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

Periodic Reporting for period 2 - INSPIRE (Towards growth for business by flexible processing in customer-driven value chains)

Reporting period: 2017-09-01 to 2018-08-31

To reverse the delocalization trend, bring back or retain high value-added goods manufacturing for the 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.

Based on the description of the current EU landscape and the link between intensified processing and flexibility, the targeted outcome of this project was 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 fashion and automotive industry). INSPIRE also outlines research needs, deployment routes and guidelines to select novel business models under different scenarios.

The project also aimed to provide considerations 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
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
INSPIRE analysed the current situation and trends in the EU manufacturing and process industry,good practices and identified key business model archetypes based on literature research and 24 real life industry cases selected from a portfolio of more than 100 cases. The INSPIRE consortium zoomed in on 5 main trends that contribute to increased flexibility in products, location, feedstock, capacity, energy and innovation, as one of the main reasons to produce in Europe, versus outsourcing or relocalisation of production capacity. The main flexibilisation trends are: 1) modularisation and regional production, 2) mass-customisation of in the manufacturing value chain, 3) servitization in the process and manufacturing industry, 4) re-use, recycling and sustainability towards a circular economy and 5) digitalisation. Their impact on the supply chains and related bottlenecks have been identified, and five Business Model Archetypes have been defined, that established the core of the INSPIRE work:

1. BMA1: Decentralisation and Modularisation
2. BMA 2: (Mass) customisation
3. BMA 3: Servitisation and PSS
4. BMA 4: Circular business model (RR&D)
5. BMA 5: Emerging Energy Carriers

INSPIRE summarized the technologies for enabling flexible local/regional production and their potential to overcome bottlenecks. The main reasons were analysed for (re)localising industries (i.e. flexibility) towards Europe, how the identified emerging Business Model Archetypes (BMA) favour this objective. A Business Model Innovation Game was developed to carry out Action Design of Business Model Archetypes. The ‘specs’ of the BMAs were developed providing a detailed explanation of “technical feasibility” factors, “decision” factors and how this impacts the uptake of the business models, key “challenges” that may hamper the deployment of these business models as well as relevant “solutions”. INSPIRE probed the effectiveness and robustness of the business model solutions developed within chosen social-economic and technological scenarios for the future. It furthermore defined main research needs per BMA and developed practical Guidelines for Business Model selection with five key INSPIRE results :

1) Detailed descriptions of 5 Business Model Archetypes, including managerial decision factors, key challenges and solutions for take-up
2) Technology Dashboards for each BMA
3) a Business Model Innovation Game including all BMA’s and related technology clusters
4) a prototype Decision Support System and excel tool for each BMA
5) the INSPIRE BMA Value Patterns to inspire revenue model innovation within the chosen BMAs.

INSPIRE implemented a Dissemination and communication plan to share INSPIRE results; This community of external stakeholders, including 100 industrial parks in Europe, establish a potential base for exploiting the main INSPIRE results (tools), by informing them about these outputs and offering free downloads of the tools on the INSPIRE website at http://www.inspire-eu-project.eu/inspire-tools/

The INSPIRE finally developed their intentions to exploit and take-up the project results by integrating them into educational programmes for future industry managers, follow-up projects to leverage on the results in designing the industry value chains of the future, further develop the Business Model Innovation Support tools to foster their take-up and validate their use through innovation consultancy in industry.
For many managers business model innovation remains a vaguely defined concept, and it proves not always easy to apply to their own businesses. Moreover, there are no tools that explicitly focus on increasing flexibility. INSPIRE added specific “flexibility in process industry” elements to state of the art Business Model Innovation tools and the general BMI value system as inspired by the Business Model Canvas.
These INSPIRE tools provide specific and complementary added value with respect to the state of the art generic tools as they provide:

1. dedicated support tools for business model innovation (BMI) towards 5 key trends in the process industry, so being more specific than general tools.
2. support to reason about specific technologies, that are relevant for these BMA’s and the extent to which they are mature enough or if further research is recommended. Existing BMI tools are more general, and do not take a “technology view”.
3. a “serious game approach” towards value chain BMI, potentially involving multiple value chain partners. One of the learnings of INSPIRE is that a systems approach, value chain collaboration and even aligned business cases between the value chain partners maybe a critical success factor.
4. a new concept of BMI readiness for the five BMAs, which could be used to benchmark the BMI readiness of one company, in the future possibly against the sector baseline
5. a Business Model Decision Support tool, can be used by managers to reason about the “fitness” of a specific BMA for their company or business eco-system.
5. practical solutions, when designing the new Business Model, to overcome concrete challenges/bottlenecks
6. inspirational suggestions for Value Model innovation

The INSPIRE tools hence add value to the existing tools system, fostering those parameters in the process and manufacturing industry (flexibility) that favour reshoring and most likely also retaining of important manufacturing industries in Europe.