Supply Chain: Its Now about Risk

Now even more so, its about risk. Measuring, predicting and addressing.

Supply Chain Risk Management - Reach the Next Level of Supply Chain Maturity

 Marcus Evans in SupplyChainBrain

Following a number of successful Supply Chain Conferences, marcus evans is now organizing the Supply Chain Risk Management: Resilience & Diversity Conference on the 18th to 20th of January 2021 Online through their Live+ digital platform. 

The unprecedented pandemic and economic freeze COVID-19 has brought about brings even more into focus the current lack of resilience of global supply chains. The global pandemic has revealed all of the risks and weaknesses plaguing the way current supply chains work, but it also represents a big opportunity for this big transformation to be pushed through much quicker than it would have been otherwise. Companies now have an unprecedented opportunity to adjust their entire supply chain to a new model, one that is more flexible, that brings in new products and an overall culture change.  ... " 

Bain on Adapting for Back to Work

Mor ecomments on the process and implications of getting back to work.

Back to Work
Recovery from Covid-19 will require resilience as companies advance, retreat, adapt—and repeat as necessary.

By Hernan Saenz, Dunigan O'Keeffe, Karen Harris, Tim van Biesen, John Hazan, Dianne Ledingham and Nate Anderson   in Bain

Recoveries have always mattered in business. Some of the biggest shifts in market share occur coming out of downturns, when new industry leaders—and new industries—often emerge. Rarely, though, has recovery meant putting people’s lives at risk.   

Yet that’s where we are today.

The post-Covid-19 world will accelerate some existing trends and create new ones, and all business models will have to evolve in order to grow and thrive. But there’s no way to accurately predict the coming year, and it’s a dangerous mistake to rely too heavily on forecasts, which have to be complemented with highly adaptive and resilient business models. ... " 

McDonald's Bet Big On a Smart Idea. Now It's Saving Lives

Not only in selling burgers, but also as a medical services model.  The very first time I saw a crowded drive-through it  made me think of by Queueing analysis training.  And thinking: 'There is a model we can readily do useful analytics on!'   And tune it to do things much better.

McDonald's Bet Big On This Smart Idea. Now It's Saving Lives

McDonald's didn't invent the drive-through, but it helped make it ubiquitous and tripled down on it as a business model   By Bill Murphy Jr.  in Inc.

Who would have imagined that the McDonald's drive-through would become such a beloved symbol of our times?

But it's true, for at least two reasons -- both of which have to do with Covid-19, and ultimately saving lives.

First, the only way that restaurants like McDonald's, Burger King, Wendy's, and other fast-food franchises can stay open many places now, is to shift to an all-drive-through and all-delivery model. It's not ideal, but it keeps part of our retail food system working while maximizing social distancing, and keeps employees on payrolls.

Second, the drive-through model that fast-food franchises like McDonald's pioneered is now a critical part of our medical system. The rise of drive-through Covid-19 testing locations enable medical tests, while limiting exposure of people with symptoms to other patients and medical personnel. ... "

Pricing Smart Products

Towards business models of smart products.

5 Questions to Consider When Pricing Smart Products
Nicolaj Siggelkow, Christian Terwiesch  in HBR

Imagine you are the CEO of an oral care company and you have been selling a product called the Power Brush 2000, a good electric toothbrush. Your revenue model was likely focused on profiting from selling the toothbrush with some creative pricing coming from the replacement heads (a typical “razor-razorblade” model perhaps with a subscription plan à la Dollar Shave Club). Now, your R&D group has a new product ready for launch, a toothbrush for the 21st century. The toothbrush is smart (it has built-in sensors and AI to detect plaques and cavities) and is connected via Bluetooth to the Internet. So, let’s call it the Smart Connect XL3000. Your job now is to price the Smart Connect XL3000, or, more broadly speaking, to articulate a revenue model.

The revenue model is one of the most important elements of a firm’s strategy. It defines the ways in which a firm gets compensated for the value that its products or services generate. In the old days, revenue models primarily consisted of picking a “good” price. Connected, smart devices are changing this paradigm.

Companies that pursue what we call a connected strategy (ie., those that transform their connection to customers from episodic interactions to a more frequent and data-driven relationship) have a bigger set of revenue models to choose from. In other words, the price can now depend on factors that previously could not be used to influence the pricing decision. To think systematically about revenue models and to spot opportunities for improvement, we find it helpful to ask the following five questions .... ' 

Business Models for IOT

A general kind of thought.   But there are specific ideas by type of technology which are useful to think about.

