19 January 2014

Service-intensive business model needed

The Government's Foresight study into the future of UK manufacturing sets out a challenging roadmap for the industry to 2050, but the critical question is who is doing the driving?

As a contributor to the report, my focus has been on the different business models needed in the industry, all of which will require bold leadership. For example, in future, basic production may be a very small part of the cycle in terms of revenue, jobs and competitive importance; customers won't necessarily want the trouble of owning equipment, but would rather just pay to be able to use it.

Production technology – underpinned and linked together by IT – will be much more responsive and flexible, meaning that products can be personalised and customised on demand. 'Intelligent' and 'incomplete' products will be able to adapt and evolve as the circumstances of their use dictate. The full cycle of manufacturing will take place in networks of smaller firms interacting intensively with each other and with customers.

Building cycles of re-use, re-manufacturing and repair into manufacturing will become a central rather than a marginal concern for manufacturers across many sectors. Manufacturing needs to shift to service-intensive business models in a circular economy rather than production-intensive business models in a linear, factory-to-landfill economy.

A key factor for successful delivery will be leaders at a number of levels within organisations capable of identifying opportunities, making radical decisions and managing fundamental change in terms of how operations work. This is where some of the biggest challenges lie, in running business models across multiple organisations and different types of partner.

Bold experiments are needed to establish prototypes for this new form of manufacturing and universities have a potentially important role to play in this. A useful first step would be the creation of 'business model catapults' – development centres to test out new models in specific local areas and used to develop new ways of creating value as well as new ways of organising.

Martin Spring, professor of operations management, Lancaster University Management School

Supporting Information

Lancaster University

This material is protected by MA Business copyright
See Terms and Conditions.
One-off usage is permitted but bulk copying is not.
For multiple copies contact the sales team.

Do you have any comments about this article?

Add your comments




Your comments/feedback may be edited prior to publishing. Not all entries will be published.
Please view our Terms and Conditions before leaving a comment.

Related Articles

npower axe 2,400

Npower will axe 2,400 staff, a fifth of its UK workforce, by 2018, the ...

Female engineer awards open

The Institution of Engineering and Technology (IET) has opened nominations for ...

BAE Systems appoints COO

BAE Systems has appointed Charles Woodburn to the newly-created role of chief ...

Tis the season to be jolly...

Are you about to receive a visit from the ghost of manufacturing yet to come? ...

Poll position

A hung parliament is the bookies’ favourite heading into next month’s general ...

Engineered for the North East

A fantastic new event – the Manufacturing & Engineering North East exhibition ...

Goplasticpallets.com sales

The appointment of Tom Lee (pictured) as project sales manager marks a period ...

Cameron interview

David Cameron tells us why his love for engineering is the real deal and how ...

Shop talk

Company doctor Adrian Girling on the right medicine for British manufacturing.

Stepping up to the Mark

Manufacturers say the job market is saturated with a generation of the ...