About T1.4 Value Chain

Just look at fig. 1.16. Every step in the CHAIN of processes (there is always a chain - at least like the one on the picture, but usually more complex) adds value to the previous step (otherwise why would you do it). The goal is to plan for the whole business operation as a series of steps, smaller processes, where each does something useful helping to get a better result. This makes process management easier and allows to eliminate the ones that really do not add any value but were included automatically.

Cooking example:

Chain element 1: get the ingredients (yes it helps cooking :)

Chain element 2: (imagine it is frying chicken with rice): fry the ingredients (value is in the processing making it more edible)

Chain element 3: sing a song to enhance cooking (might be eliminated if doesn't add much to cooking)

Chain element 4: add salt and pepper (enhances the taste - a keeper)

Chain element 5: taste (helps to make changes to steps 1 and/or 4)

Chain element 5: serve using nice dinnerware (easier to eat than sharing one frying pan - probably a keeper :)

Notice that element 4 is a feedback that can lead to two other elements. It means that often it is not a linear chain but rather a network. Often, if some concept is unclear - google it and read additional explanations...