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Renewing industrial practices creates a new competitive edge

Text: Leena Koskenlaakso | 6.5.2019

​In an increasingly global and digitalised world, the Finnish manufacturing industry can only improve its competitive edge by questioning its traditional approaches. 

- Every manufacturing company should pause to critically review its traditional approaches, as globalisation and digitalisation are dramatically changing their business environment. At points of transition, what is called for is creative thinking, the ability to develop new ideas, proactiveness, active learning and the skills to solve complex problems, says VTT Professor of Practice Nando Malmelin. 

Malmelin and VTT Research Manager Katri Valkokari encourage industrial companies to renew themselves based on three key principles: 

  • Question traditions, assumptions and established ways of thinking 

Competitiveness is created through intangible assets – ideas and new ways of thinking. This requires unleashing the creativity of the employees. You must have the courage to boldly do things differently than before. 

  • Develop new collaboration platforms and dynamic ecosystems

A new kind of collaboration model must be developed that is based on experimenting and networks comprising different types of players. Experiments always involve the possibility of failure, but even failure contributes to progress.

- A good example of the manufacturing industry's corporate and research ecosystem is the Reboot Finland IoT Factory project, where factories act as innovation platforms for IoT products, says Valkokari. 

  • Renew your strategies, business models and management systems

- Strategic management cannot be one-sided. It must maintain a balance between streamlining current processes and developing new solutions, Malmelin points out.

Many industrial companies that previously focused exclusively on product manufacturing have created new business from services. Renewal requires learning and a shift in thinking, operational plans and management. 

- The popularity of hackathons, living labs, test beds and other experiments shows that companies have already realised the need for change and know how to apply new approaches, remarks Valkokari.

Two paths to business transformation  

According to Valkokari, industrial companies can utilise disruptive business either by offering their customers overall efficiency as a service or by combining data obtained from various sources into solutions and services. 

Overall efficiency can be improved through remote use, monitoring and optimisation, while knowledge-intensive service business can be developed together with a partner network specialised in data integration. 

The challenge in both paths is the ability to question existing truths and achieve sufficient agility. Business transformation also always requires changes in the operating environment and in one's own and customers' thinking. 

Update your strategy on a continual basis

- It's not enough to consider your strategy once a year. It must be reviewed on a continual basis, as the goal is constantly changing, Malmelin emphasises.

Industrial companies can generate growth by entering new sectors and markets and seeking new customers. Continuous renewal can be achieved through design expertise and by giving up old operational models, while profit capabilities and efficiency are improved by renewing production and manufacturing. 

 

 

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