The Internet of Things Needs a Business Model. Here It Is
by Michael Blanding   in HBS Working Knowledge

Companies have struggled to find the right opportunities for selling the Internet of Things. Rajiv Lal says that’s all about to change.

The Internet of Things (IoT) has been near the top of the technology-hype lists for years. In 2018, Gartner’s Hype Cycle for Emerging Technologies ranked IoT platforms as cresting the “peak of inflated expectations” stage and ready to tumble into the dreaded “trough of disillusionment,” like a barrel careening over Niagara Falls.

It’s not that IoT has flopped; far from it. Everything in our homes seems to be connected. IoT devices enable networks that make possible smart speakers, smart TVs, smart thermostats, and even smart refrigerators that can help automate our lives. The consumer market, however, is only the beginning of what is possible through the IoT.

“What you see in the consumer domain is interesting, but it’s not where the economic action is,” says Rajiv Lal, the Stanley Roth Sr. Professor of Retailing at Harvard Business School. “Most of the IoT applications that matter are in the business-to-business space.”

Indeed, the kinds of innovation possible in the B2B world seem limitless. By placing sensors on machinery and connecting them to the internet, companies can capture real-time data on their assets and processes, exploit efficiencies, proactively identify problems, and develop new workflows.
So why, then, do most IoT ventures fail? Despite the industry's potential value of $11 trillion, according to McKinsey, more than 75 percent of businesses don’t make it off the ground, Lal says. That’s because most companies don’t know how to harness the potential of IoT effectively.

“We can put sensors on something and get great data out of it, but then the question becomes what are we going to do with that data—and how are we going to make money off of it?”  .... "

Disruptive Flywheels as Business Model

The idea of disruptive flywheels, new term to me, but worth a look.  Reading further.

How to build disruptive strategic flywheels
Gaming, artificial intelligence, and deep learning are paving the way for dynamic and resilient 21st-century business models.  by Sundar Subramanian and Anand Rao  In Strategy-Business

A large auto manufacturer asked a consulting firm to evaluate its competitive position in relation to ride-sharing startups building autonomous vehicles. Instead of viewing this as a classic strategy project, with a business case, PowerPoint decks, and five-year projections, the firm created a “game” that the automaker could “play” against its competitors. An artificial intelligence (AI) system modeled the voluminous individual choices available to customers, companies, and other entities as digital twins (a digital twin is a computerized replica of a physical asset, process, consumer, actor, or other decision-making entity). The hundreds of thousands of simulations suggested many strategic bets, option-value bets, and “no-regret strategies,” or moves that made strategic and financial sense in a multitude of situations. The selection of those strategies, in turn, made the AI system smarter through learning mechanisms called reinforcement learning, which then further empowered humans to make better decisions. As time progressed, the company was able to choose precise market approaches, pricing, advertising, and customer strategies for multiple cities and communities.

Taken together, these actions created a flywheel, a concept borrowed from the power industry to describe a source of stabilization, energy storage, and momentum, and that was popularized in the strategy context by the author Jim Collins. Executives, instead of trusting instincts and prior assumptions, were able to harness the power of this strategic flywheel to verify hypotheses in simulation and in the real world. Doing so exponentially expanded the array of strategic choices and reduced the cost of experimentation. Rather than paralyzing decision makers with the abundance of options they created, the simulations produced clarifying insights. The result for this auto manufacturer has been a multibillion-dollar valuation of its new services, achieved in less than two years.

Games. AI. Continuous execution and adjustment. Thousands of scenarios to consider. This is not how strategy at blue-chip companies has been done in the past. But it is how business leaders are starting to do strategy now, and how we will need to do strategy in the future — that is, if we are to develop strategies that can both withstand and adapt to the increasing pace of change and disruption that is evident in all industries. .... "

Getting Started with Business Models

Nicely done piece with lots of links.    Via O'Reilly.   Gives you many ways to think about business models.  For data scientists, yes, but for most anyone thinking about how to get started in making money by reaching out to customers.

10 Reads for Data Scientists Getting Started with Business Models  by Conor Dewey

If you’re getting started with data science, you’re probably focusing your attention on mostly stats and coding. There’s nothing wrong with this, in fact, this is the right move — these are essential skills that you need to develop early on in your journey.

With this being said, the biggest knowledge gap that I’ve encountered during my data science journey doesn’t deal with either of these areas. Instead, upon starting my first full-time role as a data scientist, I realized, to my surprise, that I didn’t really understand business.

