This research project examines the drivers, barriers, and performance outcomes of adopting industrial digital technologies (IDTs) in UK manufacturing firms. The findings outlined in the report and toolkit provide insights on the interventions that facilitate IDT adoption to enhance the performance of SME manufacturers exporting to international markets.
The project collected primary data from focus groups, interviews and a survey of 303 UK manufacturing SMEs currently exporting products. The outcomes from this primary research were used to develop an IDT adoption toolkit and decision-making model. This toolkit allows UK SME manufacturers to benchmark their level of IDT adoption against the industry standard, to identify which specific IDTs will have the greatest impact on improving their business performance across many indicators, and additionally can direct users to the digital solutions most relevant to their needs, thereby simplifying the process of IDT adoption.
Dr Hanh Pham, Dr Richard Hodgett and Prof Chee Yew Wong (University of Leeds). This work was supported by the UKRI Made Smarter Innovation Challenge and the Economic and Social Research Council via InterAct [Grant Reference ES/W007231/1].
For further discussions or to propose potential applications/collaborations, please contact Hanh Pham.
In today’s globalised business world, there is a growing need for ethical supply chain practices. Manufacturing companies are facing complex challenges in modern production, and the importance of transparency and accountability has never been greater.
In this article, leading InterAct funded researchers from the Institute for Manufacturing (IfM) at the University of Cambridge explore the potential of the industrial metaverse to help elevate ethical standards across supply chains. Examining the intersection of technology and ethics, the IfM team offers valuable insights into how manufacturers can navigate regulatory environments, build consumer trust, and promote positive social change.
In a world of globalised supply chains, manufacturing firms often lack awareness and control of their external operations, which can result in unintentional non-compliance with regulations. While forced labour generates $236 billion in illegal profits annually (International Labour Organization), European companies will soon have to show compliance with environmental and human rights standards within their supply chains.
In response to mounting concerns, Europe is poised to implement stringent measures to hold corporations accountable for their supply chain practices. The forthcoming ‘Corporate Sustainability Due Diligence Directive’ heralds a new era of corporate responsibility. Large companies must conduct comprehensive audits of their supply chains, identifying and rectifying instances of forced labour and environmental degradation. Compliance will hinge on demonstrating adherence of the supply chain ecosystem to human rights and environmental standards.
The regulatory landscape is not confined to Europe alone. The UK, through initiatives like the Modern Slavery Act of 2005, has committed to fostering transparency within supply chains to eradicate all forms of worker exploitation. Moreover, further legislative reforms are on the horizon, promising a paradigm shift in corporate accountability.
How high is the risk of being penalised for suppliers’ actions?
Currently, the lack of production transparency allows non-ethical manufacturers to cut corners, giving them a competitive cost advantage that appeals to consumers. Unfortunately, many of these consumers are unaware of the wider context and end up supporting production that causes serious harm to societies and the planet.
Manufacturers can’t wait for new regulations about environmental and human rights standards in the UK. They must lead the development of digital tools for their production environments that delve into the existing supply chain data. This will demonstrate that their products are made with minimal adverse impact.
To enable this, it is crucial to make the production processes more transparent. One possible way to achieve this transparency is by leveraging augmented reality technologies, which can interpret and explain the existing complex data along supply chain echelons and incentivise the creation of new data sources.
So, in light of these developments, how can manufacturers ensure compliance with the new regulations and help uphold human rights and environmental protection?
The industrial metaverse: the foundation for a more transparent supply chain?
The Metaverse is a term used to describe the merging of the physical and digital worlds. It was first introduced by Neal Stephenson in his novel Snow Crash and later popularised by Mark Zuckerberg with Meta, a social network in extended reality.
The Industrial Metaverse comprises a series of ‘snapshots of realities’ around the data on sourcing, production, and delivery of components of a manufactured product, which can be explored in augmented reality. By exploring the upstream supply chain of components leading to the product, manufacturers can identify risks and take corrective action to comply with upcoming regulations.
Deploying industrial metaverse technology in practice requires:
access to data sources;
software (e.g. Unity Engine);
augmented reality headsets (e.g. Microsoft Hololens, Meta).
Although 3D virtual productions might look complex and expensive, new AI techniques such as Gaussian splatting can significantly reduce the cost of reality reproduction: a ‘reality snapshot’ can now be created by anyone using a smartphone. This means, UK manufacturers can demand the video screening of the production environment from potential suppliers at the procurement stage. This is where lower-tier suppliers are incentivised to agree to increase transparency in exchange for eligibility to sell products and services. Decentralised databases can be used to store this information at the supply chain level. It is important to note that creating fake snapshots could lead to legal repercussions and regulatory requirements.
Case study: contrasting opaque and transparent chocolate supply chains
Agriculture is almost uniquely resistant to technological change because of the remoteness/lack of oversight/scale of sites, and it is an area desperately in need of innovation. Leading chocolate brands have long been criticised for neglecting ethical standards in cocoa procurement, and many of the brands can’t effectively enact change since the market behind wholesalers is not transparent. This situation creates a high risk potential for social injustice and modern slavery, i.e. when the wholesaler purchasing prices make cocoa sales below the point of profitability, and farmers are forced to take children out of school to work on the farm.
