Managing the Business Model
Building the business model requires management to identify the relevant strategic opportunity, and by identifying the required capability responses and their availabilities and matching these to the opportunity. The “convergence” of Industrié 4.0 and Value Chain Network 2.0 and the “total” focus upon stakeholder value (not solely on shareholder satisfaction) offers new perspectives on what, how, when, and where this is undertaken. Managing the business model implements the strategic intention by selecting the relevant capability response characteristics required to achieve the objectives set by management. In this chapter we review the significant components of the “convergence” and how they impact on the capability responses. Capability characteristics play an important role in the operationalization of strategic capability responses. The availability of real-time data makes the concept of a “rolling value proposition” possible by identifying changes in operating requirements and applying them digitally. Real-time data analysis can be used to monitor margin management and “translate” the implications of change to short-term profitability throughout the network. Digital twinning provides data on operational efficiency; the data output can be used immediately to improve asset productivity and in the longer-term to make specification changes. Network partners are able to “connect” with the data to modify their inputs into product-service performance in both short- and long-term performance. The data outputs can also revise work practices and be added to training and upgrading of staff skills. The aggregation of performance data identifies the efficiency of the producibility infrastructure and identifies requirements for changes in partner contributions and, possibly, value chain positioning. Monitoring the use of resources, both production assets and consumables, is leading to changes in operational practices that can conserve these resources and lead to long-term design changes that build in remanufacturing requirements into product-service packages.
KeywordsManaging business model Value added and added value Value contribution analysis Activity-based management
- Bollard, A., Larrea, E., Singla, A., & Sood, R. (2017, March). A next-generation operating model for the digital world. New York: McKinsey.Google Scholar
- British Standards Institution. (1992). www.bsigroup.com
- Ellis, S. (2019, January 8). Top 10 predictions for worldwide supply chains in 2019. IndustryWeek.Google Scholar
- Harness AI to accelerate innovation: A 2019 perspective for manufacturers. (2019, January 14). UK Manufacturer.Google Scholar
- Leszinski, R., & Marn, M. (1997, February). Setting value, not price. The McKinsey Quarterly, 1, 98–115.Google Scholar