Database Reference
In-Depth Information
Dynamic
Mass
customization
Invention
Mass
production
Continuous
improvement
Stable
Stable
Dynamic
Process change
Figure 1.3
Business models.
◾
The dimensions of change (product or process change)
◾
The fundamental nature of change (dynamic or stable)
On the vertical axis, product change reflects changes in the demand for goods or services because
of competitor moves, shifting customer preferences or entering new geographical or national mar-
kets. On the horizontal axis, process change means altering the procedures or technologies used to
generate, produce, or deliver the corresponding products or services. Taken together, these factors
result in four distinct business models, as follows:
1.
Mass Production
: In these enterprises, the primary use of technology is to automate tasks.
2.
Invention
: In these enterprises, technology must support collaborative efforts among teams
or a set of individuals.
3.
Continuous Improvement
: In these enterprises, technology must augment tasks by enhanc-
ing people's deep process knowledge and skills. It can also link people and processes across
functions to provide customer-focused, horizontal, informational flows enabling them to
continuously improve the processes they execute.
4.
Mass Customization
: In these enterprises, technology not only must automate tasks and aug-
ment knowledge and skills but most significantly must also automate relationships between
processes and people.
The advent of the Total Quality Management (TQM) movement in the United States led to the
emergence of customer satisfaction measures, and efforts aimed at improving and sustaining them
led to greater emphasis on customer centricity. The total quality management turned attention to
customer needs and forced a rethinking of traditional management methods.
One of the keys to mass customization is the use of dynamic business networks within and
among enterprises. These are formed out of a set of loosely coupled autonomous business process
capabilities with a linkage system that allows them to be reconfigured instantly for any particular
