Industrial Structures

and the

Role of Manufacturing

Implications 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 Production

Routes

to

Market

After

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 Production

Routes

to

Market

After

Sales

Servics

Identify Societal / Market Needs & define system

requirements & barriers

Develop Useful Insights from Fundamental Knowledge

Integrate Fundamental Knowledge into Enabling Technology

Research Systems Interacting 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

ve

l 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 Industries New science ideas & technology opportunities into new industries, new jobs

(Eoin O’Sullivan)

Le

ve

l o

f F

un

din

g

Time

Emerging Industries Different value chain configuration for different emergence phase

(Eoin O’Sullivan)

Le

ve

l o

f F

un

din

g

Time

Emerging Industries Different research for different innovation needs

Different research for different phases of emergence

(Eoin O’Sullivan)

Level o

f F

un

din

g

Emerging Industries

(E O’Sullivan & L. Dodin)

Science lab-

grown human tissue

Time

Regenerative

Medicine

Level o

f F

un

din

g

Emerging Industries

(E O’Sullivan & L. Dodin)

Seeding of stem cells on

engineered

structures Science lab-

grown human tissue

Time

Regenerative

Medicine

Level o

f F

un

din

g

Emerging 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

Level o

f F

un

din

g

Emerging 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

scie

nce i

deas

(E. O’Sullivan – after H. Chesbrough)

Misalignment & leakage

SCIENCE

Dominated

Emergence

TECHNOLOGY

Dominated

Emergence

APPLICATION

Dominated

Emergence

MARKET

Dominated

Emergence

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!