Industrial Structuresand the

Role of ManufacturingImplications for measurement

ONS - October 2014

Prof. Mike Gregory

Outline

• Changing industry structures

• Knowledge and value chains

• Emerging industries

• Implication for measurement

The full cycle from understanding

markets and technologies

through product and process

design to operations, distribution,

services and sustainability

Industrial System

Changing Industry Structures

• Companies increasingly focus on particular stages of value chain

• Stages in the value chain may have different ‘owners’.

• Interfaces and interdependencies poorly understood.

• Implications for industrial competitiveness

R&D Design Supply ProductionRoutes to

MarketAfter Sales Services

R&D - Plastic Logic

• ‘Power of electronics with pervasiveness of printing’

• Enables new product concepts including displays & sensors.

• Potential to create new industry via radical change in economics of production

Design - Apple

• Team of engineers designed & built first iPod in less than year

• Relatively established technologies packaged for aesthetics & functionality

• Production completely outsourced

Production - GKN

• 40% of world market for constant velocity joints

• Leadership enabled by production capability linked to advanced design

• Close integration with customers

• Local production facilities worldwide

Distribution - Tesco

• Commissions designs

• Orchestrates production

• Distributes & sells

• Manages complex procurement & supply networks

• Activities co-ordinated globally

Service - Xerox

• Pioneered service based business models

• Service offering now includes business improvement

• Re-manufacturing a growing strength

• Example of product-service systems

So what about knowledge?

• Ensure take up of new knowledge

• Marshal research across value chain

• Support & capture “emerging industries”

• How can we help keep industrial systems healthy, efficient, competitive and evolving?

R&D Design Suppy ProductionRoutes to

MarketAfter Sales

Servics

Identify Societal / Market Needs & define system requirements & barriers

Develop Useful Insights from Fundamental Knowledge

Integrate Fundamental Knowledge into Enabling Technology

Research SystemsInteracting research activities

(E O’Sullivan: Adapted from NSF ERC Strategy Framework)

Research & Industrial Systems

(Eoin O’Sullivan & Mike Gregory)

Linking research to industrial needs

Le

vel o

f F

un

din

g

Basic Research Development / Scale-up Commercial Operation Mature Industry

Navigation of industrial emergence (barriers, enablers, inhibitors) depends on understanding of industry-level factors, e.g.:

• Industrial design• Manufacturing strategy• Production scale-up• Supply networks• Investment• Regulation & standards

Time

Valley of Death

Funding from public sector

Private sector sales

Emerging IndustriesNew science ideas & technology opportunities into new industries, new jobs

(Eoin O’Sullivan)

Le

vel o

f F

un

din

g

Time

Emerging IndustriesDifferent value chain configuration for different emergence phase

(Eoin O’Sullivan)

Le

vel o

f F

un

din

g

Time

Emerging IndustriesDifferent research for different innovation needs Different research for different phases of emergence

(Eoin O’Sullivan)

Le

vel o

f F

un

din

gEmerging Industries

(E O’Sullivan & L. Dodin)

Science lab-grown human tissue

Time

Regenerative Medicine

Le

vel o

f F

un

din

gEmerging Industries

(E O’Sullivan & L. Dodin)

Seeding of stem cells on

engineered structures

Science lab-grown human tissue

Time

Regenerative Medicine

Le

vel o

f F

un

din

gEmerging Industries

(E O’Sullivan & L. Dodin)

Seeding of stem cells on

engineered structures

GMP manufacturing & automation processes

Science lab-grown human tissue

Time

Regenerative Medicine

Le

vel o

f F

un

din

gEmerging Industries

(E O’Sullivan & L. Dodin)

Seeding of stem cells on

engineered structures

GMP manufacturing & automation processes

Advances in logistics & distribution technologies

Science lab-grown human tissue

Time

Regenerative Medicine

Emergence map – CT Scanners

(Eoin O’Sullivan)

What is an “Emerging Industry” anyway?Focus on emergence transitions…

Mature ”emerged”

market

Specialist market Early

adopter market

Growth mass

market

External technologies

Go

od

sci

ence

idea

s

(E. O’Sullivan – after H. Chesbrough)

Misalignment & leakageSCIENCE

DominatedEmergence

TECHNOLOGYDominatedEmergence

APPLICATIONDominated Emergence

MARKETDominatedEmergence

Mature ”emerged”

market

Precursor Embryonic Nurture Growth

(E. O’Sullivan)

Implications for measurement

• Broad approach to industrial systems can capture the breadth and context of manufacturing

• Mapping of knowledge type to value chain can clarify sources of value and opportunity

• Managing industrial emergence a neglected area for manufacturing but vital for future value capture

• International evolution of industrial innovation and production ‘ecosystems’ a major challenge

• New breed of industrial systems ‘architects’ and ‘monitors’ needed!