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Advanced manufacturing is the production of complex machines through the application of new technologies and processes. It involves utilizing enabling technologies and innovative design and business processes to create novel, high value and competitive products efficiently. Advanced manufacturing is relative to a country's existing capabilities and involves upgrading processes and technologies at any stage of production. Understanding how global value chains are managed can provide insights into how countries can integrate into global manufacturing industries.
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- 3. Advanced Manufacturing is: • The utilisation of enabling technologies, incorporating design and business process innovation to deliver high value-added processes and products in ways that are novel and competitive.
- 4. So what does that mean? Let’s break it down
- 5. • Industries using advanced technology which enable them to achieve the result they want more effectively and efficiently. For example: • using keyhole surgery doctors can now perform some procedures with only a 5-15mm incision; • manufacturers can use “robots” to perform high-precision jobs such as welding and riveting; • farmers can use GPS technology to monitor the application of fertilisers and pesticides, map fields and mark areas of disease or weed infestation. The utilisation of enabling technologies…
- 6. …incorporating design and business process innovation… • Using new and improved methods to design their product and operate their business. For example: • Using lean manufacturing principles a factory uses the minimum amount of manpower, materials, money, machines, space etc to get the job done on time.
- 7. …high value-added processes and products… • Incorporating manufacturing processes and techniques that add value to the end product, for example: • A German company Manitowac launched a brand-new technology in the world's lifting industry with its new telescopic mobile crane. The crane can be used in locations where height and mobilisation is a key issue, such as erecting wind turbines or working on industrial or city centre sites
- 8. …ways that are novel and competitive. • Incorporating new methods or utilising new materials that will give their business the edge in terms of competitiveness or quality, for example: • Coopers Brewery’s state-of-the-art brewhouse design employs cutting edge technology which combines energy conservation and yield efficiency. • Power for the Brewhouse is produced on site by a 4.4MWatt, natural gas, cogeneration plant. Excess power is put back into the domestic power grid.
- 9. So in summary…. • Advanced Manufacturing is all about: • Using technologies and techniques to optimise the product design and the manufacturing process, creating a quality end product that is cost effective to produce and competitive in its market.
- 10. Structure of Session 1. What is advanced manufacturing? 2. Why is it important? 3. The challenges of building an advanced manufacturing sector in a globalised world
- 11. What is advanced manufacturing? 1. It is the production of complex machines through the application of advancements in science in manufacturing processes and product design 2. It is the application of advanced technologies and processes at any stage of the value chain a. technologies refers to productive equipment and knowledege b. processes also includes managerial practices (e.g., lean, supply chain management, e-commerce etc.) 3. In a nut shell building advanced manufacturing is a. Relative to where an economies’ productive capacity are at b. Is simply about process and technology upgrading
- 12. The typical view of an industrial value chain can be misleading Typical Value Chain Extractive Industries Primary and Secondary Processing (i.e., beneficiation) Primary manufacturing Secondary/advanced manufacturing Advanced Manufacturing?? ServiceIndustries Typical Metal Based Industries • Mining ore bodies Typical Chemical /Pharmaceutical Industry • Harvest from nature (e.g., the air, oil well, mineral body) • Reducing ores to metals to produce ingots, plates or rolled metal • Fabrication i.e. - casting, forming, machining etc. • Assembly into components/subsystems (braking/steering systems) • Assembly into complex systems (e.g., cars) • Separation processes (e.g., refinery, cryogenic air separation, membrane separation) • Primary Chemical Processing (based ingredients e.g., Sulphuric, Nitric and Phosphoric Acids, basic polymers and compounds • Secondary Chemical Processing (pharmaceuticals and other synthetic compounds)
- 13. A simpler view of an industrial value chain helps us understand what advanced manufacturing is about But how do we apply it? Raw Materials Processed Materials Parts and Components Machines ServiceIndustries InformationEngineering
- 14. Firstly, what is a machine? My simplistic view of machines – not entirely correct Purely mechanical machines Anything that uses mechanical energy only. (e.g., watches, bicycles, egg beater) Electro-mechanical machines Mechanical machines that use electrical sources of energy for propulsion and control purposes (e.g., lawn mower, electrical car, aircraft) Chemo-mechanical machines?? Mechanical machines which use chemical sources of energy?? - control is more important than propulsion?? Electro-chemical machines Batteries, solar panels, CDs etc. Electro-magnetic machines Computers, TVs (thank you Solymar), computer chips. Bio-chemical machines Enzymes e.g., yeast and Biological machines Bacteria, your body cells, yeast Chemical machines Pharmaceuticals
