ABSTRACT
Value added I The concept of value added - the difference between the comprehensivelyaccounted inputs and outputs of a process - has become fundamental to businessenterprise and is its central purpose. An example: the harvested coffee bean has a
market value when sold; middle men bulk together farm products and sell them at a higher wholesale price - value is added by the service. The beans might be purchased and shipped by foreign distributors who sell at a higher price; other distributors will market in a local economy and a restaurant will purchase quantities of beans - value being added at each stage. Finally the beans are ground and made into an expensive cappuccino offered in a fine setting. The cost of that cup of coffee will be a high multiple of the value obtained by the farmer; measurable value will have been progressively added and realised at each stage. (Alternatively, a company might purchase the beans, process them into freeze-dried granules which consumers like for their convenience, package them into an appropriate format and market them to supermarket chains, who distribute them to consumer outlets - value is added at each stage.) Any business manager concerned with criteria such as organisational effectiveness, process engineering, productivity, customer satisfaction and so on, will inevitably, at some point, talk about adding value.
