Advanced manufacturing and its implications for companies - Goran Gross
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Transcript of Advanced manufacturing and its implications for companies - Goran Gross
Göran Roos Chairman, Advanced Manufacturing Council, Adelaide, Australia
Professor, Strategic Design, Swinburne University, Melbourne, Australia Honorary Professor at Warwick Business School, Warwick University, UK
Visiting Professor in Business Performance and Intangible Asset Management, Centre for Business Performance, Cranfield University, UK
Adjunct Professor, Mawson Institute, University of South Australia, Adelaide, Australia Adjunct Professor, ECIC, University of Adelaide
Adjunct Professor, University of Technology Sydney Business School Adjunct Professor, Nanyang Technological University, Nanyang Business School
Senior Advisor, Aalto Executive Education Academy [email protected]
Making the distinction between advanced manufacturing and traditional manufacturing is short-sighted, as technological advances and improvements in manufacturing occur in more mature or traditional industries as well as in emerging ones.
An appropriate advanced manufacturing definition should be dynamic in nature be treated as more of a benchmark. That is, there is a constant iteration of improving manufacturing frontiers, which often are comprised of pre‐commoditized processes and products. Therefore, what is classified as “frontier” is constantly changing, and, likewise, advanced manufacturing is always changing.
Advanced manufacturing is manufacturing that entails rapid transfer of new knowledge (frequently science and technology) into manufacturing processes and products. In essence it entails one or more of the following:
Producing offerings that use new knowledge
Using equipment or techniques in the production process of an offering that embodies new knowledge
Using inputs into the production process that either embodies or use equipment or techniques in the production process that embodies new knowledge
© Copyright Göran Roos 2013
Innovation &
Effectiveness Focus
Imitation &
Efficiency Focus
Innovation &
Effectiveness Focus
Imitation &
Efficiency Focus
© Copyright Göran Roos 2013
Continuous focus on cost reduction and productivity improvement
Continuous focus on integrated innovation and productivity improvement
© Copyright Göran Roos 2013
Instrumentalvalue
Intrinsicvalue
Extrinsicvalue
In the ability to identify changes and promote rapid reactive and proactive responses
In the abilities that produces higher productivity, efficiency and effectiveness in the firm’s operations and processes
In the ability to produce different products and achieve different goals using the same manufacturing plant:
In the ability to be fast
© Copyright Göran Roos 2013
Moura, DA. & Botter, RC. 2012. “Can a shipyard work towards lean shipbuilding or agile manufacturing?” in Rizzuto & Guedes Soare eds. “Sustainable Maritime Transportation and Exploitation of Sea Resources” Taylor & Francis Group. London.
Innovation Management Innovation Strategy &
Innovation Management System
Innovation to Create Value Through
Efficiency Improving Innovations, Technology Based
Innovations, Design Based Innovations, Art Based
Innovations and Hermeneutic Based Innovations
Inn
ovati
on
to
Ap
pro
pri
ate
Valu
e
Th
rou
gh
Eff
ec
tive
ne
ss
Im
pro
vin
g In
no
va
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ns
an
d
Bu
sin
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In
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Roos, G., “Integrated Innovation – The necessary route to profitability“, in B+I Strategy (ed.), Estrategia, Bilbao, Spain, December, 2011, pp. 51-58 © Copyright Göran Roos 2013
Resources
Resource Deployment System
Owned or ControlledBy the Firm
Owned or ControlledBy the Firm
Owned or ControlledBy the Firm
Additive Additive
Owned or Controlledby the Other Party
Owned or ControlledBy the Employee
MONETARY
PHYSICAL
RELATIONAL
ORGANISATIONAL
HUMAN
MONETARY PHYSICAL REL. ORG. HUMAN
Knowledge
codification,new IP
Building &
developingrelationships
Developing
prototypes
Sales of
man-hours
Sale of IP,
processes &knowledge
Produce
Bynumbers
CRM
Developing
competencethrough use
Relationship
arbitrage
Use of other
company’sassets
Access to
processCo-learning
Sales of
products
Design
&Chemical
effect
New
Processes
New
Knowledge
Investment
in assets
Investment
in buildinglinks
Investment
in brands,image andsystems
Recruitment
training,conditions
Training
Chemical
synthesis
Word of
mouth
Systems
generateIP
Investment
In financialinstruments
© Copyright Göran Roos 2013
An articulation of problems, as yet unsolved, that if solved would dramatically improve the performance of the firm but the firm do not know how to solve them
© Copyright Göran Roos 2013
Preface by the CEO
[innovation strategy and innovation process for the development of the firm in light of its vision and strategy].
