management and support processes by introducing those two layers into the value chain.
4. Now, we are going to make the top level value added chain. Hang a blank brown paper (with the five boxes pre-printed). Moderate/guide the participants to formulate the top level value added chain.
   By grouping processes of the previous value added chain, processes of the high level can be determined.For every business process in the top level value added chain, include the deliverable for the next business process. The purpose is to have the group see the service delivery concept. Ensure that top level value added chain is valid for all products/services in scope, and not limited by the one product of step 1.

Output

• Value added chain

Note:
In some cases it is not possible to make a valid level 1 value added chain for all products/services involved.
Example: Siemens produces trains and software. For trains research & development may be a supporting process, while for software engineering it is part of the core process.
When these cases occur, instead of a traditional value add chain make business domain model to represent the structure, often reflecting a holding structure.