High value manufacturing

High value or value added manufacturing is proving an increasingly popular business model for manufacturers, changing their role and scope within the value chain.

High Value Manufacturing (HVM) is seen to be an important part of the UK economy. It their HVM Strategy for the UK, Innovate UK (formerly the Technology Strategy Board) define HVM as:

‘The application of leading-edge technical knowledge and expertise to the creation of products, production processes, and associated services which have strong potential to bring sustainable growth and high economic value to the UK. Activities may stretch from R&D at one end to recycling at the other. Such potential is characterised by a combination of high R&D intensity and high growth.’

This is quite a UK centric term and is an extension of the concept of advanced manufacturing which is more broadly recognised.

An alternative way of considering this, that puts HVM into a supply chain context was proposed by Archie MacPherson (CEO, WMG HVM Catapult) in the video you have just watched. He explains that HVM is about encouraging companies to move up the value chain and to reap the benefits of high-skilled, knowledge-intensive manufacturing operations whilst competing on unique value and innovation. Companies who are able to ‘move up’ the value chain are considered to be high value.

As Archie explains, high-value or value-added manufacturing is proving an increasingly popular business model for manufacturers. It includes innovation that supports speed of delivery, high-end products, unique production processes, customisation and environmentally sustainable product lines. It changes the role of companies. Traditional manufacturing companies are now also becoming researchers, designers, services provider and even retailers.

WMG is part of a network of 7 innovation centres that form the HVM Catapult, the catalyst for future growth and success in advanced manufacturing. This is one of a series of 10 Catapults developed to bridge the gap between business and academia. The aim is to turn great ideas into practice, by providing access to world-class research and development facilities and expertise that would otherwise be out of reach for many businesses in the UK. Funded by Innovate UK the catapults help companies accelerate and de-risk innovation through access to latest in technology and know-how.

Talking point

• How important do you think it is to have a national strategy for advanced or high value manufacturing?
• Which countries do you think are leaders in advanced manufacturing strategy?
• How good is the advanced manufacturing strategy for your country?