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Towards growth for business by flexible processing in customer-driven value chains

Periodic Reporting for period 1 - INSPIRE (Towards growth for business by flexible processing in customer-driven value chains)

Reporting period: 2016-09-01 to 2017-08-31

The INSPIRE project brings together the process industry (including industrial parks) and discrete manufacturing to help understand how these two industries can cooperate to shape new customer-driven, efficient and sustainable business models.
Elements of more demand driven and mass-customization models from the discrete manufacturing industry will be taken as a basis to understand how business and organizational models process industry may evolve and to further integrate upstream elements with downstream elements up to the consumer (vertical adaptation of the business models). Industrial symbiosis cases and total site analysis approaches to optimize resource use and re-use will be studied as well, to adapt current business models to more resource efficient resource optimization (horizontal adaptation of business models).
Given the more demanding consumers, it is of grave importance for the value chain of companies to provide high quality products, reduce time to market while minimizing production costs. To reverse the delocalization trend and bring back high value-added goods manufacturing to EU, new business models must be developed based on more effective and sustainable supply chains that would help companies be more flexible and responsive to ever changing demands and market, volatility and value chain configurations.
Mass customization is key to meeting the diverse consumer needs in the discrete manufacturing world. Process intensification is reported to be an enabler of flexibility and cost optimisation.
The main focus of INSPIRE is on the development of innovative business models that create flexible networks based on intensified processing. Special attention will be given to how this approach would be responding to the needs of SMEs as partners in value chains. Based on the description of the current EU landscape and the link between intensified processing and flexibility, the expected outcome of this project would be the development of innovative business models for a selection of complementary sectors where new more flexible and demand driven solutions and supply chain configurations are emerging (e.g. 3D printing/additive manufacturing, bio-based materials and chemicals, mass customisation in the automotive industry). INSPIRE will also outline research needs, deployment routes and a guideline to assess the performance of such novel models under different scenarios.
The project is expected to provide guidelines as to how more local business opportunities in EU could be created, how the environmental impact could be reduced in a cost effective and sustainable manner, continuously taking customer needs into account. In the light of the above, specific objectives are:
1. Understanding the major drivers and requirements for more flexible and demand-driven sustainable manufacturing and processing via examination of the present landscape and evaluation of best practices and use cases in a complementary and representative selection of manufacturing and process industries with great potential for implementing a customer-driven model (automotive, steel, chemicals, bio-based economy).
2. Deriving how these drivers and requirements for more flexible, demand-driven and sustainable operations and intensified processing will shape the future manufacturing and process industries and what kind of business models it would necessitate.
3. Define the research needs and formulate an industry supported roadmap for the development of ambitious but realistic transition of industry to adopt the proposed business model solutions.
4. Develop replication strategies and KPI-based methodology to stimulate evaluation and benefits taking up new developed business models, proposing research directions on how business models developed from a regional system perspective can be replicated and scaled up.
The INSPIRE project first term results are primary a selection of promising business cases and a preliminary evaluation of major trends in the process and manufacturing industries that (may) impact different forms of business model innovation. Starting now with the second term of the project time, the focus shifts towards the requirements to develop new business models and concrete areas of application.
To keep the scope of the research manageable, we first chose to portray business model innovation trends with potential impact on value chains, flexibility and delocalisation. We made an assessment on these trends and a first indication of how these business model archetypes impact on delocalisation and flexibility. This also depends on how technologies develop further. The INSPIRE consortium has chosen a pragmatic and iterative approach by means of a desktop study and interviews with stakeholders. Where possible at this stage, success factors that ensure or hinder successful deployment of such forms as well as flexibility parameters to optimize flows in the value chain have been explained. In doing so, recent trends shaping the current landscape were analysed. WP1 provided empirical evidence for the consortium for the need of further and in depth investigation including additional interviews with stakeholders in order to indicate the technologies and trends in the realm of flexible manufacturing and delocalization. This is needed to serve as input for the archetypes of the business models to be proposed in the second term of the project.
The project has achieved most of its objectives and milestones for the period, with relatively minor deviations. That implies that in the next phase of INSPIRE a number of tasks (ie. the analysis of the impact of business model innovations on delocalisation, mapping the factors that favour and bottlenecks flexibilization and delocalisation) have to be integrated in the next ones - maybe adding an element of bottlenecks for industries to “migrate to new business models”.
The members from the rather small consortium (PNO, TNO, ZLC, ITIA) work closely together. Tasks are performed in close collaboration between the partners and with regular exchange of information. This has been facilitated by consortia meetings and regular skype meetings almost every 3 weeks.
The deployment of business models, the communication, dissemination and exploitation of the project results is focus of the second period term. DoA described impacts are:
1. Develop new business model solutions that can support the return of delocalised manufacturing to EU.
2. Reduction in the environmental footprint compared to products produced in the traditional value chains through less stock, waste, and transportation.
3. Reduction of raw material through the creation of strong networks with related sources coming from different sources (primary and secondary) locally.
4. Development of scenarios to identify the proper locations and opportunities associated to delocalised facilitates taking into account legal and social hampering factors.
5. Increased business opportunities on a local scale.
6. More involvement of customers/users in the integrated innovative business model solutions.
To ensure the expected impacts the consortium will make a short additional Workplan that presents the methodology for the exploitation of the project results (how it links to the subject of spatial flexibility/countering delocalisation, number and case studies and how to study, what data to extract, how this leads to the conclusions).
Mr. Weerdmeester during one of the DCE activities