1. The presentation discusses advanced manufacturing, defining it as the production of complex machines through advancements in science and manufacturing processes.
2. It is also about applying advanced technologies and processes across the value chain. Advanced manufacturing is relative to a country's capabilities and can involve upgrading processes rather than just technologies.
3. Building an advanced manufacturing sector in a globalized world requires understanding global value chains and how to develop linkages with lead firms that control major resources to gain a competitive advantage. Firms can leverage relationships within their industry networks to develop competencies.
2. 2
Presenters
1. Mehleli Mpofu (Acting DDG Manufacturing Unit)
2. Jan Wessels (MD, Denel Dynamics)
3. Chart Van Der Walt (Denel Dynamics)
3. 2
Structure of Session
1. What is advanced manufacturing? (MM)
2. Why is it important? (JW and CvW)
3. The challenges of building an advanced manufacturing
sector in a globalised world (MM)
4. Panel Discussion (All)
4. 2
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
5. 2
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??
Service
Industries
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)
6. 2
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
Service
Industries
Information
Engineering
7. 2
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
8. 2
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
9. 2
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
10. 2
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)
2. It is possible to leap frog technologies
o In fact in some case, new technologies have lower barriers to entry,
than old technologies (e.g., wireless internet vs. cable based internet
access).
o Malaysia’s vision 2020
11. 2
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
12. 2
Structure of Presentation
1. What is advanced manufacturing? (MM)
2. Why is it important? (JW and CvW)
3. The challenges of building an advanced manufacturing
sector in a globalised world (MM)
4. Panel Discussion (All)
13. 2
Structure of Presentation
1. What is advanced manufacturing? (MM)
2. Why is it important? (JW and CvW)
3. The challenges of building an advanced manufacturing
sector in a globalised world (MM)
4. Panel Discussion (All)
14. 2
How to build an advanced manufacturing sector in a
globalised world?
Key Message
• Markets, markets, markets (B2B or B2C, local vs. global)
• There are big firms out there who control access to key
resources – we are not alone
• Competitive advantage can be gained by developing
linkages with lead firms in a global value chain
• Organisations can use their relationship with other
members of their network to develop their competencies.
15. 2
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
16. 2
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
17. 2
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
18. 2
o Automotive sector
o Aerospace sector
o Pharmaceutical sector
o Defence sector
o Clothing sector
o Agro-processing
o Beverages
o Appliances
o Media
o Etc. etc.
Examples of where this is happening in the world around us
?
Can we leave
anything out
19. 2
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
20. 2
Structure of Presentation
1. What is advanced manufacturing? (MM)
2. Why is it important? (JW and CvW)
3. The challenges of building an advanced manufacturing
sector in a globalised world (MM)
4. Panel Discussion (All)
Notes de l'éditeur
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)
