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.
Watch a short animated explainer about developing business cases for digitalisation
The competitiveness of industry in the UK is dependent on the rapidly growing digitalisation of manufacturers. Digitalisation provides the opportunity to drive the efficiency and innovativeness of manufacturers, and forms the basis for creating new business models. Yet, manufacturers are lagging in their investments into digitalisation and risk missing out on capturing the opportunities digitalisation offers. The below report, guide and video outline the specific challenges the manufacturing industry faces when making effective investments into digitalisation and identifies the key questions they should address to overcome them.
This research was conducted by Dr. Andreas Schroeder, Dr. Yang Zhao and Dr. Daniel Andrews (Aston 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 Andreas Schroeder.
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.
With the enactment of the new EU Battery Regulations, organisations are required to embrace Battery Passports and Smart Labelling, enabling transparency and sustainability in battery production and consumption. Recent research from InterAct funded researchers, however, highlights critical gaps in awareness, information availability, and operational readiness faced by UK organisations in aligning with these legislative changes.
A representative survey was conducted to gauge the awareness and preparedness of 80 organisations in regard to the new EU Battery Regulations. An Industry-Academic round table discussion and follow-up interviews were then held to reflect on the implications for industry. The results can be downloaded in the two reports below.
This research was conducted by Dr. Melanie King and Paul Timms (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 Melanie King.
On Thursday 8th June, InterAct Co-director, Professor Janet Godsell delivered a talk on the progress of the Future of Digital Manufacturing Ecosystems workstream to an audience at the Smart Factory Expo in the NEC, Birmingham.
In her talk, Professor Godsell addressed the need for self-sufficiency in critical production, lessons from the manufacturing past and the work of the Future of Digital Manufacturing Ecosystems team on analysing scenarios for the future.
Has the impact of the global pandemic and spiralling household living costs changed what people in the UK value in jobs? If so, what factors are important for people looking at jobs in 2023 and what are the implications of this for UK manufacturers?
As part of the recent InterAct Making Things Work Survey , we asked people what things they would look for in a new job. We found that the top five reasons are an interesting mix of the usual economic and non-economic (i.e. the quality of work settings) suspects. Our top 5 job choice factors are: pay and benefits; well-being and flexibility; clean and safe work settings; contractual security and stability; and having an employer who listens and values people’s opinions (voice).
The prominence of these five job quality factors is probably not surprising. Apart from the legion of Health & Safety sceptics on social media, what manufacturing workforce wouldn’t prioritize a safe and clean working environment? What is surprising is that both pay and wellbeing are rated equally highly by our sample because in survey questions of this type, pay is usually out on its own as the main reason for job choice. This makes perfect sense for those of us who don’t live to work, or who aren’t strongly morally and vocationally wedded to our labour or employer. The importance of pay and reward and these other job quality factors should never be understated: especially in competitive labour markets with shortages of people and skills.
All of these top five factors play very nicely into wider debates about job quality and what we mean by ‘good jobs’. For manufacturers, understanding what people value in jobs and tailoring the recruitment messaging towards this should keep you up and running with the talent war pack. Good jobs are essential for successful recruitment and retention. As every decent manufacturing employer knows, if people’s working needs are being supported, the better the chances are that you’ll get the talent you need for the business, be more able to keep your ‘key’ people and get performance and productivity benefits over the longer term: ‘happy people, happy customers, better productivity.
In our sample, there wasn’t too much statistical distance between the top five factors. The relative prominence of wellbeing is interesting. Although wellbeing always been a central topic in conversations about job quality, the pandemic shone a unique spotlight on health at work. Wellbeing issues have come a long way from the days when it was mainly about masking or softly managing people’s problems, or just tackled by asking people to try whistling a happy tune.
Part of our new normal seems to be having a reset on long hours culture and achieving more work-life balance. The pandemic also showed us that discussing different ways of working was not only possible but operationally practical (especially non-production staff) in manufacturing businesses, though this remains a work in progress for production staff. Take a brief look across many manufacturers’ websites today and you’ll see that most companies do explain how they support people’s wellbeing.
We know about job quality, but what are people’s perceptions about what manufacturing jobs offer? We are only at a very early stage of survey analysis and getting under the skin of the topline figures, however we can examine pay as an example.
Unfortunately, for UK manufacturers, the great British public are telling a familiar tale. The good news is that most people think that manufacturing jobs offer comparable levels of pay and benefits to those in other industries. The less great news, however, is that there are just as many who are sceptical or unsure about relative pay rates in the sector.