Industrial metaverse, established along such supply chains, can spur transparency and influence to change the status quo. As European consumers are the primary market for cocoa harvesting, they have the market power to improve conditions for farmers in West Africa. To end forced labour and enable children to access education, requires new tools that support the transparency of cocoa supply chains for consumers.
While labour and environmental abuses exist in many supply chains, shocking 60% of cocoa-growing households in Ghana’s upstream cocoa supply chain are estimated to use child labour. Ensuring manfuacturers and consumers have access to accurate information about these unethical practices is therefore an urgent issue. A famous example of good practice is the ‘Bean to bar’ Tracker, along with QR codes, barcodes, biological markers of specific farms and fermentation processing locations, all of which can link chocolate bars to their potential origin. By comparing the known land size of a farm and the claimed cocoa harvest from that land, we can identify if cocoa of unknown origin is blended into the batch. While such tools are currently being used internally for supply chain traceability, adding an Industrial Metaverse component can open up and showcase the evidence to consumers. Consumers will be able to witness vivid experiences demonstrating the potential impact of supporting the chosen brand. This can showcase the positive changes to society (e.g. freeing children labouring to get an education) or highlight negative practices (e.g. the realities of environmental damage or modern slavery). Such evidence can build a strong identification that by purchasing ethical brands, consumers will be supporting the continuity of ethical production practices and local communities’ upstream supply chains.
Transforming production practices in the industrial metaverse
The Industrial Metaverse will increasingly move from merely representing reality, to shaping it. By shifting demand to ethical products, manufacturers will be able to increase their production scale, reducing the cost per unit and creating a greater impetus towards sustainability.
Instead of waiting for new regulations about environmental and human rights standards to be implemented in the UK, manufacturers must lead the development of similar immersive experience prototypes to confirm the ethics of their production environments. Going beyond the food production case, electronics and automotive manufacturers can validate their production processes by establishing an industrial metaverse around their products and demanding ‘reality snapshot’ data from their supply chains. It will propagate the impact across supply chains towards reaching multiple firms worldwide and make production more transparent for consumers. Not only will that reduce risks of non-compliance with upcoming regulations, but it will also anchor consumer demand with positive societal changes along supply chains. By doing so, manufacturers can champion Sustainable Development Goal 12: “Responsible Consumption and Production”.
What practical steps should manufacturers take from this?
Audit internal cost structures and visibility of operations along supply chains. Instead of aggregating costs at the wholesale level, manufacturers must enquire about the work conditions, energy sources, and potential carbon dioxide emissions through supply chain tiers.
Collaborate with extended reality solution providers to prototype Industrial Metaverse around their products and reveal production ethics along supply chains.
Analyse the integrated data and leverage alternative ways to reduce ethical risks. Communication throughout the industrial sector will help address industrial concerns about data privacy and confidentiality, leading to the industrial standard.
The IfM is currently working on developing a metaverse pilot for highly regulated sectors like aerospace, automotive, and food. These industries have very strict regulations that limit transparency. The goal is to enable a more transparent supply chain, which would contribute to the adherence of human rights and environmental protection. If you would like to collaborate with the team, contact Dr. Nikolai Kazantsev – nk622@cam.ac.uk or IfM Engage.
Acknowledgement: This work was supported by the UKRI Made Smarter Innovation Challenge and the Economic and Social Research Council via InterAct [Grant Reference ES/W007231/1]. We thank Prof Letizia Mortara, Dr Michael Rogerson and Alice Mumford for their feedback on this article.
“Companies need to figure out now how to survive in the future by selling less.” That was the message Professor Janet Godsell conveyed to female supply chain executives at Supply Chain Superwomen. The event, organised by Supply Chain Media to mark International Women’s Day, proved to be a unique opportunity to share supply chain challenges and visualise future scenarios in an open atmosphere.
Female supply chain executives gathered from across Europe at a hotel at Schiphol Airport on 8 March to attend Supply Chain Superwomen. For many of the 45 participants, normally outnumbered by their male colleagues, the event proved to be an eye-opener as they suddenly realised how many women hold top positions in their field. Supply Chain Superwomen was an opportunity to support each other as role models and to encourage more women to run for top jobs.
Diversity leads to higher profitability
“We need to attract more women into supply chain,” said Martijn Lofvers, founder and chief trendwatcher of Supply Chain Media and chair of the event. “Not only do we have to enlarge the supply chain talent pool, we also know that diversity leads to higher profitability as it brings more insight, better decision-making and it drives innovation.”
According to a recent Gartner and Awesome report the percentage of women in the supply chain workforce in 2023 was 41%, compared with 35% in 2016. Just 34% of first line managers are female, falling further to 31% at senior management level and 26% at senior vice president level. “The percentage of women in supply chain is rising, but it’s not fast enough and requires more action by the talents themselves, their managers and HR managers. It is also imperative for the talents to have a supporting sponsor,’’ said Lofvers.
Building future scenarios
With the focus of the event on innovation, Professor Janet Godsell, dean of Loughborough Business School, UK, was invited to lead a workshop on building future scenarios to stimulate the delegates to think out of the box, to start a journey and to make a bolder first step.
“Women need to be brave in organizations to make disruption,” she said. “Since the industrial revolution we have pursued consumption-driven economic growth based not on what we need but on what we want. Now we recognize that this is destroying the planet, hampering social equity and widening the gap between rich and poor,’’ said Godsell.
