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Wertschöpfungskette #2

English translation: value chain

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GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
German term or phrase:Wertschöpfungskette
English translation:value chain
Entered by: Dan McCrosky
Options:
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03:50 Jul 6, 2001
German to English translations [PRO]
Bus/Financial
German term or phrase: Wertschöpfungskette #2
Boy, I really learned something worthwhile today! I apparently got some KudoZ points for an obsolescent term. Sorry 'bout that! I can't give them back, but after seeing the comments from Beth and Tom, I did some research as punishment that may help all of us and one of you can now have 4 points for the most authoritative comments on this complicated but important translating subject. I have also sent the following to Justice. I hope it is not too late.

The first time I ran into the term "Wertschöpfung" many years ago, I looked in my battery of dictionaries and found "value added" or "value creation" or "added value" or "increase in value" or "to increase value" and so on and on. At that time, SAP also referred to "Wertschöpfungskette" as "value-added chain" and only as "value-added chain".

Zahn – Wörterbuch Bank- und Börsenwesen shows "Wertschöpfung" as "value added" or "output" and "Wertschöpfungskette" as "output chain".

Although

1. Hamblock/Wessels – Großwörterbuch Wirtschaftsenglisch,
2. Romain – Wörterbuch der Rechts- und Wirtschaftssprache,
3. Dietl/Lorenz – Wörterbuch für Recht, Wirtschaft und Politik, and
4. Reinhart von Eichborn – Der kleine Eichborn
5. Siemens – Fachwörterbuch industrielle Elektrotechnik, Energie- und Automatisierungstechnik

still do not mention "value chain", and always refer to "value added" and the like, more modern SAP resources now seem to favor "value chain", as here:

http://help.sap.com/saphelp_45b/helpdata/de/35/2a29d0d9685cd...

Wertschöpfungskette

Einführungsunterstützung (BC-BE-ICM)
Im R/3-Referenzmodell eine unternehmensbereichübergreifende verdichtete Darstellung von Geschäftsszenarien. Wertschöpfungsketten können für eine bestimmte Art von Geschäft oder Branche definiert werden und zeigen den generellen Verlauf eines Geschäftsprozesses über die Unternehmensbereiche hinweg. Sie zeigen auf hoch verdichteter Ebene, wie Geschäftsszenarien miteinander verknüpft sind. Branchenspezifische Wertschöpfungsketten erlauben es den Kunden des weiteren, ihre Geschäftsprozesse in verdichteter Form zu erkennen.
=
http://help.sap.com/saphelp_45b/helpdata/en/35/2a29d0d9685cd...

value chain
Einführungsunterstützung (BC-BE-ICM)
In the R/3 Reference Model, an aggregated representation of business scenarios across enterprise areas. Value chains can be defined for a particular type of business or industry, showing the overall course of a business process across enterprise areas. On a highly aggregated level, the value chains show how business scenarios are linked. Industry-specific value chains also help customers to identify their business processes on an aggregated level.
But SAP also still uses value-added chain as here:

http://help.sap.com/saphelp_40b/helpdata/de/7e/d42bb4455911d...

Die Linien zur Segmentierung von Geschäftsfeldern innerhalb eines Unternehmens können zwischen den Stufen von mehrstufigen Wertschöpfungsketten liegen, falls auf den verschiedenen Stufen extern verkaufsfähige Produkte erzeugt werden und die Möglichkeit der Substitution von intern produzierten Vorprodukten durch extern beschaffte Rohstoffe besteht.

=

http://help.sap.com/saphelp_40b/helpdata/en/7e/d42bb4455911d...

The lines for segmenting business units within an enterprise may be located between the individual stages in multi-stage value-added chains if products that can be sold externally are produced in the different stages and if preliminary products produced internally can be substituted by raw materials procured externally. In this case, a specific external procurement and sales market exists for each product group produced within the enterprise at a certain value-added stage.

