EXPLOITING THE VIRTUAL VALUE CHAIN CAD/CAM technologies. When Ford developed its"global car"(marketed in North America as the Contour sedan), it moved one key element of the physical value chain- product development -into the marketspace. Ford intended to create a car that would incorporate its best engineering, design and marketing talent worldwide, while also bringing to bear a vision of how a single car design could appeal to all major world What value-adding steps currently performed in the markets at once physical value chain might be shifted to the mirror world To gain leverage from its substantial invest ments in marketspace-enabling technology of the virtual value chain? stems, Ford brought together managerial talent from around the world in the marketspace. Rather than creating national product teams or convening elaborate design summits, Ford established a virtual work team to develop the car. In this way, it set to work the best talent and the broadest vision it could muster By moving product development from the place to the space, Fords managers did more than perform tasks in an information-defined world that were traditionally accomplished through physical actions. In the virtual world, the design team could transcend the limitations of time and space that characterize management in the physical world. They built and tested prototypes in a simulated computer environment and shared designs and data with colleagues around the world over a computer network 24 hours a day. In the virtual world of information, they established common global specifications for manufacturing, integrated component systems centrally, and even drew suppliers into the design process. Ford thus performed critical value-adding steps not on the Pvc but on the VvC-in other words, in a world that mirrored traditional In the virtual world. the team managerial realities could transcend the limitations of time and space that With such a complete information- characterize the physical world based representation of the product, everyone on the team could see the project holistically in the mirror world. The goal: a global car with global appeal. The virtual value chain made a much more integrated process possible. The marketing challenge of getting customers to buy the Contour remains Managers at the Boeing Company took their exploitation of the mirror world one step further. A few years ago, they redesigned the engine housing for a new model of the 737 airplane. Previously, airplane manufacturers designed airframes by developing physical prototypes, testing them in wind tunnels to gauge the flow of air over their contours, and then repeating the process through multiple iterations When Boeing was debating how to THE MeKINSEY QUARTERLY 1996 NUMBERCAD/CAM technologies. When Ford developed its “global car” (marketed in North America as the Contour sedan), it moved one key element of the physical value chain – product development – into the marketspace. Ford intended to create a car that would incorporate its best engineering, design, and marketing talent worldwide, while also bringing to bear a vision of how a single car design could appeal to all major world markets at once. To gain leverage from its substantial invest￾ments in marketspace-enabling technology systems, Ford brought together managerial talent from around the world in the marketspace. Rather than creating national product teams or convening elaborate design summits, Ford established a virtual work team to develop the car. In this way, it set to work the best talent and the broadest vision it could muster. By moving product development from the place to the space, Ford’s managers did more than perform tasks in an information-defined world that were traditionally accomplished through physical actions. In the virtual world, the design team could transcend the limitations of time and space that characterize management in the physical world. They built and tested prototypes in a simulated computer environment and shared designs and data with colleagues around the world over a computer network 24 hours a day. In the virtual world of information, they established common global specifications for manufacturing, integrated component systems centrally, and even drew suppliers into the design process. Ford thus performed critical value-adding steps not on the PVC but on the VVC – in other words, in a world that mirrored traditional managerial realities. With such a complete information￾based representation of the product, everyone on the team could see the project holistically in the mirror world. The goal: a global car with global appeal. The virtual value chain made a much more integrated process possible. The marketing challenge of getting customers to buy the Contour remains. Managers at the Boeing Company took their exploitation of the mirror world one step further. A few years ago, they redesigned the engine housing for a new model of the 737 airplane. Previously, airplane manufacturers designed airframes by developing physical prototypes, testing them in wind tunnels to gauge the flow of air over their contours, and then repeating the process through multiple iterations. When Boeing was debating how to EXPLOITING THE VIRTUAL VALUE CHAIN THE McKINSEY QUARTERLY 1996 NUMBER 1 27 What value-adding steps currently performed in the physical value chain might be shiƒted to the mirror world of the virtual value chain? In the virtual world, the team could transcend the limitations of time and space that characterize the physical world