Operations & Sourcing method guide

Activity Inventory

Activity Inventory decomposes work until sourcing and capability choices become meaningful.

Beginner-friendly guide · 4 min read

What Activity Inventory does

Activity Inventory decomposes work until sourcing and capability choices become meaningful.

An activity inventory lists the work required to deliver success in a product-market group. It creates the bridge between external requirements and practical sourcing or capability decisions.

Activities should be expressed at a comparable, decision-ready level. A list mixing whole functions, tiny tasks and desired outcomes will be difficult to assess or assign.

Strategic make-or-buy analysis needs activities at a level where internal and external options can be compared. A top-level function is often too broad, while individual tasks may be too narrow.[1][2]

Method schematicBuild an activity system from market requirements

Activities translate success factors into work, ownership and sourcing choices.

Original InnovationFlow illustration. Example values and software behaviour are explained in this guide; method sources are listed below.

Understand the method

The parts in plain language

1

Activity definition

Describe work with a clear verb, object and boundary. Note inputs, outputs and the part of the value chain involved.

Illustrative example

Validate diagnostic recommendations against equipment history before customer release.

2

Importance and performance

Connect the activity to key success factors and assess current quality, cost, speed, reliability and capacity.

Illustrative example

Interface configuration is highly important but slow and dependent on local experts.

3

Ownership and dependency

Record who performs the work, what it depends on and where knowledge or handoffs create risk.

Illustrative example

A supplier provides the connector, while internal teams retain customer configuration knowledge.

When to use it

  • Before make-or-buy or value-chain decisions.
  • When capability conversations mix departments, processes and tasks.

A practical workflow

  1. 1

    Start from success factors, capabilities or value-chain areas.

  2. 2

    Decompose activities into a clear hierarchy.

  3. 3

    Mark leaf activities that are decision-ready.

  4. 4

    Promote selected activities into sourcing or maturity analysis.

Fictional worked example

Example: activities behind verified savings

This example is illustrative rather than a reported case. An energy-service team identifies the work needed to deliver a credible outcome.

Acquire data

Observation:Connect and validate meter and machine data.

Implication:Integration capability and site access are prerequisites.

Diagnose

Observation:Identify controllable causes of excess consumption.

Implication:Domain models and expert review may be distinctive.

Verify

Observation:Compare results with an agreed baseline.

Implication:Evidence design affects contracts and customer trust.

From analysis to decision

How to interpret the result

  • 1Merge duplicate activities and separate outcomes from work.
  • 2Trace every important activity to a success factor.
  • 3Use the inventory as the subject set for maturity and sourcing analysis.

Practical interpretation guidance from InnovationFlow. Refer to the method sources below for the underlying approach.

What a useful output looks like

A structured hierarchy of organisational activities.
A defensible set of subjects for sourcing analysis.

Common pitfalls

  • Do not decompose further than the decision requires.
  • Keep the link to strategic success visible.

References and method basis

  1. [1]Probert, D. (1997). Developing a Make or Buy Strategy for Manufacturing Business. Institution of Electrical Engineers. Source ↗Original method source
  2. [2]Harvard Business School Institute for Strategy and Competitiveness (n.d.). The Value Chain. Harvard Business School. Source ↗Originating institution

This guide synthesises the named sources into practical questions for strategy and innovation work. It does not claim that using a tool by itself produces a successful decision.

Practitioner support

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