A big difference in meaning is not readily apparent.

As Matthew Harris pointed out recently, the numbers just after the "saphelp_" concern "freshness", so this might well mean that the "40b" items above are much older than the "45b" items.

________________________________________

Better Management refers to supply chain and value chain but does not mention anything called a value added chain or added value chain.

http://www.bettermanagement.com/library/library.asp?libraryi...

"Supply Chain
Definition
A network of autonomous or semi-autonomous business entities collectively responsible for procurement, manufacturing, and distribution activities associated with one or more families of related products.
Logistical Slant

Focus: Quick, on-time, complete deliveries to each 'segment' of the chain
Looks for the best, fastest, efficient and most consistent way to move goods
Concerned with efficient product movement through the chain, not product sales or revenue
Warehouse inventory is a 'buffer' for inconsistencies. "Just in Time" (JIT) inventories are the goal

Value Chain
Definition
A high-level model of how businesses receive raw materials as input, add value to the raw materials through various processes, and sell finished products to customers.

Product Slant
Looks at the value each link/segment adds or detracts from products as they move through the chain
Gives a true picture of real profits by taking into effect product costs, volume, revenue as well as costs picked up along the chain
Recognizes supply chain efficiencies or inefficiencies and computes it as a cost of goods down to the sku level
Gives a view of what products are 'carrying their weight' as they flow down the chain"

________________________________________

KPMG is an outfit that ought to know what Wertschöpfungskette or supply chain, value chain, demand chain, value added chain or added value chain means. The definition and graphic concerning "Wertschöpfungskette" at the sites below look more like what "Better Management" above called supply chain.

http://www.kpmg.de/services/consulting/ebusiness/eSupplyChai...

http://www.google.de/search?q=cache:0Cwa4Rg5_po:www.kpmg.de/...

"So bewegen sich beispielsweise viele Hersteller elektronischer Geräte in der Wertschöpfungskette nach vorne, indem sie gleichzeitig Beratungsdienstleistungen für das eBusiness anbieten."

________________________________________

This university site uses the same logic:

http://www.iig.uni-freiburg.de/telematik/forschung/projekte/...

________________________________________

on the other hand, this site agrees with Better Management:

http://www.rz.fh-ulm.de/~buchberg/fhubetriebsorg/Outsourcing...

Wertschöpfungskette: Marketing/Vertrieb > Konstruktion > Arbeitsplanung > Fertigung > Montage > Versand > Service

________________________________________

The chamber of Industry and Commerce in Frankfurt also seems a little unclear what they mean by "Wertschöpfungskette" but their concept also sounds different from "Better Management":

http://www.frankfurt-main.ihk.de/kammer/abteilungen/oui/foru...

"E-Commerce kann die Wertschöpfungskette verkürzen oder verlängern: Die Wertschöpfungskette wird kürzer, wenn ein Partner aus der Kette verschwindet. Dies kann z.B. der Vertrieb sein, falls sich das betreffende Unternehmen zu einem Konzept des Direktvertriebs entschließt. Erste Schritte in diese Richtung hat beispielsweise die Lufthansa unternommen: Sie betreibt einen direkten Vertrieb an den Endkunden unter Verwendung der schon bestehenden Buchungssysteme. Die Verlängerung der Wertschöpfungskette tritt dann auf, wenn durch die neuen Technologien auch neue Dienstleistungen ermöglicht werden, wie sie in dieser Form vorher nicht angeboten werden konnten. Hier handelt es sich um einen Zusatznutzen entweder für den Endkunden oder innerhalb des gesamten Wertschöpfungsprozesses. Dieser Nutzen kann eine Serviceleistung zur verbesserten Marktübersicht, ein Outsourcen ganzer Prozesse oder ähnliches beinhalten."