These figures look consistent with what we know from the past about public perceptions of manufacturing jobs in the UK and the US: that while the sector objectively pays people comparable or higher than average levels of pay, this reality doesn’t carry through into public opinion . In other words, there still seems to be a reasonable gap between what most people would want in a job and what most people think is on offer in manufacturing. This latter point also seems to hold true across all of the top five job quality factors that we outlined at the start.
Therefore, an early message from our survey may be that many people are largely uncertain about the quality manufacturers are offering in terms of jobs: a persistent perception that will influence the attractiveness of jobs in the sector. Going forward it may require more focused attention from employers, industry shakers and policy makers if they want to remake the image of jobs in the sector.
The UK was at the heart of the first industrial revolution. Powered by coal, the UK was able to move from craft to mass production, creating new jobs, increased wages, and improved standards of living. Consumption driven economic growth was fuelled by huge increases in productivity. Key to the UK’s success, was its global access to raw materials, its local access to energy (coal), and innovation to develop the technology to enable the shift to mass production.
Little thought was given to the broader environmental and social considerations, with cities engulfed in smog, and children working in factories. Over time, these issues were addressed but the long-term impact is only beginning to be fully realised.
We are now in the era of Industry 4.0, or the 4th industrial revolution. Initially a name for the German Government’s strategy, to reinvigorate German manufacturing post-2008 global economic crisis, the term has gained widespread popular appeal. At its core was the adoption of digital technologies to create the Internet of Things (IoT). Over the last decade, with increased awareness of the environmental and societal impacts of consumption driven economic growth, it signifies a more fundamental shift.
There is increasing recognition of the need to decarbonise the manufacturing ecosystem if the UK is to meet its Net Zero 2050 goals. This is driving the adoption of low carbon energy sources, and more resource efficient methods of production. It is also creating a more fundamental change. United Nations Sustainable Development Goal (SDG) 12, identifies the need for more responsible consumption and production.
There is a pressing need to consider new models for economic and business development that decouple consumption from production. Business models have traditionally been built on ‘linear economy’ models where raw materials are mined, converted into components, assembled into products, that are used, and sent for recycling, energy recovery and land fill at end of life. As consumers have valued newness over utility, and manufacturers have sought to make products as cheaply as possible, the ability to reuse, repair and remanufacture products has become more difficult.
The future manufacturing ecosystem is built on the principles of a ‘circular economy’. An economy where we seek to keep products in their highest possible value state, through reuse, repair and remanufacture. A future where recycling is a last resort. Digital technologies enable the more effective monitoring of the physical location of assets, their condition and usage. They can also enable digital payment, and technical support.
Innovation is key to supporting the transition to a more circular economy. It starts with the innovation required to develop the new digital technologies to enable the transition. Innovation may be more transformational and involve the development of new business models. HP Instant Ink is a great example of how IoT technology in home printers enables the provision of home printing as a service.
For a fixed rate, subscribers can print an agreed number of pages per month with a guarantee that they will never run out of ink. The ink levels are remotely monitored, and new cartridges sent in the post when required. Used cartridges are returned to be refilled and reused. These new business models are often run in parallel with existing business models (e.g., traditional purchase of ink cartridges) that may use innovation to improve the productivity and sustainability of existing manufacturing processes or supply chains.
At the heart of the UK manufacturing ecosystem, the Midlands can lead the UK in creating the first regional manufacturing ecosystem, that is low carbon and supports the principles of the circular economy. Using innovation to create new business models, products, services, and technologies that enable economic prosperity in a responsible and sustainable way. Through the Made Smarter Innovation (MSI) funded Interact Project, Loughborough University are working with key stakeholders in the region to develop a 2040 Future Digital Manufacturing Ecosystem roadmap for the Midlands. Be part of the change, reach out and start to Interact.
Digitalisation offers significant opportunities for manufacturers. By leveraging digital technologies and data, manufacturers can generate substantial efficiency gains in their own processes, create new forms of value for their customers, and develop innovative business models. These digitalisation opportunities are critical to address the productivity and sustainability demands the manufacturing industry is facing.
Although the range of opportunities digitalisation offers to the manufacturing industry is widely recognized it is of concern that only 35% of surveyed firms have adopted digitalisation solutions at scale[1]. One of the root causes of the lack of adoption in the UK is the lack of investment[2]. According to the Manufacturing Digital Productivity Report from iBASEt[3], 94% of UK manufacturers believe their industry has already fallen behind the US because of a lack of investment into digitalisation, and more than half of UK manufacturers are losing sales as a result. It is even more worrying that 93% of respondents expect that this lack of investment into digitalisation will lead to many UK manufacturers going out of business in the next decade.