Surviving with less sales
‘‘Today we are at a pivotal point and we need to make a fundamental change in the way we pursue growth in order to better balance the environmental, social and economic cost of growth. Looking to the future we have to consider the challenges, the trade-offs and the opportunities. Companies today have to work out how to survive in the future by selling less.”
With that in mind, the workshop based on backcasting, a visual approach to scenario-building by creating postcards, stimulated discussion, decision-making and most importantly drawings that depicted the future, in this case 2040. “Backcasting tries to shake people out of their current mind-set and to get them thinking differently about how a digitally-enabled supply chain can look,” explained Godsell.
Dragon’s Den
Earlier in the day three start-ups were invited to enter the Dragons’ Den and deliver their pitches: Lox Solution, which coordinates all carriers during the last-mile delivery, The Climate Choice, an intelligence platform that collects and audits data to enable scope 3 decarbonization, and Winddle, a supply chain collaborative platform to create ecosystems.
The delegates were invited to spend their money – poker chips in this case – on the start-up that had most potential to help them with their supply chain challenges. While all three were relevant, managing sustainability was the biggest issue for many. Consequently, the winner was Lara Obst of The Climate Choice.
The automotive sector holds a distinctive and pivotal position within the UK economy. Beyond its substantial contributions to national outputs, employment, and value addition, the sector embodies a catalyst for future growth, aligning with the levelling up agenda and propelling the Net Zero transition.
In 2022, automotive-related manufacturing injected £78 billion turnover and contributed £16 billion in value added to the UK economy. The sector’s impact extends to the employment of over 208,000 individuals directly in automotive manufacturing and a total of 800,000 across the broader sector. Noteworthy within this context is the diversity epitomized by more than 25 manufacturing brands, collectively producing over 70 distinct vehicle models, complemented by the presence of specialized small-volume manufacturers.
This intricate ecosystem is further supported by approximately 2,500 supply chain businesses, housing some of the world’s most skilled engineers.
This paper offers a comprehensive analysis of the UK’s electric vehicle (EV) industry within the framework of economic policy and global value chains. It delves into the intricate dynamics involving supply chains, industrial policy, and critical dependencies.
The UK’s automotive sector confronts multifaceted challenges stemming from technological advancements, socioeconomic transformations, and geopolitical intricacies, necessitating the formulation of agile and responsive economic policies. The UK’s departure from the EU, as stipulated in the Trade and Cooperation Agreement, amplifies the complexities, particularly in navigating non-tariff measures and rules of origin that exert influence on EV exports. Within a landscape marked by heightened global competition characterized by escalating industrial policies on a global scale, the urgency of nimble responses becomes evident.
This research was conducted by Professor Jun Du Professor, Reader Luciano Battista and Dr. Oleksandr Shepotylo (Aston Business School). This work was supported by the UKRI Made Smarter Innovation Challenge and the Economic and Social Research Council via InterAct [Grant Reference ES/W007231/1].
For further discussions or potential applications/collaborations, please contact Jun Du.
Ask anyone involved in supply chain management or logistics about the last five years and most will agree they have been tough. Brexit, Covid and the war in Ukraine have caused uncertainty on both the demand and supply side.
Such geopolitical uncertainty raises complex questions for supply chain managers, such as whether supply chains could be better prepared for shocks.
Professor Jan Godsell is the Co-director of InterAct and Dean of Loughborough Business School and Professor of Operations and Supply Chain Strategy. After a career in manufacturing and supply chains, including spells at ICI and Dyson, she moved into academia covering all aspects of supply chains. According to Jan, a common cause of supply chain breakdown is just a lack of joined up thinking between marketing and supply chain strategy.
“It doesn’t matter whether you know why a demand pattern has been caused,” she explains. “If there’s a peak in demand, there’s a peak. The data should show that you get seasonal peaks, and you can react. We know we’re going to get shocks. We won’t know the cause, but we can have a degree of preparedness knowing there will be shocks at some stage.”
Dynamic versus structural flexibility
Dynamic flexibility is possible within the current network design, while the other, structural flexibility, demands a rewiring of relationships between suppliers.
She says the first type should be enough to cope with everyday swings in demand and supply. “If things stay within standard parameters, the network needs the right buffers to deal with that variability. It is a matter of analysing and assessing how unpredictable demand might be and using maths to work out required buffers and what inventory to keep.”
Jan says exceptional events in recent years have seen both sorts of flexibility at play.
“Brexit forced the UK to be fairly well buffered, so when Covid hit it meant we had a lot of inventory for the things we normally need. What also happened was unexpected demand for things we don’t normally require, such as Personal Protective Equipment (PPE) and ventilators.
“That required structural flexibility, creating new networks to produce things at a volume not seen before. With Covid-19, it wasn’t just the UK requiring flexibility, it was the world. We had to repurpose assets in the global network to provide them. And we did a decent job, globally.”
Jan adds that structural weaknesses highlighted by recent events have been partly created by decisions taken over many years, in particular making supply chain decisions based on short-term financials and procurement rather than long-term planning.
Finance runs the supply chain game
Holding buffers or inventory in a supply chain can be expensive, and it’s often not clear who should bear that cost. This, says Jan, is partly why supply chains have not been as resilient as they could be.
