Sustainable value creation in manufacturing networks

This project is supported by funding from the Nanosciences, Nanotechnologies, Materials and new Production Technologies Programme under the   7th

Research Framework Programme of the European Union.

Rationale for the SustainValue project• Enterprises must take into consideration not just the economic goals but also the

need to now simultaneously meet environmental and social goals in carrying outbusiness.

• Economic, environmental and social impacts occur at all stages in the value‐network, including during customer use. This implies not only being able tomanage internal activities and operations of the producing organization, butalso getting all the value‐network partners to follow the same principles andperformance standards that have influence on the sustainable product andservice delivery performance.

• Sustainable economy will present new opportunities for the development of newproducts, identification of changes in markets and optimizing internationallyoperating network according to the new sustainability criteria. A concrete way forexploiting these opportunities is the development and implementation of newsustainability‐based industrial models and concepts.

SustainValue objectives

Objective 1: To design governance models and business architectures for sustainable value adding production networks. 

Objective 2: To deliver a proven set of tools and methods for sustainable and value‐adding business‐modelling and network‐analysis and to provide a methodology for developing sustainable solutions. 

Objective 3: To develop a governing framework for sustainability performance standards across value adding productionnetworks and verification processes. 

Objective 4: To test and validate the developed tools and methods in industrial use cases.

The overall goal of the project is to develop industrial models, solutions and performance standards for new sustainable and more performing production and service networks.

Sustainability:Sustainable business growth

Increased environmental friendliness

Enhanced social well‐being

The  overall  goal  is  to  develop  industrial  models,  solutions  and performance standards  for  new  sustainable  and  more  performing  production  and service  networks

Partners:

Industry• CLAAS (DE)• Elcon Solutions (FI)• FIDIA (IT)• Riversimple (UK)

Standardisation• DIN (DE)

RTD• FIR (DE)• POLIMI (IT)• Univ. of Cambridge (UK)• Univ. of Stavanger (NO)• VTT (FI)

Sustainable value creation in manufacturing networks

Project approach 

WP1 Governance and business architectureWP1 Governance and business architecture

WP2 Business models in sustainable manufacturing networksWP2 Business models in sustainable manufacturing networks

WP3 Life‐cycle based products and service developmentWP3 Life‐cycle based products and service development

WP4 Sustainability performance standardsWP4 Sustainability performance standards

WP5 DemonstrationWP5 Demonstration

Dissemination

Exploitation

Standardisation

MethodsToolsGuidelines

WP1 Governance and business architecture• WP1 is aimed at undertaking requirements analysis from different perspectives to 

guide the formulation of the SustainValue governance model, architecture specification and project success criteria.

• Specific objectives include:1. Produce a set of major sustainability gaps in current outlying business models in EU manufacturing industries of different size to be addressed by the project 2. Analyse the requirements of key stakeholder groups in the context of sustainability gaps by taking into account market analysis, risks and regulatory obligations 3. Design governance model and architecture specification for the core development work (WPs 2‐4) with particular attention to business models, risk management, optimal life‐cycle‐based products and service environments and sustainability performance standards4. Specify criteria for measuring project success in terms of outputs, key performance indicators and impact

• The main outcome of WP1 includes a governance model for manufacturing network and a business model architecture specification. Sustainability has to be integrated into companies’ and networks’ core strategies in which the governance model plays an important role. The business model architecture supports manufacturing companies when designing their structure, sustainable products, services and processes. 

SustainValue governance model

• The model illustrates the sustainability governance within a manufacturing network as a process that guides the activities of all involved actors towards sustainable development and performance over product life‐cycle. The three main tasks are in accordance with company level approaches but highlight the need for multilevel network governance. Thus the model illustrates a process which integrates i) requirements and commitment of stakeholders within a business ecosystem as well as ii) business models and the self‐interest of manufacturing network companies. 

D1.2, Figure 4.2

WP2 Business models in sustainable manufacturing networks

• WP2 analyses the characteristics of current and innovative sustainable businessmodels and value networks. This analysis is the basis for a set of requirementsdescribing the business need for new tools and methods integrating a networkperspective. The set of tools and methods will be used to support a process forsustainable business modelling that will assist companies in embedding anddelivering sustainability through a multi‐stakeholder view.

