New economy – new business models – new approachesDavid Walters
2004 International Journal of Physical Distribution & Logistics Management
doi: 10.1108/09600030410533556
Towards the end of the twentieth century a number of changes occurred that suggest that organisational structures and management attitudes and behaviour in the foreseeable future will differ markedly from the traditional model. Not only had business become global in every respect, but in almost all markets end‐user expectations were undergoing significant change which were forcing business to come to terms with demands for increased choice and quality, flexible ordering and servicing systems, on‐line accessibility to suppliers and competitive prices. The response by business has been equally dramatic. Large organisations have reduced their activities down to core processes and capabilities, adopting the view that astute asset management and risk management are more about managing assets than about ownership. Consequently the largest international corporations can be seen divesting their non‐core businesses and adopting holonic structures. The holonic approach has been adopted by entire industries giving rise to renewed interest in the development of mutually supporting clusters of interdependent interorganisational business systems.
Demand and supply chains:the value catalystMark Rainbird
2004 International Journal of Physical Distribution & Logistics Management
doi: 10.1108/09600030410533565
The notion that firms have demand chains as well as supply chains is one that is gaining currency. It is suggested that taking a broad perspective of the demand chain as all those processes in the firm which interact with and translate customer requirements throws a new light on how a firm's value chain operates as a whole. Looking at some retail examples, including McDonald's in particular, it is argued that managing the interaction of a firm's supply chain and its demand chain is critical to the effectiveness of that entities business model. This interaction involves a fusion of processes in what is termed a Value Catalyst. This catalysis effect involves interaction costs and tension as processes continually bundle and unbundled. It is argued that while the deliberate creation and purposeful management of tension may seem odd, it in fact accords with day‐to‐day management reality and is a potential source of dynamism within the firm.
Creating and managing value in collaborative networksUmit S. Bititci; Veronica Martinez; Pavel Albores; Joniarto Parung
2004 International Journal of Physical Distribution & Logistics Management
doi: 10.1108/09600030410533574
This is a theoretical paper that examines the interplay between individual and collective capabilities and competencies and value transactions in collaborative environments. The theory behind value creation is examined and two types of value are identified, internal value (shareholder value) and external value (value proposition). The literature on collaborative enterprises/network is also examined with particular emphasis on supply chains, extended/virtual enterprises and clusters as representatives of different forms and maturities of collaboration. The interplay of value transactions and competencies and capabilities are examined and discussed in detail. Finally, a model is presented which consists of value transactions and a table that compares the characteristics of different types of collaborative enterprises/networks. It is proposed that this model presents a platform for further research to develop an in‐depth understanding into how value may be created and managed in collaborative enterprises/networks.
Vendor development and control:its linkage with demand chainA. Seetharaman; A. Ali Khatibi; Wu Swee Ting
2004 International Journal of Physical Distribution & Logistics Management
doi: 10.1108/09600030410533583
Explains the linkage of vendor development and control as an integral factor of value on demand chain logistics. Presents a comparison of the traditional purchasing function with vendor development in. Provides the missing link of value chain by demand chain. Describes the supplier integration approach as a competitive corporate strategy in a conceptual synthesis by linking demand chain with order management, marketing, sales, channel management, pricing, service, etc. Analyses the vendor development strategy from three key dimensions. Further discusses the advantages of vendor development in the short run, bottom line performance increase, and long run revenue enhancing the value of an organisation. Also discusses the impact on demand chain from the costing point of view with elaboration on cost and pricing activities involving total cost of ownership, understanding supplier costs and target costing with target pricing commensurate with expectations of customers. Concludes with an emphasis on the importance of providing e‐learning and upgrading the skills of staff in order to expedite the adoption of vendor integration strategy in its demand chain logistics management.