- 15. My simple observation about machines 1. All machines have some form of a control system (manual /automatic / super intelligent) 2. This control system is able to process information about what’s happening around it and use it to tell the machine what to do a. Need some form of a feedback loop b. Some are naturally built in c. Most need to be built in 3. Advanced manufacturing is about understanding how these control systems work or work along side other systems so that we can use these machines for our own ends. a. CDs, DVDs, TVs etc are a result of our understanding of how to excite electrons and get them to do or store cool things b. A bomb is not a machine cause we can’t control the release of energy, but a rocket or a nuclear reactor is a machine 4. We also need more advanced manufacturing technologies to make different types of machines a. You can’t make micro-processors with simple tools, outside of a clean room Advanced manufacturing is the production of complex machines through the application of advancements in science in manufacturing processes and product design
- 16. Secondly what have been the recent advances in science (including mgt. science) and their impact on manufacturing Recent advances in science Impact on manufacturing process and products E-Commerce Supply chain management and ??? Nano-technology Product engineering vs. process engineering Miniaturization Cell phones Increased Computational Power Visit any control room during a factory visitor Bio-technology Consistent quality in beer production, new drugs Composites Lighter cars, light planes, lighter missiles Space/Cellular Technologies Productivity of vehicles working in mines Advanced manufacturing is also about the application of advanced technologies and processes at any stage of the value chain
- 17. But what about less developed countries who haven’t mastered basic manufacturing processes 1. Advanced manufacturing is relative to a countries capabilities o Advances in manufacturing can be made in processes rather than at a technology level, but o Technology can also be bought (or donated)
- 18. Therefore the suggested definition of advanced manufacturing? 1. It is the production of complex machines through the application of advancements in science in manufacturing processes and product design 2. It is the application of advanced technologies and processes at any stage of the value chain a. technologies refers to productive equipment and knowledege b. processes also includes managerial practices (e.g., lean, supply chain management, e-commerce etc.) 3. In a nut shell building advanced manufacturing is a. Relative to where an economies’ productive capacity are at b. Is simply about process and technology upgrading
- 19. Frameworks to assess how firms in a global industry compete (1/2) Porters Diamond Factors of productions Demanding customers Business Environment Regulatory environment Competitive industry If you don’t have this locally, get it globally
- 20. Frameworks to assess how firms in a global industry compete (2/2) What are Global Value Chains? Name Value Chain Production Network Definition Sequence of productive (i.e. value-added) activities leading to end use Two or more value chains that share at least one actor (network linkage) Other Names Supply Chain, Commodity Chain, Production Chain, Activities Chain, Pipeline Value network, Input-output matrix, Supply Base Benefits Focuses on the essential steps taken to get a product to market and thus makes the role of the key players more explicit. Allows the capturing of the dynamism and complexity of productive activities
- 21. o competitive advantage can be gained by developing linkages with distinct kinds of lead firms in global industries o these lead firms are the ones that control access to major resources that generate the most profitable returns in the industry E.g., o product design, new technologies, brand names or consumer demand o An alternative approach for gaining competitiveness within the GVC framework is for a firm to leverage its relationship with other members of its network to develop its competencies. Application of the global value chain approach Key postulates of the Global Value Chain Approach
- 22. o Automotive sector o Aerospace sector o Pharmaceutical sector o Defence sector o Clothing sector o Agro-processing o Beverages o Appliances o Media Examples of where this is happening in the world around us ?Can we leave anything out
- 23. If you believe the above, an understanding of how lead firms manage their global value chains should provide some insights into how South African can become part of the global manufacturing industry Conclusion
Editor's Notes
- Should I lose you as I waffle, the three things I would like you to take away from this opening session are as follows: Adv manufacturing is about the application of advanced technologies and process at any stages of the value chain – technologies refers equipment, processes also include managerial practices (e.g., lean, supply chain management, e-commerce etc.) Adv Manufacturing is about making more complex machines and materials through the application of knowledge and advancement in manufacturing processes (e.g., nano-technology, biotechnology, minuturazition, increased computational capacity etc.)
