‘Investment models’ for

Distributed Manufacturing in developing countries- an example and implications

Mike Gregory – formerly IfM

Outline

• Background• Distributed Manufacturing• A (replicable?) UK-India initiative• Business models and their implications• Distributed Manufacturing for off-grid communities

Background

• Distributed manufacturing has emerged as a strong theme during the following key engagements between India and UK

• UK-India Manufacturing Roundtable, New Delhi, India, April 2014• Exploring UK-India partnerships in distributed manufacturing Inward Mission to the UK, London,

UK, June 2014• UK-India Dialogue on Advanced Manufacturing, Bengaluru, India – September 2014• Manufacturing & Economic Growth; Redistributed Manufacturing Workshops, Cambridge, UK,

23rd of September 2015• NIAS has an international reputation for multi-disciplinary work focusing on major societal

challenges and involving leading experts from academia, industries and public service.• University of Cambridge has an international reputation for education, research and practice in

the pursuit of efficient and sustainable manufacturing systems.

So what is Distributed Manufacturing?

• Digitalisation of product design, production control, demand and supply integration, that enable effective quality control at multiple and remote locations

• Localisation of products, point of manufacture, material use enabling quick response, just-in-time production

• Personalisation of products tailored for individual users to support mass product customisation and user-friendly enhanced product functionality

• New production technologies that enable product variety at multiple scales of production, and as they mature, promise resource efficiency and improved environmental sustainability

• Enhanced designer/producer/user participation enabling democratisation across the manufacturing value chain

What the UK-India initiative might do - replicably?

• Enhance growth and productivity - of manufacturing SMEs using ‘Distributed Manufacturing’ principles and techniques

• Develop emerging ‘Distributed Manufacturing’ concepts - as a basis for collaboration and knowledge transfer

• Provide frameworks for long term collaboration and partnership - in advanced and distributed manufacturing.

Benefits for UK

• Key mechanism for accelerating innovation through rapid scale up

• Extension of UK manufacturing ecosystem to include Indian businesses

• Engagement with world class IT capabilities to leverage for manufacturing

• Access to high quality engineering resources and networks

• Better understanding of Indian market and access to expertise

• Visibility and benefits of large and growing multi-cultural market

Distributed manufacturing in the UK policy context

Benefits for India

• Key approach for growing manufacturing from16% to 25% of the economy

• Creation of jobs within factories, including MSMEs, and beyond

• Direct engagement of people in remote and less developed areas

• Development of broad capabilities to leverage across many sectors

• Vehicle to enable MSMEs’ participation in global value chains

• Enable ‘leapfrogging’ to the next level of sustainable manufacturing

Distributed manufacturing in the Indian policy context

‘Generic’ advantages for developing countries

• Sharing of market, manufacturing and engineering expertise• Market visibility and access through global networks• Opportunities to add value to local materials e.g. food• Extended opportunities for ‘import substitution’

‘Business Model’ – what’s that!

• ‘A business model is a holistic, contextualised pattern of attributes (and activities) representing value proposition, value creation, and value capture.

• Business model innovation seeks to identify unique configurations of business model attributes to compete with the dominant model and new entrant models.

• Disruption is the extent to which a new business model acquires the customers and beneficiaries of the dominant model or creates new markets’.

Source – ESRC Workshop 2015

So what does that mean for Distributed Manufacturing?

• holistic – needs to be seen in the wider context of a global industrial ‘ecosystem’• contextualised – needs to be tailored for materials, products and geographies• pattern of attributes (and activities) – actually doing something!• representing value proposition – with clear benefits• value creation – identifiable and measurable• and value capture – the benefits can be realised by someone!

…and in practical terms…‘Infrastructure’•Energy - local generation but need for storage?•Equipment - grant, leasing or rent model?•Communications - including IT and internet access•Training - public support likely to be necessary•‘Market’ - new ‘transparent’ mechanisms essential•Logistics - to get stuff out!Operations•Product mix - vital to judge correctly•Responsiveness - dependent on production process•Payments - cash flow critical for small enterprises

Distributed Manufacturing for off-grid communities

• Enabling local production - can capture value locally and provide tradable goods

• Easy access to product and manufacturing knowledge - can enable appropriate industrial structures and ‘business models’

• Work will be needed to tailor approaches - for different contexts and the availability of local resources

• Principles are scalable - and not advanced technology dependent (apart from internet access)

• An effective ecosystem - requires clear business models for all the actors