Introduction
[background, including which role this document plays in the firm’s processes, its significance, what it should govern, for how long it is valid, frequency and timing of updates, who is responsible]
Summary
[short and punchy summary of the innovation strategy that can be used in outgoing communications, especially if the main document is classified as confidential – this is normally a listing of those problems, that if solved, would dramatically improve the performance of the firm, with justifications]
The firm’s development
[short version of the firm’s vision, strategy and objectives]
The objectives for innovation activities at the firm
[overarching, long-term, precise and clear]
The innovation processes in the firm
[brief description including basic principles, the planning and control system, responsibilities]
External changes
[the key trends and changes that affect or may affect the future of the firm]
Knowledge required
[in light of overall objectives and changes in the environment]
Strategic challenges
[the most important long-term potential challenges]
Operational challenges
[existing obstacles to be overcome]
Adaptability
[important measures to increase organisational flexibility and adaptability]
Internationalisation
[international markets, international partners?]
Focus
[overall direction of innovation in the next five years] areas [description of the firm’s innovation areas] priorities [which areas are important] targeting of each area [innovation activities over the next five years] program [description of programs] project [description of projects]
Management and implementation
[key implementation and governance issues]
Administration
© Copyright Göran Roos 2013
STRATEGY Suggestions from all parts of the organisation
& Membership from all parts of the organisation
Innovation Office
Corporate Head of Innovation
CEO
Decision
Innovation Meeting
Innovation Groups
External Proposals
External Proposals
© Copyright Göran Roos 2013
Description Where used Focus Tools Benefits Implementation
Lean A way of working which identifies and eliminates waste to deliver improved value and service
Where fast results are needed Where shorter lead times and
improved flexibility are critical Where large numbers of front line
staff work together Where limited performance data is
available
Process Customer Defect reduction Waste reduction
Traditional management tools
Statistical Tools
High potential cash savings Moderate potential for soft savings Improvement in service delivery
External support required Moderate time from initiation to
results Moderate implementation costs Significant staff engagement
Six Sigma A structured approach to data driven problem solving
To reduce costs or increase volume Where mature data analysis is in
place Where time exists to analyse the
right data Where specific training can be set
up and supported
Process Customer Defect reduction
Traditional management tools
Statistical Tools
Moderate potential cash savings High potential for soft savings Improvement in service delivery
External support required Long time from initiation to results Moderate implementation costs Some staff engagement
BPR An approach to transforming activity through process change
Where IT is likely to be the main driver of change
Change is often done out of line
Process Traditional management tools
High potential cash savings Moderate potential for soft savings Improvement in service delivery
Moderate time from initiation to results
High implementation costs Significant staff engagement for
short periods Kaizen An approach to continuous incremental improvement, creating more value and less waste
Where fast results are needed Where the right group of people
can be coordinated for a blitz approach
Process Customer Defect reduction Waste reduction
Traditional management tools
Statistical Tools
High potential cash savings Moderate potential for soft savings Improvement in service delivery
Short time from initiation to results Low implementation costs Significant staff engagement for
short periods
Benchmarking A comparison with external organisations to highlight and develop best practices
Where time exists to analyse external performance data
Where other improvement strategies are required
Process Customer Defect reduction Waste reduction
Traditional management tools
Moderate potential cash savings Low potential for soft savings Improvement in service delivery
Short time from initiation to results Low implementation costs Some staff engagement
TQM A way of working which focuses all participants on quality, driving long term success through customer satisfaction
Where refocus on customer needs is required
Where formal management systems are already in place
Process Customer Defect reduction
Traditional management tools
Moderate potential cash savings High potential for soft savings Improvement in service delivery
External support required Long time from initiation to results Moderate implementation costs Significant staff engagement
EFQM An organisational framework designed to improve competitiveness using the fundamental concepts of TQM
Where self assessment and peer reviews are valued and repeated periodically
Process Customer Defect reduction
Traditional management tools
Moderate potential cash savings Moderate potential for soft savings Some Improvement in service
delivery
Moderate time from initiation to results
Moderate implementation costs Some staff engagement
© Copyright Göran Roos 2013
Science Art
Medicine Design
Reductionist Approach Integrative Approach
Exploring ModelsChanging Reality
Subjective Understanding
Expressing ModelsQuestioning Reality
Individual Understanding
Explanatory ModelsExplaining Reality
Universal Understanding
Working ModelsImproving Reality
Hermeneutic Understanding
Abstract Presentation of Insights
Practical Presentation of Insights
Emotional
Experience
Practice
Roos, G., “Integrated Innovation – The necessary route to profitability“, in B+I Strategy (ed.), Estrategia, Bilbao, Spain, December, 2011, pp. 51-58 © Copyright Göran Roos 2013
Trajectories of Existing Core Technologies
Trajectories for potential substitute technologies
Mastery of relevant Key Enabling technologies
© Copyright Göran Roos 2013
Key Enabling technologies: Nanotechnology,
Micro- and nano-electronics, including semiconductors
Industrial Biotechnology,
Photonics,
Advanced Materials and
Advanced Manufacturing technologies and systems
Mastering of relevant key enabling technologies is absolutely required to ensure that it is possible to produce future innovative products and is therefore a strategic priority to ensure competitiveness.
