A value chain approach for critical infrastructure

Using value as a lever

There are currently many approaches and tools to enhance resilience at a different level of maturity, some of them directly related to critical infrastructure and others not yet connected. All tools and approaches have been developed to serve a specific purpose.

The Resilience Shift is identifying these approaches and tools and will assess them from the perspective of the value they deliver.

What do we mean by value?

Value is a relative concept. For example, it depends on who we are delivering value to, and for what purpose. The value we want to focus on can be described as: for critical infrastructure to deliver critical functions - i.e. to protect, provide and connect - under ordinary and extraordinary circumstances to the users/beneficiaries.

In order to assess the approaches and tools the Resilience Shift is developing an understanding of how this value is created, using a value chain approach.

Describing the value chain

A ‘value chain’ describes the full range of activities required to bring a product or service from conception, through the different phases of production (involving a combination of physical transformation and the input of various producer services), delivery to consumers and disposal after use (see Kaplinsky and Morris diagram below).

Value chain analysis has been used to understand how to create value (reduce costs, increase efficiency, provide access, etc) and to develop plans for change. Value chains are used for the simple reason that they help focus attention on the right questions and provide practical answers to them

Using a value chain approach

In applying and testing the value chain approach to the resilience of critical infrastructure, we envisage we will follow a 3-step process:

Step 1 Develop a suitable value chain framework that we want to work with. This will help with establishing what is the value we want to create and what are the steps involved to deliver that value.

Some initial work has gone into developing a resilience value chain framework and the various stages involved in delivering the critical functions. We started this from the traditional critical infrastructure value chain. The purpose of the value chain framework is to provide a holistic view of all activities that contribute to the creation of value i.e. delivering the critical functions (provide, protect and connect) in ordinary and extraordinary circumstances.

Step 2 Map all approaches and tools according to their role and contribution to this value chain, how they support one or more steps or connections between steps to deliver value. This analysis will include understanding who they are targeting as beneficiaries, what is their role in the value chain and how the tools and approaches will help them in their work.

Step 3 Identify gaps, creating opportunities for new tools and approaches and how different tools and approaches can complement each other. We expect also the value chain approach to help us identify how we can translate tools and approaches form one sector to another understanding the specific value chains.

Kaplinsky, Raphael & Morris, Mike. (2001). A Handbook for Value Chain Research