“We’ve had a financially orientated view of supply chains, focused on a return on capital employed (ROCE) that enables payback as quickly as possible. That means when building a factory, we don’t factor in spare capacity. And if spare capacity means inventory, we try to maximise return and minimise inventory.”
For Jan this goes back to how we value organisations, and the role finance plays in corporate strategy. And we haven’t learned much from earlier shocks.
She points out that financially driven supply chains had an impact in the recession of the late 2000s. A lot of firms had sent manufacturing and other parts of their supply chains offshore, often to low-cost environments. But they had forgotten to factor in the cost of logistics, which became a problem when the oil price peaked.
“Suddenly, the price of logistics was higher than the price of production. That reminded people to take a ‘total landed cost’ perspective [when deciding on location],” she explains. “People were lazily using manufacturing cost as a proxy for total landed cost. Worse still, they’d started to use labour cost as a proxy for manufacturing cost.”
While current trends such as “nearshoring” and “reshoring” are ways to de-risk supply chains, Jan suggests if cost must be the key factor in a decision, total landed cost is the metric to use. But when deciding where to place operations, she suggests not letting procurement be the drivers. Instead, she says, long-term planning and collaboration across the supply chain will be more effective at delivering efficient, resilient supply chains.
Let the SCOR guide you
Prof Godsell highlights the Supply Chain Council’s Supply Chain Operations Reference model (SCOR). SCOR consists of five core processes:
Planning
Procurement
Manufacturing
Logistics
The returns process
Planning is the primary element. Too many supply chains, says Jan, focus on a lowest-cost approach with procurement as the primary driver.
She describes this as “lowest cost, at all cost” and says it results in all parties doing things for themselves cheaply as possible, minimising buffers, passing risk to others and leaving the whole chain more vulnerable.
“Planning should be the integrative glue that holds it together,” she says. “It should be the function that connects a supply chain. We see lots of exploitative procurement practices, expecting year-on-year cost downs, because procurement managers have been incentivized on margin.”
End-to-end supply chains?
Jan’s ideal is to build what she calls “end-to-end supply chain optimisation” between retailers, manufacturers and suppliers. This creates flow and aims to manage the supply chain in a fairer way for everyone.
Buffers must be in the right place at the right amount. And there’s a collective responsibility for holding them and we don’t do things like promotions that mess up flow. The cheapest supply chain is one with steady demand, because it means minimal buffers, because you’ve got predictability.
And such end-to-end supply chains are likely to be less carbon intensive. “There is an inextricable link between productivity, sustainability and resilience,” says Jan. “The same principles underpin all three. If we could manage an end-to-end supply chain, so that we have flow and minimised buffers, within the current network configuration, it is likely to have the lowest carbon footprint, because you’ve got nothing in it you don’t need.”
Digitalisation is key
Like much else in modern organisations, supply chain optimisation requires technology. “We can’t do this without digitalisation,” says Jan, adding this is nothing new for manufacturing. “When I worked at ICI, we had electronic process control, it was just hard wired. Now the internet provides connectivity that spans the supply chain.”
Digitalisation enables us to understand demand and supply more accurately and we have the analytics platforms and the computing power to do the analysis we need in minutes.
Rapid market changes call for demand-driven collaborations in manufacturing, which trigger supply chain evolution to more distributed supply structures.
This paper explores the system dynamics of the largest European aerospace manufacturer’s supply chain. The authors conceptualise a manufacturing ecosystem by observing the impacts of supplier development, digital platforms, smart contracting, and Industry 4.0 on demand-driven collaborations in time.
The research team offers further contributions to the literature on ecosystem strategy, particularly for regulated industries, by disclosing the role of demand-driven collaborations in supporting the ecosystems’ growth. This paper also provides manufacturing firms with an open-access tool to exemplify their ecosystem development and produce initial training datasets for AI/ML algorithms, supporting further analytics.
This research was conducted by Dr. Nikolai Kazantsev (IfM, University of Cambridge), Oleksii Petrovskyi (National University of Kyiv-Mohyla Academy), Professor Julian M. Müller (Seeburg Castle University, Austria and Erfurt University of Applied Sciences, Germany). This work was supported by the UKRI Made Smarter Innovation Challenge and the Economic and Social Research Council via InterAct [Grant Reference ES/W007231/1].
For further discussions or potential applications/collaborations, please contact Nikolai Kazantsev.
The term ‘ecosystem’ is derived from biology, capturing a system of entities interacting and depending on each other and reacting to outside challenges and requirements. Business ecosystems represent the intense relationships between interlinked multilateral, complementary actors or partners interacting for value creation (Adner, 2017; Hannah and Eisenhardt, 2018).
We define a manufacturing ecosystem as a subclass of business ecosystems where supply chain firms arrange demand-driven collaboration in all directions (e.g., with partners, buyers, and even customers), thus competing with large Tier-1 firms for direct manufacturing orders, gaining these orders, fulfilling them and capturing profits. This changes the topology of a hierarchical supply chain into a distributed manufacturing ecosystem, where Tier-1s do not arrange subcontracting of the awarded orders.
In the conventional supply chains, Small- and medium-sized enterprises (SMEs) represent most suppliers worldwide, accounting for 70% of jobs and generating up to 60% of value added (OECD, 2017). For example, the aerospace supply chain starts with the OEM, which places orders in a ‘Calls for Tenders’ (CfTs), organizes tendering processes (often leading to Tier-1s) and awards orders to the team that best matches the requirements. In this industry, SMEs can potentially provide components and services at multiple supply chain levels, but they often miss the scale, scope, standardization or technologies to play a more active role in tendering (Müller et al., 2018). Also, SMEs have reduced ability to act as suppliers due to powerful Tier-1 companies (Schirrmann & Drat, 2018).