• Specific objectives include:1. Understand the detail state‐of‐art and state‐of‐practice in business modelling and value‐networks, 

with a focus on innovative business models that have the potential to deliver sustainable value2. Compare future‐oriented, leading practice with state‐of‐the‐art tools & methods3. Identify specific gaps in current tools & methods4. Design and develop new methods & tools5. Learn from early use of these methods & tools in industrial settings. Assess their competence at 

enabling novel, more sustainable business models and value‐networks (with WP5)6. Revise the design of tools & methods based on experience.7. Deliver a proven set of tools & methods that are accessible to large and small companies.

Proposed Steps  Proposed Tools/Methods Expected outputs

Step 1 ‐ Purpose of the business  System SWOT analysis – SUSPRONET PESTLE/STEEPLED Sustainability continuum

Reason for being in the business, approach and drivers for sustainability, products and service bundles, industry‐related needs, norms and opportunities 

Step 2 ‐ Identify potential stakeholders and select sustainability factors 

Value mapping tool GRI guidelines, SASB (industry‐specific) Scenario management tool (developed in 

WP3)

Potential stakeholder types and what do they value, sustainability priorities

Step 3 ‐ Explore  and develop new opportunities for sustainable value proposition

Value mapping tool Scenario management tool (developed in 

WP3)

Sustainable value proposition for a firm and its stakeholders – value opportunities

Step  4 ‐ Concept generation and selection

Sustainable business model element archetypes typology

Sustainability impact calculation tool (developed in WP3)

Transformation/development of the new sustainable value proposition 

Step  5 – Define and develop the value creation and delivery system, and the value capture mechanism 

Osterwalder and Pigneur business model canvas

Life cycle cost estimation tool (developed in WP3)

Key activities, key resources, key partners, key channels, key mind‐set and the value exchanges and value capture for the stakeholders.

Sustainable Business modelling process and toolset

D2.4, Table 6-1

Value mapping tool ‐Movement of value

WP3 Life‐cycle based products and service development

• The objective is a development methodology for sustainable solutions that is designed according to the constraints given by the industrial context and life cycle phases considered in the industrial partner premises.

• Specific objectives:1. Integration of all dimensions of sustainability into solutions 2. Approach to develop solutions from integrated perspective to support interaction between 

providers, customers and other stakeholders3. Consideration of all stakeholders instead of only looking out of a „business perspective“ and 

„customer perspective“ and consider networks as value providers4. Consideration of all life‐cycle phases

• The main outcome of the WP is enabling and facilitating the development of sustainable solutions in an efficient and structured way. Therefore a development framework will be designed to support the complex procedures within a company to provide sustainable solutions. Furthermore, useful tools that support within this procedure are presented, adapted or new ones developed. 

Development Framework for Sustainable Solutions

Example: Strategy Development and Interfaces

Sustainability Impact Calculation (SIC) Tool

Economic Dimension Environmental Dimension Social Dimension

User perspective Manufacturer perspective

Resource Depletion Emissions

Basis Indicators (Yes, No)

InfluencialIndicators

Monitoring Indicators

Child labour

Forced labour

Freedom of association

Health and safety

Corruption

Renumeration

Training

Benefits

Absenteeism

Rate of injuriesand fatalities

Noise

Gender and minorities discrimination

Job creation for disabled 

Nuisance

Maximum working hours

Harassment

Violation of property rights

Complaints from local community

Job creation

Support to the economy

MIPS Quantitative Indicators Qualitative Indicators

Global Warming Potential

Eco‐Toxity

Human Toxity

Stratospheric OzoneDepletetion

Photochemical OxidantFormation

Eutrophication

Acidification

Waste/Production

Residues

Odour

Recycla‐bility

Disassemblability

Abiotic materials

Biotic materials

Air

Water

Soil erosion

TCO NPV IRR LCC

WP4 Sustainability performance standards

• Work package aims at the development of a governing framework for sustainability performance in complex and integrated product‐service value networks. 

• Specific objectives include:• Defining and specifying multi‐objective performance requirements within complex integrated 

product‐service value networks• Defining sustainable metrics, sustainability key performance indicators, and supporting integrated 

platform• Developing sustainability guidelines and defining a verification processes for continuous value 

network improvement

• Case studies with CLAAS and Riversimple have been conducted to test propositions put forward in the deliverables (Sept. 2012 & Feb. 2013).