To help manufacturers invest effectively in digitalisation, it is important to understand the range of challenges manufacturers commonly face. Only then can the appropriate solutions be identified and put in place. Aston University used a systematic review method to study the challenges for manufacturers and identify critical questions. The results are summarised in Table 1 and discussed below.
Digitalisation goals
The lack of agreement on the goals of digitalisation encumbers the investment process.
The lack of ambitions in the goals of digitalisation limits the leaders’ ability to justify significant investments.
Investment process
Digitalisation integrates a wide scope of investment domains which makes it difficult to apply established processes to assess and prioritise investments.
The metrics used to evaluate business cases for investment do not relate to the opportunities that are particular to digitalisation.
Digital technology attributes
The high cost of digitalisation and the high uncertainty of return make it difficult to justify investments.
The rapid innovation (and obsolescence) of digital technology acts as a discouragement to making substantial investments.
People and their expertise
The lack of expertise on acquiring external funding for digitalisation creates an investment barrier.
The lack of senior leaders with digitalisation expertise hampers investments into digitalisation.
Organisational culture
The difficulty of accepting investment uncertainties inhibits investments into digitalisation.
The lack of openness and trust creates barriers to making effective investments into digitalisation.
Business network
The lack of digital readiness of the wider network limits investments into digitalisation.
The lack of experienced or relevant finance partners reduces the opportunities for making investments into digitalisation.
Table 1. Challenges for manufacturers investing in digitalisation
Digitalisation goals
In manufacturing, digitalisation affects a wide range of stakeholders and they all feed into the development of the goals. The lack of a specific and widely agreed goal is a critical barrier to making investments into digitalisation.
Digitalisation offers manufacturers opportunities to significantly change how they operate, what kind of relationship they have with their customers, what products or services they offer and who they offer these to. However, many manufacturers restrict their goals to incremental changes and, therefore, struggle to justify making the necessary investments.
Investment process
Digitalisation cuts across established investment categories as it involves aspects of R&D, employee training, and education, as well as the acquisition and implementation of technology solutions. The multi-dimensional nature of digitalisation challenges the traditional investment processes of manufacturers.
Manufacturers traditionally rely on internal rates of return or net present values to justify their investment decisions, and these are not well suited to the possibility of dynamically adjusting an investment after it has been initiated. With digitalisation opening future and potentially unknown opportunities, metrics are required that reflect the flexibility to adjust an investment, change a technology or even abandon it.
Digital technology attributes
The research identified the high costs of required technologies as a major reason that manufacturers do not carry out investments into digitalisation. The cost of technology is particularly high to early adopters, before economies of scale are achieved. Furthermore, while digital solutions are highly scalable, the returns on investments are limited if scale is not achieved.
The pace at which digital technologies develop is unprecedented. Any technology manufacturers choose could become outdated rapidly and require updating, which increases costs. Manufacturers may, therefore, decide to wait for the next digital technology generation to become available or for further standards to emerge before making investments.
People and their expertise
To make significant investments requires manufacturers to raise external finance; but manufacturers often lack the expertise to raise external finance for investments into digitalisation, which significantly differs from raising finance for investments into capital equipment: it requires different funders, business case details and preparations.
Also, decisions on investments in production machinery are often made at the plant level, and are aligned with responsibilities for performance and quality. As digitalisation affects the direction of manufacturers, with implications for their customers and wider networks, identifying the right locus of decision-making is critical for making effective investments. It requires a senior leader with the authority and expertise to make such wide-reaching decisions.
Organisational culture
Creating value with digital technologies requires product and process experimentation following test-learn-tweak cycles. Organisations need to develop a ‘tolerance for uncertainty’ to make effective investment decisions within this context. For manufacturers with limited R&D activities, dealing with these uncertainties is particularly difficult.
Although digitalisation will require changes in organisational roles and processes, the creativity and imagination of staff members across the organisation need to be drawn on to capture the opportunities presented. It is critical to ensure that digitalisation is not perceived as a cost-cutting exercise aiming to create redundancies to ensure the widespread support and effectiveness of investments.
Business network
It is not only the manufacturer’s own investment into digitalisation but also that of their customer and wider network that is critical to making an effective business case. Ultimately, value is co-created by the customer and the wider network, and if these parties do not make investments into digitalisation themselves then the manufacturer’s chances of deriving a return from their investments are reduced.