However, what if demand-driven collaborations between SMEs are supported?
We simulate the application of Industry 4.0, Digital platforms, Smart contracts, and Supplier development programs (Kazantsev et al., 2022) and explore the growth of the manufacturing ecosystem from a conventional supply chain. We used system dynamics to simulate these changes and provide insights for manufacturing firms and policymakers about the desired level of support (Sterman, 2000; Akkermans and Wasserhove, 2018).
An interactive dashboard has been developed that allows the testing of ecosystem development:
1. Supplier development and digital platforms make marketplaces more transparent so that SMEs can see more calls for tenders
Supplier development programmes and digital platforms are needed to help SMEs identify more calls for tenders and potential partners for collaboration.
2. The collaboration experience and smart contracts reduce uncertainty levels and enable SMEs to submit more collaborative tenders
Participating in tendering would also enable SMEs to learn how to fulfil orders; therefore, allowing some quotas is helpful. The more firms collaborate on tenders, the lower the level of uncertainty in the market. New technologies, such as smart contracting, indirectly increase the number of submitted tenders and further support the development of a trustworthy business environment.
3. Technological support for contracting and coordination reduces the order execution queue and supports the growth of a manufacturing ecosystem
Insufficient contracting and coordination reduces order fulfilment efficiency and calls for digitalization (Kazantsev et al., 2023). Adopting smart contracting and Industry 4.0 increases the ability of SME collaboration to execute the awarded orders in time. Specifically, if we double investments into smart contracting and Industry 4.0 every year, the number of delayed orders grows until the 5th year but then starts falling. In the 6th year, 48 calls for tenders will be available (with a 15 % quota), seven orders out of which will be fulfilled the same year, and six orders from the previous year’s queue. In this case, the order execution rate reaches a plateau – executing all awarded orders. Year 5 is a breakeven point when order execution rate, delayed, and executed orders intersect.
Study implications
Demand-driven collaborations play a critical role in unfolding manufacturing ecosystems. In the early stages of such transitions, investments in collaboration enablers are critical to support ecosystem growth. Thus, we recommend:
investing in supplier development and digital platforms as early as possible
enabling quotas for SMEs in tendering
increasing digitalization of contracting and coordination to support the efficiency of demand-driven collaborations
Adner, R. (2017). Ecosystem as Structure. Journal of management, 43(1), 39-58.
Akkermans, H., & Van Wassenhove, L. (2018). A dynamic model of managerial response to grey swan events in supply networks. International Journal of Production Research, 56(1-2), 10-21.
Hannah, D. P., & Eisenhardt, K. M. (2018). How firms navigate cooperation and competition in nascent ecosystems. Strategic management journal, 39(12), 3163-3192.
Kazantsev, N., Petrovskyi, O., & Müller, J. M. (2023). From supply chains towards manufacturing ecosystems: A system dynamics model. Technological Forecasting and Social Change, 197, 122917.
Kazantsev, N. (2022). Supporting SME Collaborations in Low-Volume High-Variability Manufacturing. United Kingdom:The University of Manchester.
Kazantsev, N., Pishchulov, G., Mehandjiev, N., Sampaio, P., & Zolkiewski, J. (2022). Investigating barriers to demand-driven SME collaboration in low-volume high-variability manufacturing. Supply Chain Management: An International Journal, 27(2), 265-282.
Kazantsev N., DeBellis, M., Quboa Q., Sampaio P., Mehandjiev N., & Stalker I. (2023). An ontology-guided approach to process formation and coordination of demand-driven collaborations, International Journal of Production Research, DOI: 10.1080/00207543.2023.2242508
Müller, J. M., Buliga, O., & Voigt, K.-I. (2018). Fortune favors the prepared: How SMEs approach business model innovations in Industry 4.0. Technological Forecasting and Social Change, 132, 2-17.
OECD. (2017). Enhancing the contributions of SMEs in a global and digitalized economy.
Schmidt, M. C., Veile, J. W., Müller, J. M., & Voigt, K. I. (2023). Industry 4.0 implementation in the supply chain: a review on the evolution of buyer-supplier relationships. International Journal of Production Research, 61(17), 6063-6080.Sterman. (2000). Business Dynamics: Systems Thinking and Modeling for a Complex World McGraw Hill.
As we embark on the next stage of our industrial evolution, digitalisation will shape the future of our economy, manufacturing ecosystem, and workplace. Digital technologies can enable us to create the future we want and move beyond consumption driven economic growth.
Our challenge is to create a digital manufacturing future that meets our net-zero ambitions, whilst being resilient and productive. Thus, ensuring that everyone has the things that they need, at a price that they can afford, without damaging the environment or society.
To create the digital manufacturing future we want, we first need to know how that can be achieved, we need to explore the possible and work together to realise these goals. In order to combine our expertise from the broadest range of perspectives around this common goal, we need to InterAct.
How did the InterAct conference benefit attendees?
Gaining actionable human insights into the future manufacturing environment.
Networking and building relationships with cross-sector experts interested in creating a positive, forward-thinking vision for UK industry.
