It was interesting to read the CBI director-general Carolyn Fairborn state that government and business must collaborate to revitalise a modern industrial strategy. In particular that
“Manufacturing is evolving. First is the increasing tendency for manufacturers to develop and sell services. Rolls Royce’s ‘power by the hour’ engine service, for example, offers engine management and maintenance, at a fixed price per hour of flying.
“And in today’s knowledge economy – the line between ‘manufacturing’ and ‘services’ is blurring even further. In the years to come, as digital technologies increasingly define what we make and do, I think we’ll see more creative and technology companies doing things which could be classed as ‘manufacturing’.
This is the situation in the UK that we at Si2 have been closely following and involved with; see our blog article ‘The Re-invention of Manufacturing and its implication on Service business leaders’
And it is not a case of just thinking differently, but finding new paradigms of how to work together. In particular, the fact that the world is becoming so complex, makes it difficult for one organisation to deliver all aspects of a business solution. Its not just about using traditional supply chain management processes. True collaboration implies an inter-dependency between stakeholders which requires an ecosystem approach to manage a much more complex set of relationships. If done well, it can allow smaller business to deliver complex solutions that would appear outside their capability. For example at Si2 we worked with MAC Solutions to develop a remote services solution for SME equipment manufacturers…for more see our Management Insight ‘Ecosystems to develop Advanced Services‘. Although they were experts in Industrial Routers, they had to bring together an ecosystem of 6-7 technology suppliers to be able to deliver a seamless solution. The practical reality was they could not rely on a traditional hierarchical supply chain approach, so instead opted to create an ecosystem of partners.
So it is significant that in the UK, senior business leaders are now talking openly about Digital Services and opening up to new collaborative ways of working. We would be interested to hear if other regions of the world are seeing the same phenomenon.
Nick Frank is Managing Partner at Si2 Partners, a consultancy helping clients leverage services to win in industrial markets
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