It is a truism that our economy has seen a shift in recent decades from manufacturing to services. However, the extent of this shift is perhaps often overstated.
Manufacturing has far from gone away and it remains a major driver of innovation, of exports, and of prosperity.
Services around manufacturing add value
However, if we include the services around manufacturing, that add so much value, this figure should perhaps be doubled.
Our strength of expertise in services can offer much to manufacturers who are prepared to think in more depth beyond their factory gates, for example, about:
- their customers
- the end users
- products’ failure modes
- what happens at the end of a product’s life
A greater emphasis on the service that is delivered by manufactured products can yield ideas for additional ways of retaining or adding value to the product and the system around it, including:
- ideas for product improvements
- alternative ways of earning revenues
- differentiation in the marketplace
These can deliver enhanced sustainability and brand value, and indeed new sources of revenues.
We’ve only tapped the tip of the iceberg of services
At a recent conference in Cambridge, I heard the scale of untapped opportunities described as akin to an iceberg, in other words:
the value that manufacturers can readily see is a mere fraction of the opportunities which exist beyond the obvious.
I remember becoming aware of this notion in connection with using the eco innovation compass, developed by Dow over ten years ago.
Circular economy is the future of manufacturing
My interest in this field really took off, however, with my engagement in the “circular economy” which offers manufacturers the promise of:
- reduced costs and risks
- additional revenues
- enhanced sustainability
- enhanced CSR
Innovate UK strongly support circular economy
By helping businesses access Innovate UK funding in this space, and through programmes such as REBus, I’ve become closer to a variety of businesses, big and small, and across a surprising variety of sectors, that are thinking about their business in a different way – bringing innovation into:
- the product development
- supply chain
- business model
Digitalisation is changing the face of manufacturing
There is now a whole new raft of innovation springing forth as a result of “digital” and the related technologies that fall under the umbrella of the term “Industry 4.0”. This includes:
- the internet of things,
- cloud-based data and communications,technologies such as additive manufacturing
Benefits for the customer include enhanced tailoring of product to the individual customer – “the market of one”.
KTN and Innovate UK have recognised the significance of these ideas and many competitions over recent years have explicitly picked on them.
Most recently the materials and manufacturing competition brief highlighted the opportunities for:
- diversification of product and service lines to serve new markets
- the development of novel services that open up new sources of revenue from manufacturing
Hear about adding value through services at Innovate 2016
To find out more, come and hear from businesses and academics, who have been doing great things in this space, at the dedicated
It will explore how advanced services, and the shift in thinking from product to service, might be part of what is being referred to as a “fourth industrial revolution”.
Confirmed speakers include:
- Professor Tim Baines of Aston University, who recently made a great podcast introducing the concept of servitization
- Ian Turner of Cool Curve who are developing the concept of domestic lighting as a service, which is being developed by a consortium that was assembled with the help of the Knowledge Transfer Network, and is being funded in part by Innovate UK.
Find out more
You might also be interested to check out these links and initiatives:
- The Manufacturer’s Servitization Thought Leadership Network is raising awareness of the opportunities with a particular focus on manufacturing SMEs. The STLN are holding their second conference on 18th October
- The Institute for Manufacturing at Cambridge University are running a conference on the shift to services, 23rd-24th November
- Cranfield University have been leading EPSRC-funded work on through-life engineering, which has resulted in a national strategy. They are also running a conference in November
You can follow me on Twitter: @BenPeace
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