I suspect that this is a common theme. If you studied a technical field in college or picked things up using online courses, it’s unlikely that you ever had any reason to deep dive into business concepts like models, strategy, or important metrics. Adding on to this, I didn’t really come across data science interviews that stress-tested this type of understanding. Plenty of them tried to get a sense of product intuition, but I found that it rarely went beyond that.

The fact is that business understanding isn’t taught or evangelized in the data science community to the extent that it’s used in practice. The goal of this post is to help bridge this gap by sharing some of the resources that I found most helpful as I got up to speed on how businesses work from the inside-out.

16 Startup Metrics

This article from Andreessen Horowitz is a great place to start if you’re trying to get familiar with the slew of metrics and acronyms that get thrown around in a business, whether it’s a startup or not. On a more general note, their posts are consistently high-quality and are almost always worth your time. If you have a larger appetite, check out their follow-up post on 16 more metrics and the thread below for some additional tips on metrics.

30 Successful Types of Business Models

An overall solid resource, the articles at FourWeekMBA are worth exploring at some point. I particularly recommend this for an overview of all the different business models out there. It’s hard to come away from this without learning something new. For a more practical dive into business models, I also found this post going over how Slack makes money interesting.  .... " 

Business Model vs Technology

Always interesting Irving Wladawsky-Berger writes.  A number of useful research pieces are linked  to:

Irving Wladawsky-Berger Blog:  A collection of observations, news and resources on the changing nature of innovation, technology, leadership, and other subjects.

« The Economic Value of Artificial Intelligence | Main

It's All About the Business Model, - Not the Technology

In Reinvent Your Business Model, his recently published book, Mark Johnson argues that digital transformation and business model innovation are not the same thing.  New technology alone, - no matter how transformative, - is not enough to propel a business into the future.  The business model wrapped around the technology is the key to its success or failure.  Johnson is Senior Partner in Innosight, the strategy consulting firm he cofounded with Harvard Business School professor Clayton Christensen in 2000.  He’s been conducting research on business model innovation for over a decade, and in 2010 published Seizing the White Space.

Business model innovation has long been the domain of disruptive startups looking to compete against established companies by changing the rules of the game, - and, hopefully, creating new markets and reshaping entire industries.  But, it’s no longer enough for established companies to just roll out improved products and services based on their once-reliable business models.

“Building a great business and operating it well no longer guarantees you’ll be around in a hundred years, or even twenty,” notes Johnson.  “In 1965, the average length of time a company remained on the S&P 500 was thirty-three years.  By 1990, it had dropped to twenty years; in 2012, it was just eighteen.  Based on the 2017 churn rate, it is forecast that half of the S&P 500 will be replaced over the next ten years.”  .... '

Turning TV Upside Down

By former colleague Bob Herbold.  On a major change of business model that changes marketing.  We have seen it happen, but what does it mean?

Bob's Gutsy Leadership Blog
Netflix: Turning TV Viewing Upside Down

Completely changing the business model in an industry is not an easy thing to do.  On the other hand, it creates incredible rewards for the innovators.  Netflix is a primary example of this.  It basically put the Blockbusters of the world out of business in the late 1990’s as it introduced DVD’s by mail versus going to a store and renting a VHS tape.  It refined that model in the late 1990’s moving to an “all-you-can-watch” monthly subscription model for its DVD mail service.  The next change occurred in 2007 when it began offering streaming.

In the last few years, it has turned TV viewing habits upside down.  Traditional broadcast channels have schedule programs once a week at a certain time period.  You had to wait until, for example, next Thursday evening at 9:00pm to watch the next episode. Netflix has ignored tradition and offers all episodes at one time; it is called “binge programming.”.... " 

Talk: System for Generating New Service and Business Models

Please join us for the next ISSIP Digital Transformation Speaker Series (see details below, or click here).

via Sorin Ciornei, Series Chair, Cisco Systems
___________________________________
Edu4Inno: A service system for generating new services and corresponding business models

Dr. Christoph Peters, Project Manager, Postdoctoral Researcher, University of St.Gallen, University of Kassel

When:  Wednesday, July 11, 4:30pm - 5:15pm (UTC+01:00) Amsterdam, Berlin, Bern, Rome, Stockholm, Vienna   (10:30 AM ET)

Background:
Dr. Christoph Peters is a project manager and postdoctoral researcher at the Institute of Information Management (IWI-HSG) at the University of St.Gallen in Switzerland and the Interdisciplinary Research Center for Information System Design (ITeG) at the University of Kassel in Germany. Christoph studied Business Informatics at the University of Mannheim, Germany (M.Sc.-equivalent) and at the Queensland University of Technology in Brisbane, Australia. Christoph holds a doctoral degree from the University of Kassel, Germany (Dr. rer. pol.). He coordinates several research projects and heads a research group of eight doctoral candidates.
His research focuses on service innovation, the systematic design and management of services and work systems, their digitization and respective business models.