Multi‐ObjectivePerformanceFramework

D4.1, Figure 32

Performance Metrics & KPIsMaturity Model–based Approach

• There are 2 levels of assessment within the platform. An aggregated level thatshows the maturity of each PA and a second level, area level, that implies abreakdown of the previous one into areas’ attributes and serves to evaluated thebest practices within each area, according to 5/6 attributesProcess Area 1

Process Area N

….

Aggregated Spider Diagram

WP5 Demonstration• Work package WP5 aims at implementing and demonstrating practices and 

business models developed within SustainValue.

• Specific objectives include:• Concept and development of case studies and pilot scenarios to implement and validate 

SustainValue solutions in different industrial sectors.• Integration of sustainable business models in existing integrated manufacturing value networks.• Demonstration of the developed optimal life‐cycle‐based products and service policies in a real 

industrial environment.• Demonstration of specific sustainability performance indicators in a real industrial environment.• Definition of assessment criteria for the evaluation of the industrial relevance and impacts of the 

project. • Extensive testing to fully measure results compliance with the project objectives.• Definition of improvements to overcome limitations possibly arising from the case studies. 

• The core research carried on in the project will be validated in collaboration with end‐users (industrial case studies).

Case Study description

RIVERSIMPLE - Implementing sale of service strategy

ELCON - Strengthening life cycle thinking among industrial businesses

FIDIA - Condition based scheduling of sustainable maintenance services

CLAAS - Ratio basedperformancemeasurementincluding sustainabilitycriteria for agriculturalprocesses

Integration of tools from all partners in the development methodologyD

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Sustainability Impact Calculation (SIC) Tool (CLAAS/FIR…)

Life Cycle Costing Tool (ELCON/VTT…)

Value Mapping Tool (CLAAS/UC…)

System Dynamics for Service Planning (FIDIA/Polimi…)

WP6 Dissemination and exploitation

• The main focus of the WP will be on full utilization of the results and findings during and after the end of the project.

• Specific objectives include:• Organising a strategy in collaboration with all project partners on how to maximise the dissemination 

potential of the project outputs. • Providing a plan for exploitation of the project outputs to support the long term effects.  

• Besides creating awareness and interaction among the consortium partners and other parties, in industrial and academic interest groups and in the interested public, as well as coordinating all activities related to dissemination, one of the main outcomes of the WP is the development of a standard.

Key results by M24

WP1 Governance and business architecture

WP2 Business models in sustainable 

manufacturing networks

WP3 Life‐cycle based products and 

service development

WP4 Sustainability performance standards

WP5 DemonstrationAssessment of case studies (D5.1)

Report on methodology assessment (D5.2)

WP6 Dissemination, exploitation, standardisationDissemination and communication plan (D6.1)

Exploitation plan (D6.2)

Sustainability gaps and stakeholder requirements (D1.1)Governance framework for manufacturing networks (D1.2)Business model architecture (D1.3)Project success criteria (D1.4)

State-of-practice in business modelling and value networks (D2.1)Gap analysis in business modelling and value network methods and tools (D2.2)Proposed design of new methods & tools (D2.3)First stage prototype tools and methods (D2.4)

Requirements of the new solutions development methodology (D3.1)Possible existing methodologies and the achievement of requirements (D3.2)

Multi-objective sustainability-performance framework (D4.1)Sustainability metricsand sustainability-performance KPIs(D4.2)

Project acronym: SustainValue

Project name: Sustainable value creation in manufacturing networks

Call and Contract: FP7‐NMP‐2010‐SMALL‐4

Grant Agreement no.: 262931

Project duration: 01.04.2011 – 31.03.2014 (36 months)

Co‐ordinator VTT VTT Technical Research Centre of Finland (FI)

Partners: POLIMI Politecnico di Milano (IT)

UiS Center for Industrial asset management, University of Stavanger (NO)

FIR Research Institute for Operations Management at RWTH Aachen University (DE)

DIN DIN, The German Institute for Standardization (DE)

FIDIA FIDIA (IT)

Riversimple Riversimple LLP (UK)

CLAAS CLAAS Selbstfahrende Erntemaschinen GmbH (DE)

ELCON Elcon Solutions Oy (FI)

UC University of Cambridge (UK)

This project is supported by funding from the Nanosciences, Nanotechnologies, Materials and new Production Technologies Programme under the   7th

Research Framework Programme of the European Union.