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Dr Patrick Dixon Chairman Global Change Ltd

Fellow, Centre for Management Development, London Business School

TakeHoldoftheFutureHowtrendswillimpactmanufacturing

Complexity and scale

create risks

Title Text

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US / EU block on Chinese solar cells

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Trade strategies often overtaken by

events World can change faster than you can hold a board meeting

Time to move factory ?

Agility

CLOSER SUPPLIES

Yet many trends changing more

slowly than people think

Cash growing - bank branches continue -

music, fashions, food, trains, planes, hotel rooms, homes and

furniture very similar

Digital Enterprise 4.0

REALITY CHECK

Robots in Factories only 7% pa

92,000-170,000 2000-2012

3D scans - 3D printing

The future is about

The future is about

EMOTION

Up to 70% of sales of new convenience stores from people

who live

40% of adults in UK dont know by 4pm what

they will eat for dinner tonight

Instant information

Fast Fashion 15 days design / order to market - 28% savings on unwanted markdowns, lost sales or stockouts

MOBILE 50% of all UK online sales are using mobile

Loca9onMarke9ng

Over4000roadhauliersinEU

1.3bnhomedeliverede-comitemsinUKayear(+12%pa)

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Gold standard:10am orders for 3pm Delivery

Anywhere in same country

10amordersfor3pm

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LARGER SCALE

InmanyEUna9ons,>70%ofretailspendin

VW mega platform

VWMegaPlaTorm-basisfor1mcars

Over700,000kmsdriven

World too small for more than:

5 large auto companies2 airline manufacturers

3 mobile operating systems

10 large pharma

CUSTOM BUILD

Multi-product assembly lines

Niche Manufacturers

EMERGING DEMANDS

30 years

85% of world population will be living in emerging

markets in 10 years

Science,technologyengineering,

maths

MostSTEMgraduatesinemergingmarkets

ChinaandIndiadominate

STEMdegreesincludingpost-graduate/PhDs

SOUTH to

SOUTH

Since 1980, global trade has grown at twice the rate of production but this trend is slowing down rapidly

South to South Trade will grow

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Regional trade growth in Asia $ / %

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Expect huge growth in component trade

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World exports of parts and components

FACTORY MOVES

8%wageinfla9oninChina-partoffsetbycurrencyfall

NearshoringBoom

ManufacturinginMexicowillgrowforUS

LIVE DATA

Internet of Things

1.5m components tracked perfectly in Airbus supply chain

250millionwearabledevicesby2023

$20bnto$70bnby2025

$12bn security and controlhome automation market by 2018

Big Data

Predict failure - detect error - repair automatically

Little Data often matters

most

Big Data = Pattern Little Data = Piece Little Data = Person

Global and Mobile Control

CYBER SECURE

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WebofThings-BigData-Cloud180bnspamemailsaday

600mnewviruses,malware,trojansayear>220mpeoplesdetailslostinsingleadack70%largecorpora9onshavebeenhacked

100,000adacksanhouronUSNavyParalysisofEstoniagovernmentin2007

WorriesaboutUS,Russia,Chinapenetra9onofweb/cloudfollowingPrism

GREENER PROCESS

$40 Trillion Green Tech Boom driven by oil price, cost cuts, green activism

75% global growth in green energy is in China

120,000 terawatts of sunlight /day 7,000 times total global power use Power Moscow from Libyan Desert

Output up 10% in 2014

SolarCells$/wad1990-2015

subsidies

PriceParity

InJune2013electricitypricesin

30% EU trucks run empty

Wewaste25million

milesayeardrivingempty

trucks

USmajorretailer

>15% energy saving / ton for 75 cents a litre

CO2 emissions stable for 24

months of global economic growth

Complexitycreatesrisk-needforagilitySpeedwillbeevenmoreimportant

MobileclientsandproductswillshakeretailEmergingmarketsbecomedominantExpectmassivewavesofconsolida9onExpectshijfromglobaltoregionaltrade

Nextdigital=fusion:IOT-BIGDATA-CLOUDPrepareformajorcyber-disrup9ons

WorldwillgogreenfarfasterthanexpectedRemembertheRealityCheck:9mingreallymaders

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Dr Patrick Dixon Chairman Global Change Ltd

globalchange.com15millionvisitors

5millionvideoviews

@patrickdixon

http://globalchange.com