- Typical the way economist view the value chain is shown above. This world view is applied by statsa in statistics and we would tend to think of the economy in that light. Those of us with an engineering background or experience of the mining and chemical sector will typically think of the world in this light. However, these industries are not often referred to as advanced manufacturing, after all the processes used in these industries have been in existence for yonks. So where exactly are advances in manufacturing been made. Is there scope for product upgrading in these industries? Is there scope for technology upgrading in these fields? Is there scope of for process upgrading in these fields? I would like to argue that advances are still been made in terms of processes and improvements in technology, albeit simple and subtle upgrading. But a simply view of the world is needed for us to understanding what advanced manufacturing is about.
- If we look at the world differently – using a view I believe to be more MECE. What can we learn about advanced manufacturing. what advances after occurred recently in
- Should I lose you as I waffle, the three things I would like you to take away from this opening session are as follows: Adv manufacturing is about the application of advanced technologies and process at any stages of the value chain – technologies refers equipment, processes also include managerial practices (e.g., lean, supply chain management, e-commerce etc.) Adv Manufacturing is about making more complex machines and materials through the application of knowledge and advancement in manufacturing processes (e.g., nano-technology, biotechnology, minuturazition, increased computational capacity etc.)
- Should I lose you as I waffle, the three things I would like you to take away from this opening session are as follows: Adv manufacturing is about the application of advanced technologies and process at any stages of the value chain – technologies refers equipment, processes also include managerial practices (e.g., lean, supply chain management, e-commerce etc.) Adv Manufacturing is about making more complex machines and materials through the application of knowledge and advancement in manufacturing processes (e.g., nano-technology, biotechnology, minuturazition, increased computational capacity etc.)
- The terms value chain, commodity chains, value networks, activities chain, production chain and input-output analysis are frequently used to describe analysis that take the entire chain of activities that bring a product to its market place into account. Although they are often used interchangeable, a distinction between value chains and production networks provides greater analytic rigour. (Sturgeon, 2000:6) The production network approach allows the capturing of the dynamism and complexity of productive activities, whilst the value chain approach focuses on the essential steps taken to get a product to market and thus makes the role of the key players more explicit. The relevant definitions are given in table 1 below. (Sturgeon, 2000:6)
- The terms value chain, commodity chains, value networks, activities chain, production chain and input-output analysis are frequently used to describe analysis that take the entire chain of activities that bring a product to its market place into account. Although they are often used interchangeable, a distinction between value chains and production networks provides greater analytic rigour. (Sturgeon, 2000:6) The production network approach allows the capturing of the dynamism and complexity of productive activities, whilst the value chain approach focuses on the essential steps taken to get a product to market and thus makes the role of the key players more explicit. The relevant definitions are given in table 1 below. (Sturgeon, 2000:6)
- An alternative approach for gaining competitiveness within the GVC framework is for a firm to leverage its relationship with other members of its network to develop its competencies. The central idea in this approach is that participation in “an inter-organisational network depends on the competencies built by each firm”. This hypothesis has been developed in studies of the development of various Brazilian industries with a special emphasis on the internationalisation of these industries. (Fleury and Fleury, 2003;1)
- An alternative approach for gaining competitiveness within the GVC framework is for a firm to leverage its relationship with other members of its network to develop its competencies. The central idea in this approach is that participation in “an inter-organisational network depends on the competencies built by each firm”. This hypothesis has been developed in studies of the development of various Brazilian industries with a special emphasis on the internationalisation of these industries. (Fleury and Fleury, 2003;1)
- An alternative approach for gaining competitiveness within the GVC framework is for a firm to leverage its relationship with other members of its network to develop its competencies. The central idea in this approach is that participation in “an inter-organisational network depends on the competencies built by each firm”. This hypothesis has been developed in studies of the development of various Brazilian industries with a special emphasis on the internationalisation of these industries. (Fleury and Fleury, 2003;1)