Making investments into digitalisation also puts a focus on the external finance partner as a member of the network. Finance partners are often overlooked in industrial value networks, but in a digitalisation context their role is critical. This is because these partners are not just financing a machine but also a business process or business development, which requires a much closer relationship.
Making effective investments into digitalisation is a critical challenge for manufacturers. These investments not only determine the success of current digitalisation initiatives but also affect the viability of future digitalisation journeys. It is today’s investments into digitalisation that enable the future competitiveness of the manufacturing industry. Manufacturers need to rethink their established investment processes and organisational practices as many of them stand in the way of making effective investment decisions into digitalisation.
Consider a company like Mueller Inc, an American manufacturer of steel buildings and metal roofing, among other things. Prior to their digital transformation, they were facing multiple issues. Their open-source management system lacked flexibility and their online presence was outdated. The buyer journey was far from clear, and customers needed to visit stores to complete purchases. In short, their future seemed increasingly uncertain. Could the answer to these dilemmas have lain in the past?
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‘History is the teacher of life,’ goes the saying of the Roman statesman Cicero. But is that still true? More to the point, can it be true in this period of the Fourth Industrial Revolution when the rate of innovation far outstrips anything seen during previous industrial revolutions?
Our project for InterAct, undertaken by teams at Aston and Cranfield, is currently testing the hypothesis that historical examples provide actionable insights for contemporary manufacturers, and that manufacturers can leverage such histories as they adopt the next generation of industrial technologies. Our preference is not to talk about revolutions, but rather about transitions: periods of occasionally spectacular innovation, followed by a halting or gradual readjustment across industry, with occasional sallies back into earlier practices or technologies. Industrial transitions are less like sudden grand revolutions and more like the stop-start evolution of our own lives. As Melvin Kranzberg, one of the pioneers of the history of technology, said “Technology is a very human activity.”
Discovering actionable insights in history
For our project, the team at Cranfield set out to tackle a systematic search of literature about the challenges of digitalisation in industry, finding and analysing 278 articles. Most of the present-day challenges they identified concerned questions of technical innovation, marketisation, or the future of employment.
The Aston team (the authors of this blog post) set out to look at mechanization (18th and 19th centuries), electrification (late 19th and 20th centuries) and computerization (20th century) – the earlier processes of industrial transition. What was clear from their review, however, was that the spectrum of industrial transition challenges is a lot broader than the perceived issues around technology and its monetisation. In this light, it is reasonable to argue that understanding digitalization needs a wider field of vision, one that is broadened by history, to tackle the challenges of the future and avoid the mistakes of the past.
By widening their field of vision through cases from history, we argue that today’s manufacturers have the chance during this digital transition to increase their appreciation of the potential risks and opportunities that lie ahead, and perhaps even stimulate creative solutions to them. Our historical case search reveals that there are dozens of issues that merit attention both within manufacturing operations (new safety questions, choices of innovation pathways, naivety about technical solutions) and outside of them (the power of location, globalization and culture, negative social consequences of innovation) which hardly figure on the lists of challenges for digitalization.
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Returning to Mueller Inc’s dilemma, perhaps inspiration could have been found in historical cases such as the electrification of Zurich’s streetlighting. Over 100 years ago, the town council’s dilemma was whether to invest in AC, DC, or their alternatives. There was little room to manoeuvre, and the recently installed gas-powered streetlighting could have risked looking like an expensive mistake.
Zurich’s response, however, was to focus on stakeholders and to choose the technology that would be more affordable and scalable – AC as it happened – allowing the city to grow by serving surrounding populations more effectively. The solution was technically elegant, but above all politically savvy. Likewise, our friends at Mueller Inc did not focus on which technology was best in its class, but on which digital solution would help their customers achieve their needs. The company opted to move their business to a major digital platform that greatly improved the customer experience while providing big data and analytic tools for their management.
Sustainability in manufacturing is a hot topic. And rightly so – many manufacturers produce large amounts of waste, much of which the supply chain creates. Rather worryingly, our supply chains make up 60% of carbon emissions in the UK.
The UK government’s initiative to reach net zero by 2050, as well as the legal obligations under the UN’s 2030 Agenda for Sustainable Development and the OECD Guidelines for Multinational Enterprises, is now well known. However, there is much, much more that can be done to reduce emissions – and digital technologies have a crucial role to play.
Click below to read more about the five best ways to promote sustainable practices within your supply chain.
