Hybrid Operating Model 4.0

During COVID, some companies were at the edge of closure because of their inadequate operating models. The traditional operating model focuses on segmenting the clients, meaning that it only looks at the customer experience (CX), making sure that high profile customers are being accommodated by the senior staff, although their request might be simple that a junior staff that do best. In our opinion this approach ignores the potential of an optimized operating model, whereas the CX is being taken care of from one end, but nothing is done to the processes within.

In traditional operating models, both standardized and customized products are not catered for properly, where standardized products are processed in suboptimal time, and customized products face quality issues. To elaborate, when putting both products categories, standardized and customized, on the same value chain, this will cause significant loss of optimization potential, where in this case, a single process is catering for both sets which differ significantly in product variance and complexity, do you foresee this as an optimized approach?

We are past the time when a simple and rigid operating model can do the job; companies need an operating model that's structured to optimize profit margins, and flexible enough to change with the external environment promptly. 

The proposed operating model is designed to deliver each product category in right time and with the right quality to meet the market need. To elaborate, the model focuses on delivering the standardized products in the fast format, possibly with the highest-possible automation, to ensure cost optimization and maintaining competitive advantage. On the other hand, the model focuses on delivering the customized products with the highest possible quality by deploying speciality expertise and workmanship, achieving profit optimization.          

Introducing the "Hybrid Operating Model 4.0" which aims to segment the core of the organization, the value chains, end-to-end, starting with segmenting the products categories. This model ensures all product categories are catered for properly, regardless of the source of request. This achieves high CX and satisfaction, in addition, to optimizing the costs and profits of the organization.

We have experience applying hybrid operating models worldwide and we expect a reduction of lead time by around 70 - 80% and an improvement in the operating profit margin by 20 - 30%. 

To successfully apply this offering, it should start from the top, the leadership should be empowered enough to make bold decisions and move towards the uncomfortable to achieve greatest. In addition to that, a thorough change management plan needs to be deployed to stimulate a bottom-up approach as well.

Think of your organization as a "Russian Doll" where under the overarching operating model, there are a set of different operating models accommodating diverse product categories, however they all work together to achieve the highest possible profit margin. These operating models can be promptly changed once the market needs start shifting, without causing significant changing to the overarching operating model.

Please reach out to us and let's determine collectively if this offering is for you, and if so, how to apply it, in the most effective way.