Task Description:
Edu4Inno: An service system for generating new services and corresponding business models” presents an educational service system that enables students to learn about service innovations and service systems from a theoretical background on the one hand and on the other hand, to systematically design new services and corresponding business models. Therefore, partners from practice present their real-world challenge at the beginning of a semester and commit themselves for some interview and interaction time slots. The students work in teams and with the partner while trying to master this challenge by systematically designing new and innovative services as well as corresponding business models. Thereby, each team works out predefined artefacts such as a service model, a functioning prototype, a business model, etc. The elaborated service innovations are pitched in a startup environment in front of the practice partners at the end of the semester. We consider our submission and the overall “Edu4Inno” concept as a highly impactful service innovation that continuously “produces” service innovation competences (for students) and service innovations (for practice). The “Edu4Inno” concept has been implemented several times in the last 3 years at two universities leading to an enthusiastic and innovative atmosphere among students as well as to award-winning service innovations.

During this talk Dr. Christoph will present Edu4Inno and key results from its last years' implementations.

Date and Time : July 11 2018 - 4:30pm (UTC+01:00) Amsterdam, Berlin, Bern, Rome, Stockholm, Vienna     (10:30 AM ET)

Zoom meeting Link:   https://zoom.us/j/984551771

Zoom Callin: (415) 762-9988 or (646) 568-7788 Meeting id 984551771
Zoom International Numbers: https://zoom.us/zoomconference

Was there a GE Model, and What Killed it?

I was impressed by what I saw at GE in a number of interactions, they have been mentioned in this blog from a tech perspective a number of times.  Is it just because the tech has not yet clicked?  This piece was enlightening to me.  Sharing capabilities in tech requires setting good standards.  Saw this, but not universally.   In the newer still emergent tech they are doing very well to provide goals and paths to achieve them.

Who Killed the GE Model?
By Benjamin Gomes-Casseres in the HBR

Who killed GE?

Of course, GE is not dead, and it may well revive and flourish as a company. After all, IBM came back from the dead in the 1990s. But the GE model is dead — and there’s a long list of possible suspects.

The GE conglomerate combined a wide range of industrial businesses under one roof. Unlike a pure holding company or a modern hedge fund, the GE model intended to create value by actively sharing capabilities among its disparate businesses, which, with one important exception, were all rooted in manufacturing. .... " 

Where IFTTT is Going

Looking for a business model, and things to attract businesses.   I suggest that they think of how they can introduce business rules and machine learning to add to their capabilities.  Find real value in the streams of data.   By combining data with public data,  creating new data, delivering metadata and constructing analytic results of value.

IFTTT’s Latest Plan: Helping Legacy Companies Take On Tech Giants, 
The handy automation service has years of experience and millions of users. Now all it needs is a business model.   By Jared Newman in Fastcompany

A brick-and-mortar powerhouse like grocery giant Kroger might not appreciate being called a “legacy” enterprise, but that’s the reality IFTTT is pitching as it tries to turn its popular-but-geeky internet switchboard service into a viable business.

IFTTT, which launched in 2011, can connect products that aren’t designed to work together. You might use the service to automatically log Spotify songs in a Google Drive spreadsheet, sync your Instagram photos to Dropbox, or change the color of your smart light bulbs if it’s going to rain that day. (Its name is an acronym for “if this, than that,” a nod to the kinds of conditional statements used by programmers.) .... " 

Thinking Platform vs Process

Clever way to think about this.

Instead of Optimizing Processes, Reimagine Them as Platforms   by Michael Schrage in HBR

Process optimization can transform user experience. Rethinking process optimization — visualizing processes as platforms — can transform your business model.

One applications outsourcing team, for example, proposed a clever UX tweak to help optimize a global fulfillment process their company managed for its biggest client.

The idea was simple: Instead of making buyers go through the entire online ordering sequence only to find stock-outs or delivery delays, why not alert them to product availability upfront? A little dab of inventory data would enhance both customer expectations and process efficiencies. Surely this cheap, customer-centric, and data-driven innovation would impress the client. .... " 

Reshaping Business with AI

Good executive view.

