Value Chains

How does the concept of a value chain fit the common folk understanding of a system as a collection of parts?
One of the most important features of systems is their connectivity. Inside the system it is much higher than outside. This is how we can determine systems boundaries, which some times is not easy. For example such system as “friends,” which can work as a self-supporting group with powerful economic and social reactions, has quite fuzzy boundaries. Facebook draws the boundary where you draw it by simply marking people as friends. But then there are almost friends, half-friends, acquaintances, and so on with gradually increasing distance from your real feel of friendship. It can also be a dynamic system with new friends appearing as you go from the links to other friends, from your working relations, and other sources. But the main feature of a friend is that you are connected to them better than to non-friends, you can rely on them, you can call them whenever you want if you need their advice, in other words, you feel a better connection with them.

Same with any system... Ants from one ant house are much better connected with each other than with other ants. Parts in a car or software components in an IS are much more connected with each other (depend on each other, influence each other) than on entities from their environment.

But there is more to that. A good viable system has a special feature of the way this parts interact. They are not in the way of each other by competing with each other or just pursuing their own interests, but they play together well (like a good team versus bad team). Also they ALL HAVE A COMMON GOAL, which is stronger than their own interests, or at least strong enough to make them see ways of enhancing each other’s results making it really a nuclear chain reaction. Again, like in a soccer team a good player can gain a lot by scoring by himself, but sometimes THE WHOLE TEAM has better chances if that player will pass the ball to another player who has a better chance to score. This separates good viable systems from the bad ones. This is called VALUE CHAIN.

The book gives some good but simple examples of how various subsystems of a car wash add value to other parts in a continuous chain. Often it is a whole network versus a linear chain (like a sports team or members or work teams with supplementing skills). Demonstrating the chain of parts/steps increasing value of the previous stages was one of the requirements of A1.4 task but is the MAIN one for A1.3,