The INSPIRE business model innovation workshop was held in Brussels on November, 23th, 2017. The participants were given the task of redesigning the value chain and discussing the required technologies and related flexibilities in four parallel sessions during the workshop. The business model innovation exercise in each parallel session was designed for a particular business case (real life problem) focusing on a business model archetype as defined in the work package of the INSPIRE project.
Specifically, the participants worked on the following Business Cases (BC) and business model archetypes during the parallel sessions:
- Decentralised or modular production (DM): BC1– Small scale ammonia.
- Mass- customization: BC2– Fashion sector in Europe.
- Servitisation of the process industry: BC3– Chemical leasing.
- Reuse and sustainability: BC4– Critical Raw Materials (CRM).
Detailed descriptions of each parallel session and the related discussions are provided in Annexes 1 to 4. The participants were split into two major groups. One subgroup of the participants were encouraged to contemplate major challenges/barriers and opportunities that each business model archetype would have for the specific business case in each session, while redesigning the value chain. The redesign was based on proposing types of flexibility and technologies identified in [INSPIRE D2.1]. The other subgroup was charged to observe and provide feedback to the design based on a number of different evaluation aspects (e.g. sustainability, economic viability, reshoring opportunity). This assignment of roles helped to improve the resulting design. For more information about the structure of this game, please get in touch with the consortium via firstname.lastname@example.org.
In what follows, we present the general findings/insights from the discussions (detailed discussions for each session are in Annexes 1-4), along with the comments participants made in regards to the technologies required and flexibilities created with the potential deployment of the business model.
A number of challenges were identified for all business models. To name a few, for instance, in BC1 (small scale ammonia) main challenge seems to be the high dependence on natural gas. Natural gas causes a large CO2 footprint and fluctuation in the price of ammonia, which is an element of vital importance for world food supply. Main challenges for mass-customization in the fashion sector in Europe in BC2 originate from the need for a more flexible, efficient, and sustainable production system, which is responsive to changes in demand and capable to quickly gain market share. The inclusion of Small and Medium Enterprises (SMEs) and the length of the value chain emerged as important elements to consider for the mass customization model in BC2.
The servitization model for the chemical leasing business case (BC3) introduces new roles for two main players (supplier and user). In the new value chain configuration, the supplier becomes responsible for not just for the supply of the chemicals but also for additional services (e.g., application of the chemical and recovery after use) and the user pays for the “service” provided. The definition of “service” seems to be a major challenge for this business case, where the scope identification and the guarantees regarding potential “gains” for both players constitute major barriers against successful deployment of the servitization model.
The main challenge for the reuse model in the “critical raw materials” business case (BC4) is related to the location of the source of these materials, predominantly in non-EU countries, and its use in manufacturing several daily-life products. Furthermore, global markets are relatively unstable and prices tend to fluctuate. The biggest challenge is to create low cost recovery technologies and the necessary conditions for investments in collection, treatment and re-use to be able to re-use of critical raw materials in end-of life products.
In addition to the main barriers, how different flexibilities are affected and technologies required in the four business cases were also discussed. Table 2 below shows a summary of flexibilities of the following six types: (1) Location, (2) Capacity, (3) Product, (4) Feedstock, (5) Innovation, and (6) Energy. Similarities across business cases are related to the location flexibility, the need to be close to the customer/ user, the necessity to increase the resilience of the SC for BC2 and BC4, and the reuse of materials in BC3 and BC4.
Six types of flexibility
In addition to the main barriers, how different flexibilities are affected and technologies required in the four business cases were also discussed. Table 1 below shows a summary of flexibilities of the following six types: (1) Location, (2) Capacity, (3) Product, (4) Feedstock, (5) Innovation, and (6) Energy. Similarities across business cases are related to the location flexibility, the need to be close to the customer/ user, the necessity to increase the resilience of the SC for BC2 and BC4, and the reuse of materials in BC3 and BC4.
Table 1: Flexibilities
In regards to the technologies required, Information and Communication Technologies (ICTs) have been identified as relevant technologies in all business cases. Specifically, ICTs in BC1 are related to remote control and systems to ensure the continuous operation of the plant. BC2 uses big data for the identification of the fashion trends and the creation of new business opportunities. BC3 depends on the information infrastructure and the capabilities to monitor/measure service, and BC4 points out the internet of things (cloud based platforms) for identifying the availability and location of critical raw materials. In addition, 3D printing technology has been identified as relevant in BC1 and BC2. Sustainability and recycling technologies are also relevant technologies that have been recognized in all business cases with exception of BC1.
Some insights that emerged as a result of the discussion during the game were structured around four factors (see Table 3 below): (1) Sustainability, (2) Efficiency, (3) EU reshoring, and (4) Resilience. Sustainability arises in the discussion as a consequence of the current trend towards a circular economy, and is based in the re-use and recycling of materials. Efficiency in the discussion is mostly referred to the reduction of costs (e.g., transportation, production) although some changes are necessary (e.g. new equipment), and some questions arise linked with the obtaining of the funding. On the other hand, EU reshoring is generally related to a change in the production (e.g. from big producers to local ones, supplier close to the user). Last but not least, resilience is highly dependent on the interdependencies between the actors of the SC.
Table 2: Insights from the discussion process
The session also involved the redesign of the value chain in the four business cases. New elements were added and can be seen in Annexes 1 to 4 in detail for each business case.
The feedback received from the participants via this workshop along with the learning experience regarding the opportunities and critical issues towards more flexible and sustainable value chains will be used in the INSPIRE project for the proposal of novel and innovative business solutions. The following section of this report includes the detailed discussions for each parallel session.
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