Building narrative development skills to enhance the reach of messaging in the digital environment.
The opportunity to take part in a collaborative workshop on the theme ‘How do we create the digital manufacturing futures we want to see, together’.
Engagement with a panel of highly regarded speakers from the world of manufacturing, policy, and academia during an interactive Q&A session.
Speakers
We were delighted to welcome a roster of world-leading speakers, who shared unique insights and perspectives on their areas of expertise in relation to the theme of ‘Creating the digital manufacturing future we want’.
Our speakers were drawn from a wide range of backgrounds across industry, policy, think-tanks, and academia. Together they represent a diverse collection of voices that we want to draw into the wider conversation about what it will take to build a future that delivers for everyone.
Peter is the CEO of the CIPD, the professional body for HR and People Development. Since January 2019, he has been co-chair of The Flexible Working Task Force, a partnership across government departments, business groups, trade unions and charities, to increase the uptake of flexible working. He is also Chair of Engage for Success and the What Works Centre for Wellbeing.
Peter writes and speaks widely on the development of HR, the future of work, and the key issues of leadership, culture and organisation, people and skills. In 2021, his second book ‘The New World of Work’ was published, exploring the many factors shaping work, workplaces, workforces and our working lives, and the principles around which we can build a future that is good for people, for business and for societies.
Prior to joining the CIPD in 2012 Peter was Chair of the Institute of Leadership and Management, an Executive Fellow at London Business School, and held a number of Board level roles. He had a long career in consulting at Accenture working with organisations around the world, and in his last seven years there was Global Managing Director for the firm’s human capital and organisation consulting practice.
Ben Armstrong is the executive director and a research scientist at MIT’s Industrial Performance Center, where he co-leads the Work of the Future initiative. His research and teaching examine how workers, firms, and regions adapt to technological change. His current projects include a working group on generative AI and its impact on work, as well as a book on American manufacturing competitiveness. He received his PhD from MIT and formerly worked at Google Inc.
David is Chief Economist EMEA at JLL, one of the world’s largest commercial real estate services companies. At JLL, David advises the firm’s leadership and its clients on how the economy is evolving and the impact it will have on real estate. Prior to JLL, David spent six years as Chief Economist at Jaguar Land Rover and also led the company’s work to prepare for Brexit. He has previously held other economist positions at Capital Economics, RBS, and the Bank of Sierra Leone.
Professor Vania Sena
Speaker – Future of the Economy
InterAct Network – Future of the Economy: Principal Investigator Chair in Entrepreneurship and Enterprise – University of Sheffield
Professor Sena’s first degree was awarded with laude by the University of Naples, Federico II, Naples, Italy; her postgraduate studies in Economics were carried out at the University of York, UK, where she was awarded both the MSc and the DPhil in Economics.
Her research focuses mainly on productivity growth, both at the micro and macro level with an emphasis on innovation, human capital and intellectual property. Her most recent research looks at the relationship among innovation activities,trade secrets and total factor productivity. She is a member of the Operational Society General Council and Board. She has been a visiting fellow at Harvard University, MA and at Rutgers University, NJ.
Vania is leading the InterAct workstream ‘The Future of the Economy’, which is examining the impact that the uptake of industrial digital technology in manufacturing will have on the wider economy and the implications of of this.
Dr Adrienne Houston is Company Director at Eurovacuum Products Ltd. She is a Mechanical Engineering specialising in high vacuum and low pressure compressor systems and vacuum evaporator for the biogas, chemical and pharmaceutical industries.
To complement her professional work, Adrienne is a keen promoter and champion of women in engineering, diversity and inclusion. In 2019 she was appointed by the Royal Academy of Engineering for the role of Diversity and Inclusion Visiting Professor at the University of Birmingham. She is a board member at the Research, Information and Knowledge committee at the Engineering Professors Council and Honorary Visiting Design Professor at the School of Engineering, University of Leicester.
Professor Jillian MacBryde
Speaker – Future of Work
InterAct Network Co-director Professor of Innovation and Operations Management – University of Strathclyde
Jill MacBryde is Professor of Innovation and Operations Management at Strathclyde University where she is also Director of the Hunter Centre for Entrepreneurship. Jill is Co-Director of the ESRC Made Smarter Network Plus, InterAct network, which aims to bring insights from the social sciences to support the innovation and diffusion of digital technologies that will result in a stronger, more resilient, manufacturing base.
The theme throughout Jill’s work is operations management in changing environments and her current research projects include productivity in manufacturing, the impact of Covid on UK manufacturing, and the future of manufacturing work. Jill also works with policy makers and the public sector. She is currently a member of the Innovate UK/ESRC Innovation Caucus and a member of the Innovate UK Future Flight Advisory Board.
Matt Tootle
Speaker – Future of Digital Manufacturing Ecosystems
Matt is an energetic and passionate leader who joined Aerogility with over 16 years’ experience in defence aerospace, primarily within support engineering and manufacturing. Matt’s specialisms include capturing and shaping complex customer requirements, designing and developing deliverable solutions and translating technical problems to non-technical individuals. Matt has extensive experience working with international customers and colleagues to deliver value to their operations. Matt’s current role sees him working across a variety of sectors to deliver innovative, model-based AI solutions to enable customers to better operate, sustain and optimise platforms, services and infrastructure.