________________________________________

This well-written site would like to establish a difference between "Versorgungskette" = "supply chain" and "Wertschöpfungskette" = "value chain" or "Wertkette". They also point out the difference between "Versorgungskette" and "Logistikkette". "added value chain" or "value added chain" are not mentioned at all:

http://www.gabler-online.de/lexikon-logistik/062.htm

_______________________________________

This Diplomarbeit content summary babbles about all sorts of chains without clearly defining any of them. Perhaps the complete paper contains definitions but I could not afford the DEM 400 to find out:

http://www.diplomica.com/db_spiegel/diplomarbeiten1710.html

_______________________________________

This site, among others, refers to "supply chain" as "Versorgungskette", which seems quite logical but they also mention "Wertschöpfungskette", "Lieferkette" and "Prozesskette". ???

http://www.google.de/search?q=cache:rP9aRXVJ9eY:www.uni-stut...

_______________________________________

The German "Bundesministerium für Wirtschaft und Technologie", which is relatively authoritative for at least the German usage side of the question, says that "Versorgungskette" = "supply chain management":

http://www.bmwi.de/Homepage/Service/Glossar/Glossars.jsp

"Supply Chain Management - Abstimmung aller logistischen Vorgänge und Funktionen innerhalb der Versorgungskette vom Lieferanten bis zum Verbraucher mit der Zielsetzung, Kundenservice zu optimieren und gleichzeitig Kosten zu minimieren. SCM-Systeme verzahnen die gesamte unternehmensinterne und -externe Wertschöpfungskette vom Rohmateriallieferanten bis hin zum Endkunden, indem alle relevanten Daten zwischen den Gliedern der Kette ausgetauscht werden."

and their definition of "Wertschöpfungskette" at this site agrees with Better Management, that is, "value chain":

http://www.bmwi.de/Homepage/Politikfelder/informationsgesell...

"Mumasy reicht von der Forschung über Technologieentwicklungen bis hin zu konkreten Modellanwendungen und erstreckt sich auf die gesamte Wertschöpfungskette von der Produktentwicklung über die Produktion bis hin zur Vermarktung."

___________________________________

This site from 1999 does show "value added chain" as a translation for "Wertschöpfungskette":

http://www.boerseninfos.de/ak/adhoc/news/540800-19990629-080...

____________________________________

This site from 2000 also shows show "value added chain" as a translation for "Wertschöpfungskette":

http://www.freenet-ag.de/html/presse_mit_archiv_070900.html

I hope using my translation of "Wertschöpfungskette" is not why there have been such bad headlines about Freenet recently.

_____________________________________

This university of Frankfurt site from 1999 also still used "Wertschöpfungskette" = "value-added chain" but refers back to a much older work by Malone:

http://caladan.wiwi.uni-frankfurt.de/IWI/Veranstaltung/SBWL-...

Dabei kommt es zu fundamentalen Veränderungen in der Organisation der Value-Added Chain (Wertschöpfungskette; vgl. Malone u.a. 1987, S.484).

The site also contains this comment about "supply chain":

"Die Schwierigkeit besteht darin, nicht nur den Funktionsbereich Materialwirtschaft, sondern im Rahmen der Supply Chain (Versorgungskette) den Gesamtfluß der unternehmerischen Aktivitäten zu optimieren."

___________________________________

Siemens mentions "value added chain" at this site:

http://siemens.de/page/1,3771,230623-0-999_1_0-0,00.html

Siemens Business Services implements this change by offering a complete solution and service offering right along the value added chain.

__________________________________________________


Google English searches indicate that Beth and Tom's feelings about "value chain" are not just caused by their US English orientation. The .com and .uk results were only different in magnitude, not in direction:

+.com +"value chain" –added : 69000
+.com +"value added chain" : 1000
+.com +"added value chain" : 95

+.uk +"value chain" –added : 2700
+.uk +"value added chain" : 123
+.uk +"added value chain" : 12

It seems that "value chain" is by far the most popular term anywhere. Whether everyone understands exactly what it means is something else.