Total relationship and logistics managementMosad Zineldin
2004 International Journal of Physical Distribution & Logistics Management
doi: 10.1108/09600030410533592
Proposes that many of business and non‐business disciplines have much to offer logistics. Also reveals that there are many theories from other disciplines that are potentially relevant to the examination and study of logistics. States that becoming a more creative logistics manager is not just a matter of practicing new techniques and methodologies, but it is also about being aware of the fundamental differences between the past and current situations. Proposes that managers have to realize that the most important point is having the right type of atmosphere and environment in which employees are encouraged to create, coordinate, and improve the entire business, including facilitating a reliable network of relationships and market channels. States that total quality management (TQM) and total relationship management (TRM) may make a fruitful contribution to the logistics and supply chain management.
Managing the value delivery processTrevor Turner; Veronica Martinez; Umit Bititci
2004 International Journal of Physical Distribution & Logistics Management
doi: 10.1108/09600030410533600
This paper introduces a reference model for the life cycle of a logical business unit (LBU). It goes on to explain how the model was deduced from empirical data generated during participation by the authors in a series of change management interventions in various organisations situated in the West of Scotland. Case studies are used from these interventions to illustrate how the application of reliability‐engineering concepts was used to explore the performance of business processes in delivering stakeholder value. It is recommended that “generate” “decommission” and “remedial” business processes are added to a widely used business process framework. This new framework when used for lifecycle planning of LBUs in conjunction with the LBU life cycle model can assist businesses in reliable delivery of stakeholder value.
The advent of manufacturing technology and its implications for the development of the value chainRakesh K. Agrawal; Hilal Hurriyet
2004 International Journal of Physical Distribution & Logistics Management
doi: 10.1108/09600030410533619
This world has moved into the “Organic Era” requiring the development of “organic organisations” that would have characteristics similar to those in the “natural systems”. The factory of the future may be a virtual organisation or a physical entity with bricks and mortar, but it would be holistic and value‐driven with lean outfit, flexibility and agility as its essential characteristics. The process of value chain development would incorporate an organic approach for the transformation of the current organisations or the development of new organisations. The future organisations would have a focus on the development of self‐based characteristics for self‐actualisation, a necessary condition for their survival in the environment of declining resources, increasing customer expectations, extended organisation forms, and boundary less markets. Appropriate manufacturing technology would be used to support the organic process.
A framework for operations management: the value chainMark Rainbird
2004 International Journal of Physical Distribution & Logistics Management
doi: 10.1108/09600030410533628
Proposes that a broad perspective needs to be taken of operations management, so that it is no longer seen as the domain of mechanistic functionalism, but rather as the architect and engineer of the business model driving in turn the firm's creation of value. Suggests that a value chain approach provides an appropriate framework for such business model architecture. Draws a distinction between industry level value chains and value chain analysis at the level of the firm where the focus is on business processes. Suggests that mapping one against the other is critical to business model effectiveness and the creation of value. Finally, notes that a firm's value chain should not be seen as necessarily a series of smooth synchronous links, but as dynamic that creates its own interaction costs. This should not be seen as dysfunctional, but as a source of dynamism replicating the market environment the firm is operating in. While it does not sit well with the notions of scientific management so commonly associated with classical operations management, suggests that this process fusion is a fundamental aspect of the firm's operations that needs to be purposefully managed.
A business model for the new economyDavid Walters
2004 International Journal of Physical Distribution & Logistics Management
doi: 10.1108/09600030410533637
The new economy brought with it a new approach to designing business models. Not too many years ago the familiar organisation structure was dominated by a traditional view of managers that was based on asset ownership and vertical organisation structures. The prevalent view was that ownership enhanced control and profit margins. More recently flexibility, co‐operation and collaboration have become important features for success. The success of organisations such as Dell and the move by some of the largest corporations in the world towards a model within which assets are managed rather than owned has led to significant changes not only in structure, but also in attitudes and managerial behaviour. As a result the “new business model” has five common attributes, the firm should: be cash flow driven; focus on return on investment; function with distributed (leveraged) assets or low capital intensity; do so with a single minded view on core assets and distinctive capabilities; and develop competitive advantage by relevant positioning within its industry value chain. Reviews these developments, using the Australian wine industry as an example of the new business model.