High Value Production

Aim

The aim of this research is to capture the structure and characteristics of high value production (HVP) to inform industrial strategic planning and government policy making.

Background

A good deal of attention has recently been paid to the role of manufacturing in the UK economy and in particular to high value manufacturing. There has been recognition that manufacturing needs to be understood as embracing:

• a breadth of activities (the value chain from R&D right through to in use service and end use recycling)
• a range of global dimensions (notably with an important focus on Asia adding to the established approaches to Europe and North America)
• a variety of business models (outsourcing, service delivery etc.).

IfM has played a significant role in establishing this broader understanding of manufacturing and of high value manufacturing–emphasising the point that different stakeholders will attach varying values to a particular activity.

Our work has highlighted that in some cases it is possible for companies to create and capture value within a single stage in this value chain. In other cases the ability to capture value at one stage may depend on capability in another. For example, capturing value from design may require appropriate proprietary production capability.

At the same time as recognising the full range of manufacturing activities, IfM has been concerned to ensure that due attention continues to be paid to the production element of the value chain. The strategic importance of production was demonstrated in the report "Making the Most of Production". This hypothesises as to the benefits that are likely to derive from HVP and argues that "A greatly improved micro level understand of these linkages [between production and other parts of businesses and the economy] is vital if issues of innovation, productivity and competitiveness are to be tackled through a partnership of government and industry".

There is still a need for better tools and techniques to assess the importance of production, particularly as it is becoming increasingly apparent that production knowledge and capability may be particularly important in emerging science and technology based industries where conventional processes are no longer applicable.