It is interesting that a more descriptive, logical, and accurate term "value creation chain" does draw 300 hits around the world. Could we use that?

What comments do you have on this subject for my vocab files?

TIA

Dan
Dan McCrosky
Local time: 12:39
I knew that!! :-)
Explanation:
Wow, "some" research?

I must admit that I haven't done that much background work when I proposed "value chain". Now I will be 100% sure next time and you really deserve the Kudoz.

Great job!

Selected response from:

Andy Lemminger
Canada
Local time: 04:39
Grading comment
First of all, my points logically go to Andy because he got it right first for Justice yesterday. Justice for Andy for Justice.

More important than the silly points for Andy or me, this research may possibly have cleared up the reason for the change from "value added chain" to "value chain". In the last part of the Better Management definitions, under "Product slant", they mention the fact that not all movements along the chain necessarily really add value. They can sometimes add only cost without changing the value and sometimes they can reduce the value.

This entire subject of value chain, logistic chain, demand chain, and supply chain is very often used for discussions about the food industry. It is strawberry season here in Hamburg now, so lets talk about strawberries. If Mr Glantz (one of North Germany's strawberry kings) has 50,000,000 tons of strawberries here in the Hamburg area but with his best possible market share and best possible promotional activities (maximum number of strawberry-shaped stands on the street corners), he can only sell 40,000,000 tons. What does he do with the extra 10,000,000 tons? He can freeze them, ship them to Qaanaag, or try to give them away. Giving them away is dumb because this lowers their value not only for now, but also in the minds of the consumers for next year too. Freezing them is dumb and expensive. The cost is higher but the value of frozen strawberries is far below that of fresh strawberries in the eye of the strawberry consumer (of which I personally am a big-time key account). Shipping them to Qaanaag is not too bad but the Qaanaag market is not very big and some other strawberry kings around the world have probably also thought of that idea. Besides that, shipping them anywhere is expensive and the number of markets that cannot grow their own strawberries is not so gigantic as the number of markets that cannot grow their own bananas.

Anyway, they will probably also be able grow strawberries in Qaanaag soon if Mr. Bush continues to procrastinate with global warming measures until the White House Rose Garden is under Potomac water.

If this over-supply situation continues for a few years, Mr. Glantz would probably be better off to sell a few acres of his strawberry plantation to a home builder for a sub-division. This means that Mr. Glantz has run into a situation with his 10,000,000 tons of strawberries where any link/segment in the value chain that he pursues or tries to utilize cannot add to the value of his strawberries.

That might possibly be why positive sounding terms like "value added", "created value", "Wertschöpfung" (in a few more years), and "increased value" are out of place, sometimes incorrect and falling or have fallen out of use.

Thanks everyone

Dan

4 KudoZ points were awarded for this answer

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Summary of answers provided
na +1I knew that!! :-)
Andy Lemminger
navalue chain; -- now: value network
Tom Funke
naTold ya!Beth Kantus
navalue-added chain
Alexander Schleber


  

Answers


14 mins
value-added chain


Explanation:
Hello Dan,
I would stay with the tried and true "value-added chain", analogous to "value-added tax". I do not really like your suggestion "value creation chain", since "value" is almost invariably expressed as price and the price of any product contains many elements that are "virtual", such as for instance services, or simply the fact that a product was bought, sold, and invoice at higher price, where he differential between the buying price and the selling price is the "added value".

After reading your biblical collection of citations I was so confused, that I felt I should return to basics. I hope my argumentation helps you.
Regards

Alexander Schleber
Belgium
Local time: 12:39
Native speaker of: Native in GermanGerman, Native in EnglishEnglish
PRO pts in pair: 2340
Login to enter a peer comment (or grade)

17 mins
Told ya!


Explanation:
Don't really have time now to come up with and substantiate some authoritative comments on this. I do know that as recently as 2 years ago, they were still teaching "value added chain" in (university) business schools, but out in the real-world school (of hard knocks) all I ever see is value chain.
Besides, Andy the one who deserves the points, not me.
Thanks though for all the interesting research!


