Skip to content
Archive of posts tagged process segmentation

The Value Creation Machine

The book “Die Wertschöpfungsmaschine” (a suitable English title would be “The Value Creation Machine”) deals with the question of how value creation can be optimally organized. The authors see process and organizational structures that do not fit the strategy as the biggest obstacle for companies to give their best.

Andreas Suter, Stefan Vorbach and Doris Wild-Weitlaner (2019): Die Wertschöpfungsmaschine (available in German only)

Without grey theories the book introduces into a new, but already often used approach, how one tailors processes and organization to the business strategy. The focus is on the roles and responsibilities in the company from the perspective of value creation. The arguments are conclusive, comprehensible and very practical on the basis of numerous case studies from industry and service sectors.

The key idea is the focus on the internal and external interfaces to customers and suppliers. Processes and organizational units should be controlled consistently by means of simple client-supplier relationships. The simpler and clearer the interfaces are, the more value can be increased for the customer, operational complexity reduced, idle times and expensive overhead structures for planning, coordination and monitoring eliminated. In addition, the matrix organization can be avoided.

Originally, the “value creation machine” was developed at Graz University of Technology in the 1990s and first published as a book in 2004. If one compares the first publication with the one now available, it is easy to see how it has been further developed and extended to include important subject areas such as “innovation management”, “process cost management” and “digitisation”. The service character of many businesses has also been massively expanded.

Developing an Enterprise Process Model Based on Cascading and Segmentation of Business Processes: A Case Study

This article introduces the study “Process Cascade- and Segmentation-Based Organizational Design: A Case Study” by Kohlbacher M. and Weitlaner D., which was presented at the IEEE International Conference on Industrial Engineering and Engineering Management in Singapore in December 2011.

The paper discusses the approach of process cascading and segmentation, a design principle which helps organizations to build its structure around its customer-oriented business processes. Cascading of processes is an approach where the organization’s business process design is based on internal customer-supplier relationships which ensure that every business process of the organization has a clearly defined (internal) customer which places an order and also receives the results. Segmentation of business processes refers to the idea of creating process variants of business processes which face heterogeneous market and/or customer requirements. Both principles – cascading and segmentation of business processes – complement each other. The paper shows how these design principles are applied in practice by using an Austrian manufacturing firm as a case study.

The poster of the presentation can be found here; the paper is available via IEEE Xplore.