Sue Williams
Speaker – Future of Digital Manufacturing Ecosystems
Sue Williams is a strategic and focused Supply Chain Director with over 25 years’ experience in multiple industries including automotive, aerospace, defence and FMEG as well as aftermarket and aftercare support. Sue’s specialisms include supply chain design and modelling, inventory planning, demand management, S&OP and supply planning. Sue has worked with organisations such as Jaguar Land Rover, Dyson, GKN and Meggitt among others, to deliver sustainable, high value change to their supply chains. Sue was also the Head of Supply Chain for the Vaccine Taskforce, responsible for supply chain risk and resilience and the inbound modelling and planning for the vaccine supply.
Martin Bach
Speaker – Future of Digital Manufacturing Ecosystems
Martin Bach’s background is in process engineering and manufacturing management. He has extensive business management experience in the UK, Europe and the US, running a wide range of businesses in the automotive and industrial sectors. Most recently he was Managing Director of Cooksongold, the UK’s leading supplier of jewellery making materials and products.
Professor Janet Godsell
Speaker – Future of Digital Manufacturing Ecosystems
Jan Godsell is Dean of Loughborough Business School and Professor of Operations and Supply Chain Strategy at Loughborough University. Her work focuses on the pursuit of more responsible consumption and production through the alignment of product, marketing, and supply chain strategy with consumer needs. Jan’s work focuses on the design of end-to-end supply chains to enable, responsibility, sustainability, resilience and productivity.
Jan is the workstream lead for ‘The Future of Digital Manufacturing Ecosystems’. This will examine how to develop more sustainable manufacturing business models, supply chains, and the role of innovative digital technologies (IDTs) in facilitating this shift.
Ved is passionate about the impact of technology on business, culture, and society. He enjoys speaking and writing about technology and the future. He writes a weekly innovation newsletter, and is a regular speaker at industry forums. He has been a guest lecturer at the HSE Ireland Masters in Digital Healthcare Programme in Dublin for the past 3 years, and a regular speaker on AI and future systems.
Ved works as the Head of Business Innovation for Tata Consultancy Services UK. His primary focus is to help drive future thinking conversations with clients in solving tomorrow’s problems. He has been working with and advising senior clients across retail, travel, education, healthcare, financial services, public sector, and other businesses. Ved runs an innovation team in London and is leading the design and set up of Pace Port London. Currently his work spans areas such as reinventing social care for the elderly, connected homes and environments, and urban mobility, Generative AI, and more. Over the past 20+ years, Ved has been working on emerging technologies, and their adoption into organisations. An avid writer and regular speaker, Ved’s book “Doing Digital” was released in January 2023, and he writes a regular innovation newsletter.
Fhaheen Khan is a Senior Economist at Make UK, the manufactures organisation. His role primarily focusses on monitoring and evaluating the economic performance of manufacturers, which is published in a quarterly outlook report. In addition, Fhaheen’s role covers a myriad of topics relevant to manufacturing to advise Government bodies to develop policy with a focus on tax, investment and the business environment and is a regular commentator on public statistics.
Ben is the Deputy Director of the Innovate UK-led £300 million Made Smarter Innovation Challenge; a collaboration between UK government and industry designed to support the development and novel application of industrial digital technologies.
Prior to this, Ben held positions at HiETA Technologies, Airbus Group, University of Bath and Cobham. He is also founder of Added Lightness, a technology strategy consulting business, and Atherton Bikes, which brings together multiple-world champion and world cup winning athletes with the latest composite and additive manufacturing technologies.
Ben holds a degree in Materials Science and Engineering and an MBA from the University of Bath, a PhD in Materials Science and Metallurgy from the University of Cambridge and is a Chartered Engineer.
Disruption, digital innovation, new business models… the world of manufacturing is changing rapidly, perhaps faster than ever before. To adapt and survive, businesses must anticipate changes, identify opportunities and make informed decisions.
So, how can you be ready for the changes that lie ahead? How can you pivot to be equally productive and sustainable, delivering progress with purpose?
The InterAct Future of Digital Manufacturing Ecosystems research team has put together a vital report that brings you the information you need, at your fingertips, outlining potential future scenarios and the associated opportunities for the manufacturing world.
Future of Digital Marketing Ecosystems – 2040 Scenarios
These scenarios map out four potential alternatives for the digital manufacturers of tomorrow, including:
Productivity Powerhouse
Flexibility as Standard
Sustainability Champion
Happy and Sustainable Workforce
Download the report to find out more about how the most useful measure of sustainable progress is total factor productivity, which accounts for inputs beyond labour – such as materials, energy and administrative time – to compare them against total outputs. You will also learn how these inputs can be measured against one another, and how businesses can begin working towards achieving them.
As the report shows, by considering the human factors behind digitalisation today, you’ll be much better placed to build true resilience into your business tomorrow.
This research was conducted by Dr. Wanrong Zhang, Professor Janet Godsell and Dr. Kamran Chatha (Loughborough University). This work was supported by the UKRI Made Smarter Innovation Challenge and the Economic and Social Research Council via InterAct [Grant Reference ES/W007231/1].
For further discussions or potential applications/collaborations, please contact Jan Godsell.