Beth Kantus
United States
Local time: 06:39
Native speaker of: English
PRO pts in pair: 924
Login to enter a peer comment (or grade)

2 hrs peer agreement (net): +1
I knew that!! :-)


Explanation:
Wow, "some" research?

I must admit that I haven't done that much background work when I proposed "value chain". Now I will be 100% sure next time and you really deserve the Kudoz.

Great job!



Andy Lemminger
Canada
Local time: 04:39
Native speaker of: German
PRO pts in pair: 1127
Grading comment
First of all, my points logically go to Andy because he got it right first for Justice yesterday. Justice for Andy for Justice.

More important than the silly points for Andy or me, this research may possibly have cleared up the reason for the change from "value added chain" to "value chain". In the last part of the Better Management definitions, under "Product slant", they mention the fact that not all movements along the chain necessarily really add value. They can sometimes add only cost without changing the value and sometimes they can reduce the value.

This entire subject of value chain, logistic chain, demand chain, and supply chain is very often used for discussions about the food industry. It is strawberry season here in Hamburg now, so lets talk about strawberries. If Mr Glantz (one of North Germany's strawberry kings) has 50,000,000 tons of strawberries here in the Hamburg area but with his best possible market share and best possible promotional activities (maximum number of strawberry-shaped stands on the street corners), he can only sell 40,000,000 tons. What does he do with the extra 10,000,000 tons? He can freeze them, ship them to Qaanaag, or try to give them away. Giving them away is dumb because this lowers their value not only for now, but also in the minds of the consumers for next year too. Freezing them is dumb and expensive. The cost is higher but the value of frozen strawberries is far below that of fresh strawberries in the eye of the strawberry consumer (of which I personally am a big-time key account). Shipping them to Qaanaag is not too bad but the Qaanaag market is not very big and some other strawberry kings around the world have probably also thought of that idea. Besides that, shipping them anywhere is expensive and the number of markets that cannot grow their own strawberries is not so gigantic as the number of markets that cannot grow their own bananas.

Anyway, they will probably also be able grow strawberries in Qaanaag soon if Mr. Bush continues to procrastinate with global warming measures until the White House Rose Garden is under Potomac water.

If this over-supply situation continues for a few years, Mr. Glantz would probably be better off to sell a few acres of his strawberry plantation to a home builder for a sub-division. This means that Mr. Glantz has run into a situation with his 10,000,000 tons of strawberries where any link/segment in the value chain that he pursues or tries to utilize cannot add to the value of his strawberries.

That might possibly be why positive sounding terms like "value added", "created value", "Wertschöpfung" (in a few more years), and "increased value" are out of place, sometimes incorrect and falling or have fallen out of use.

Thanks everyone

Dan

Peer comments on this answer (and responses from the answerer)
agree  Beth Kantus: stylin' answer, Andy!
2 hrs
Login to enter a peer comment (or grade)

2 hrs
value chain; -- now: value network


Explanation:
(In this case, forget the dictionaries.)

An older AltaVista (English) search:
AltaVista word count: value creation chain: 60 (probably largely “translated”); value chain: 26651
In my view at least, value chain is just as comprehensible as value-added chain.

BTW, now its: Wertschöpfungsnetzwerk value network (Siemens SBS)
Searched the web for "Value Network". Results 1 - 10 of about 5,960. Search took 1.38 seconds

German business writers (etc.) just happen to be enamored of the term Wertschöpfung. Value-added is even harder to love.

<<<Our latest bear story: A 300-lb bear roamed through Shadyside (just across the river, where our son Jerry lives) with plenty of neat amateur TV footage on local channels. >>>

All the best from Wild Wonderful West Virginia,

Tom




Tom Funke
Local time: 06:39
Native speaker of: English
PRO pts in pair: 2419
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