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High value manufacturing

High value manufacturing
High value manufacturing, I’d like people to think of it quite simply as, how do they sell more than just a product? So a product plus a service provides a solution. And what that means is companies can be more competitive than just selling the product. They can get more of the value added, so hence higher value manufacturing. I would say that the characteristics that I see within the UK, within Europe, of high value manufacturing companies, they have three key elements. One is that innovation is a way of life. How they drive that from the very top, and they get the balance right between day-to-day operations and development activity. Secondly, they invest.
Be it in capital, be it in that resource, be it in that technology. They’re always looking forwards to the future. And thirdly, I would say they’re very good at making it happen. Joining that together, driving it. Very good at managing failure. And if a project isn’t working, they’ll fail it fast, but then accelerate others. They’re very good at making innovation happen. Manufacturing today equates to around about 360 billion of the UK economy. So is it important just for the size of that number? It’s incredibly important. Companies in the UK have to be more competitive. So to do that, the belief, and my personal belief, is that they need to move up the value chain.
Manufacturing also accounts for around about 3 million of people employed here in the UK. It equates to 10% of our GVA. So I’d say it’s not important, it’s fundamentally critical. And what I would say is that I see here in the UK now, with a new government, I see there’s a focus on an industrial strategy, which I think has been missing. I think there’s a need now to join this all up into an integrated, seamless approach to support manufacturing, accelerate innovation, and de-risk. And that’s part of what we do here WMG.
The high value manufacturing catapult was set up around about five years ago to help bridge the gap between the fantastic research that we do here in the UK to meet the needs of industry. And that’s typically where there’s been a valley of death, as we’ve called it. So the idea is how does it join it together, accelerate and de-risk it, for companies. And I think the best way to share that with people is that when you do the fundamental research, it’s incredibly hard to translate that into production. Why? Because industry doesn’t like risk, and so thus you get a lot of fantastic ideas that never quite get there.
So the high value manufacturing catapult was set up to de-risk that process. Well, WMG has been working in the space of bridging research and industry need for more than 30 years. The focus that we have at the moment is around low carbon energy, and there’s four key elements to that that we work on. One is on energy storage, which is looking at next-generation batteries. We work on the chemistry, the formulation, how we make the cells and then how do we create the demonstrators for tomorrow’s needs. Secondly, we work on light weighting. So the challenge now, how do we help designers and manufacturers pick the right materials for the right application at the right cost at lower weight. Why?
For lower carbon emissions in everything that we do. Thirdly, we work on what I call advanced propulsion, which is next-generation electric machines. How can we take the technology that we know around regarding motors, inverters, the transmission system, and put that into production? Fourthly, we work on intelligent vehicles, be that in terms of cars, railway, submersibles. The idea being, as we see with the Google car, as we see with Tesla with where they’re going, how do we de-risk this for the OEMs and the marketplace. WMG work with original equipment manufacturers and supply chain in understanding their issues, their research challenges, and then how can WMG help to make it happen and put it into practise.
For example, we have a team of 20 WMG employees who work with SMEs - that’s small to medium-sized enterprises - and their issue is around how do you balance the day-to-day operations with development and getting it out the door.

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?
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