There are terms we hear constantly in the agriculture and food sectors right now – industry 4.0, smart processes, robotic automation, Internet of Things (IoT) and Artificial Intelligence (AI) are all common buzzwords. However, while understanding the benefits of these formative ideas is relatively straightforward, putting them into practice relies on the collection, utilisation and analysis of data – data that needs to be digitally available to make this possible.
Adopting solutions that drive forward these tech advancements offers great potential in leveraging growth and productivity, but there is one sticking point. The UK agri-food industry is notoriously slow in adopting new technologies.
Of course, extraordinary events such as the Covid-19 pandemic, have accelerated the adoption of some digital technologies out of necessity, but the overall feeling has traditionally been one of reluctance, with various contributory factors including cost, resource, and general attitudes.
How to convince the sector to embrace change
There are three pillars that need to be considered to provide agri-food businesses with the confidence to adopt technology: provision, people, and practicality. These will in turn enable businesses to access the benefits that digitisation and data connectedness will bring. Let’s break them down one at a time.
Provision
It’s not that technologies haven’t been developed and tested – they have. It’s that less attention has been paid to actually provisioning tech specifically for the agri-food industry. Often technologies that make their way into the agri-food sector have been developed with a use case or other industry in mind. Only after this is the potential for it to be applied within agri-food production and/or manufacturing recognised.
Look at blockchain – its origins are in fintech, designed to trade digital currency bitcoin without the need for a trusted authority such as a bank. But repurpose this technology into the agri-food space, where it was pivoted to be an emerging technology to disincentivise and prevent fraud, and it’s clear it isn’t completely fit for purpose in its legacy form.
Why? Because the decentralised nature of blockchain means that using a typical payment model based on the number of transactions, where there are many transactions, is just not possible in a high volume/low margin sector like agri-food. So, in reality it, is just too costly to roll out. An obvious takeaway here is that if technologies are to be adapted and provisioned with the agri-food sector in mind, then it is vital that the technology providers have an in-depth knowledge of the agri-food sector.
People
It isn’t just provisioning where technology adoption currently falters. We need to shine a spotlight on how we get people to buy in. The breakdown here might not be where you think. While the benefit technology can bring to businesses is often understood on a macro level within the food industry, particularly by those in thought leadership positions, it is the onboarding of this technology’s main users that has proved more difficult.
This is not generally due to the people, but because of the change it involves. The benefits of this new way of working are not always immediately or overtly obvious to users. In fact, as a technology provider, I am often met with statements of resistance, such as: “because this is the way it has always been done”. However, this struggle to accept new technologies is often associated with a fear of change and being replaced by machines. That’s why it is so important that technology providers acknowledge these concerns and take them into consideration, reassuring users of the benefits during implementation.
Practicality
Addressing the practical aspects of a digital way of working within agri-food is the final part of making technology adoption more accessible. The responsibility here lies with the tech providers.
The processes, changes, and practical steps required to implement a new tech into a business are often confused and even misunderstood, even by the technology companies themselves.
In general, the agri-food sector operates on a high-volume low-margin model, meaning that processes are tightly refined and controlled. The industry has worked hard over the last 20+ years to bring about operational efficiencies through automation, so that cost savings or profitability can be achieved.
During this period there has been less of a focus on digitising data and the value it could bring through actionable insights. When disruptive technologies enter this process, they need to do so with ease and not impact operations or processes. In addition, they need to add value rather than create costs for businesses. Furthermore, these technologies need to be able to cope with the intricacies and nuances that exist in the production and manufacturing environments. Put simply, sometimes technology will not be plug and play – especially in its infancy.
The outcome here is that the inherent benefits of digitisation are not immediately obvious, as they would be with operation efficiency gains. It is critical that technology providers take the time to understand the specific business where they are attempting to implement technologies and provide solutions that will support and enhance the business.
The sector, the business & the people
Ultimately, an understanding of the many aspects of the agri-food sector is critical for technology providers. Without a clear view of not just the supplier-customer relationships and their dynamics, but also the supply chain, with its global complexity and fragmented nature, and the many actors involved in the supply chain, there are sure to be issues. A grasp of all these issues assures an appreciation of the intricacies involved in technology adoption in this sector. It also ensures that technology providers can recognise any stumbling blocks ahead, while partnership with customers enables the provision of technology that is fit for purpose.
As a technology provider, Foods Connected works specifically on implementing digital solutions with Food Business Operators. The implementation of these solutions in various environments requires knowledge and understanding of how each business operates, accompanied by knowledge about the wider complexities of the sector in general. That’s why our teams have all worked in the industry and understand the intricacies of each step of the supply chain process. Our people are experts – and that’s what we need to take technology adoption forward in the agri-food industry.
After all, technology adoption and implementation are inherently coupled with people – and one cannot exist without the other.
Want to learn more about digitalisation in the agri-food industry? Watch our recorded InterAct x Foods Connected webinar: Overcoming barriers to digitalisation: adding value in the agri-food sector
Stephanie is a Senior Implementation Manager at Foods Connected. With 11 years’ experience in academia, food manufacturing and food-tech and an undergraduate degree in Food Science and a PhD in Food Supply Chain Management, Stephanie has spent her career working in food manufacturing environments in a R&D capacity, as well as working on and managing several multi million pound research projects while working for Queen’s University Belfast. Stephanie has worked with Foods Connected for the last 2.5 years, implementing, managing and delivering successful digital transformation projects within the food industry.