In particular KETs have two specific characteristics that separate them from other «enabling technologies»: they are embedded at the core of innovative products and they underpin strategic value chains.
© Copyright Göran Roos 2013
What can you do with this?
© Copyright Göran Roos 2013
Energy Value with Mechanical Processing + Chemical Processing [Biodiesel]
Energy Value with mechanical Processing [Burning Wood]
Mass Value with Mechanical Processing + Chemical Processing [paper]
Mass Value with Mechanical Processing [timber]
Atomic Value with Mechanical Processing + Chemical Processing + Synthetic Biology Processing [Nanocellulose Materials]
Atomic Value with Mechanical Processing + Chemical Processing [Nanocellulose Composites]
Molecular Value with Mechanical Processing + Synthetic Biology Processing [3rd Generation Biorefineries e.g. High Value Raw Materials]
Molecular Value with Mechanical Processing + Biological Processing [2nd Generation Biorefineries e.g. Green Chemicals]
Molecular Value with Mechanical Processing + Chemical Processing [1st Generation Biorefineries e.g. Vanillin]
John Kettle, Göran Roos, Nafty Vanderhoek, Ali Harlin and Bruce Allender, 2012, Is the Australian Pulp and Paper Industry still at the crossroads?, APPITA Journal, In Press
INC
RE
AS
ING
CO
MP
LE
XIT
Y
Increasing
Value Added
© Copyright Göran Roos 2013
The objective of Design is to achieve behavioural change in the user which is: •Desirable from the users point of view [i.e. they are better of in their own opinion after the change] •Beneficial to the supplier •Positively impacting other stakeholders
Observation BrainstormingRapid
PrototypingRefining Implementation
Analysis Genesis Synthesis
Nyberg, M. and Lindström, M. (2005), “Muotoilun Taloudelliset Vaikutukset”, ETLA, Discussion papers No. 982, p. 20. © Copyright Göran Roos 2013
Art has numerous opportunities to add value to business. In consumer goods art can add to the perceived authenticity of the good and thereby increase its value in the eye of the consumer.
This is critical in the luxury goods end of the spectrum.
© Copyright Göran Roos 2013
Innovating in this space becomes a process, the aim of which is to generate, as a creator of an object, in the mind of the interpreter (consumer/customer) a specific set of emotions, intentions and thoughts as well as physical change.
Plutchik, R., 1962, The Emotions: Facts, Theories, and a New Model, New York: Random House © Copyright Göran Roos 2013
Effectiveness Improving Innovations
Business Model Based Innovations
Roos, G., “Integrated Innovation – The necessary route to profitability“, in B+I Strategy (ed.), Estrategia, Bilbao, Spain, December, 2011, pp. 51-58 © Copyright Göran Roos 2013
Maximising the value delivered from the stakeholder’s point of view
Value derived from the
deployment of the offering
Value derived from the
possession of the offering
Value derived from the
appreciation of the offering
Instrumental value
Intrinsic value
Extrinsic value
© Copyright Göran Roos 2013
To have the profit exceed the revenue stream from the primary offering
This is done by accessing multiple profit pools, some of which are created and controlled by the firm.
© Copyright Göran Roos 2013
Roos, G., 2013, The role of intellectual capital in Business Model Innovation – an empirical study , in Ordoñez de Pablos, P.,
Tennyson, R. D. and Zhao, J., eds., Intellectual Capital Strategy Management For Knowledge-Based Organizations, IGI Global.