Reshaping Business with Artificial Intelligence

Closing the Gap Between Ambition and Action

by: Sam Ransbotham, David Kiron, Philipp Gerbert and Martin Reeves

Disruption from artificial intelligence (AI) is here, but many company leaders aren’t sure what to expect from AI or how it fits into their business model. Yet with change coming at breakneck speed, the time to identify your company’s AI strategy is now. MIT Sloan Management Review has partnered with The Boston Consulting Group to provide baseline information on the strategies used by companies leading in AI, the prospects for its growth, and the steps executives need to take to develop a strategy for their business.  ...  "

Request full article at the link, requires registration.

Prescriptive Business Models

Another great piece from O'Reilly.  Have seen many business models done with simple spread sheets, and even complex analytics built on top of these spreadsheets.   And these are thus,  prescriptive models.   Nice to see some coded up in this way, with source code. But do keep it as simple as possible.

A lesson in prescriptive modeling
Simulate new business models and practices with open source code.
By Jerry Overton July 25, 2017  .... " 

API Economy

Expanding business models

2017 Is Quickly Becoming The Year Of The API Economy

This year more CIOs will have their bonuses tied to how many new business models they help create with existing and planned IT platforms than ever before. This trend will accelerate over the next three years. CIOs and IT staffs need to start thinking about how they can become business strategists first, technicians and enablers of IT second. CIOs must create and launch new business models faster to keep their companies competitive. APIs are the fuel helping to make this happen.

The Urgency To Create New Business Models Is Driving API Proliferation

APIs (Application Programmer Interfaces) are the components that enable diverse platforms, apps, and systems to connect and share data with each other.  Think of APIs as a set of software modules, tools, and protocols that enable two or more platforms, systems and most commonly, applications to communicate with each other and initiate tasks or processes. APIs are essential for defining and customizing Graphical User Interfaces (GUIs) too. Cloud platform providers all have extensive APIs defined and work in close collaboration with development partners to fine-tune app performance using them. Amazon Web Services, Facebook, Google, Marketo, Salesforce, SAP Hybris, Twitter and thousands of other companies have APIs available. As of today, the Programmable Web lists 16,590 APIs in its database.

Removing The Hype By Benchmarking API Maturity .... "

Data Driven Business Strategies

 I like the closer to business process premise ....  Following up.

Gartner Report: Mastering Data and Analytics: ‘Table Stakes’ for Digital Business

Executive Summary: 

“The transformation to digital business is not incremental.”

The time is now for today’s marketing and analytics leaders to boldly pioneer not just new data-driven strategies, but entirely new data-driven business models. According to Gartner, enterprises not working to develop digital business models and supporting infrastructure today will find themselves functionally behind within three years. ...''

with registration

Hidden Costs of Industrial IOT

In Read Write Web: Cisco report.   If these are truly hidden costs, the business models are not very well done.

A recent report indicates that while firms are benefiting from investments in the Industrial Internet of Things (IIoT), the complexity of the technology can prove costly.

An April white paper entitled “The Hidden Costs of Delivering IIoT Services”, was authored by Cisco Jasper, a global IoT platform. The white paper determined that companies saw “internal productivity and efficiency” as the key incentives to integrating new IIoT technology into their business models.

And with IDC predicting over 30 billion IoT devices by 2020, connected equipment looks to become ubiquitous in the coming years.

However, the rush to integrate IIoT can weigh on companies who aren’t prepared for the added costs. .... " 

Business Models for the Internet of Things

Some good thoughts on making it work.

The business of Things
Developing a workable business model for the consumer IoT isn’t just important—it’s urgent.
By Alasdair Allan May 12, 2016

Alasdair Allan will talk more about the Internet of Things and data privacy in a session, Data privacy in the age of the Internet of Things, at Strata + Hadoop World London 2016, May 31 to June 3, 2016.

There really is only one business model on the modern Internet, and that’s advertising. People have refused to subscribe to services or pay for content. Instead, advertising supports the services that sit underneath almost everything we do on the Web. Think for a minute about how your day-to-day experience of the Web would be different if Google charged a monthly subscription fee for its search service, or used a micro-payment based approach to charge on a search-by-search basis. .. " 

Why Free NYC Wifi?

In the Washpo.  Really far beyond just providing easy and free communications between  people and services.  I am reminded of the early case of free Wifi in airports, which competed with pay services that had already been established.  How does this compare?    " ... At this very moment in New York City, you can walk up to one of 65 futuristic kiosks, punch in an email address on your phone and instantly receive a wireless Internet connection that follows you around town. ... "