Positioning of THIS business within the company’s strategy
Description of the Product-Service-System/Solutions offering
Value Proposition for each of the target customer segments, target consumer segments and other definitive stakeholders
Description how the target customer segments, target consumer segments and other definitive stakeholders capture value from the offering
What competitive advantage does the offering enable or contribute to within the target customer segments, target consumer segments and other definitive stakeholders
Value attribute, attribute preference and attribute performance for each of the target customer segments, target consumer segments and other definitive stakeholders
What requirements must be fulfilled by the target customer segments, target consumer segments and other definitive stakeholders in order to be able to benefit from the offering
Description of how the Product-Service-System/Solutions offering should be implemented at the target customer segments, target consumer segments and other definitive stakeholders to ensure the targeted benefits (value)
Place, role and strategy of THIS business in the business ecosystem of which it is part
Technology base of the Product-Service-System/Solutions offering
Design base of the Product-Service-System/Solutions offering
Art base of the Product-Service-System/Solutions offering
Counselling (Hermeneutic) base of the Product-Service-System/Solutions offering
Outgoing logistics and Distribution Channel choice for each of the target customer segments, target consumer segments and other definitive stakeholders
Incoming logistics and supply chain choice
Relationship width, depth and frequency for each of the target customer segments and other definitive stakeholders
Value Configuration (Value Chain, Value Shop, Value Network)
Resources, Competitive Advantage and Resource Deployment Structure (IC Navigator)
Cost structure
Revenue Models © Copyright Göran Roos 2013
© Copyright Göran Roos 2013
References and sources in main document © Copyright Göran Roos 2013
References and sources in main document © Copyright Göran Roos 2013
© Copyright Göran Roos 2013 References and sources in main document
References and sources in main document © Copyright Göran Roos 2013
Experienced
Entrepreneurial
Leadership with
Ambitious Goals
Depth
Decentralisation
Knowledgeable, Loyal
Low turn-over
Employees
Focus
Integrated
Innovation
Globalisation
Specific Closeness
to the customer
High Performance
High Quality
Product-Service-System
Offering
Risk reducing and Innovation driving partnerships with
research and expertise centres
Roos, G. and Burton, K., “Integrated Innovation driven by emerging technologies”, Adelaide Thinker in Residence 2011 Innovation Process: Underpinning Subject Matter Report, February 1st 2012, Department of the Premier and Cabinet, Adelaide, Australia © Copyright Göran Roos 2013
Dominate Global Segments Global market footprint + specialisation = market leadership
Stay away from large, price-driven volume markets
Compete through superior value not cost
Knowledge Domain Leadership Masters of (mostly incremental) innovation
Obsessed with leading edge knowledge (frequently technology)
Very strong, mostly domestic, knowledge development network [internal plus external]
Operational effectiveness Sophisticated production networks
Careful choice of outsourcing and offshoring [less then you think]
Close connection between R&D and Manufacturing [co-location]
Highly flexible work arrangements worldwide
Continuous improvement, 100% quality 100% of the time, >95% recyclability/reusability
© Copyright Göran Roos 2013
Stewardship/Custodian: Long-term survival and intergenerational transfer as key objective
Profit is an inevitable consequence of serving customers better than anyone else
Focus on long-term sustainability with key stakeholders: customers; employees; suppliers and community at large
Companies as communities: high degree of mutual trust and loyalty leading to an implicit life-long contract contributing to a high performance work place culture
Leadership through example: Domain knowledge
Passion for the business
Flat hierarchies and informal channels of communication Bottom-up management style
High degree of cross departmental cooperation
© Copyright Göran Roos 2013
Computerised information: Software and databases
R&D and other intellectual property products
Brand equity, firm specific human capital, organisational capital
Machinery and equipment
© Copyright Göran Roos 2013 Department of Industry, Innovation, Science, Research and Tertiary Education (DIISRTE), 2012, Australian Innovation System Report 2012, Commonwealth of Australia
2
2.2
2.4
2.6
2.8
3
3.2
3.4
3.6
3.8
4
Australian score
Global best performing country score
OperationsManagement
Performance Management
PeopleManagement
Extracted from slide No. 17 in Green, R., 2011, Future of manufacturing – management, innovation and productivity, Presentation, Australian Chambers Business Congress Gold Coast Convention Centre, June 1-3 2011 © Copyright Göran Roos 2013
17% Improvementequals
Effect of increased factor inputs on output Independent of sector, ownership type, profitability, past productivity growth, size
Source: Green et al. 2011 © Copyright Göran Roos 2013
My responsibility as an employer is to make you the employee more employable during your tenure with me
My responsibility as an employee is to make you the employer more successful during my tenure with you
We both want more firms that are more successful
We differ on how to distribute the economic profit and social good that results from a successful firm
© Copyright Göran Roos 2013