Characterisation of the Business Models for Innovative, Non-Mature Production Automation Technology

University dissertation from Stockholm : KTH Royal Institute of Technology

Abstract: Manufacturing companies are nowadays facing an unprecedented series of challenges to their survival: global competition and product mass-customization are the shaping forces of tomorrow’s business success. The consequent need for agile and sustainable production solutions is the utmost motivation behind the development of innovative approaches which often are not in line with the state of art. It is well documented that companies fail in recognizing how such disruptively innovative approaches can yield an interesting economic output. This, in turn, enhances the risk of leaving the aforementioned promising technologies conceptually and practically underdeveloped.  In the field of automatic production systems the Evolvable Production System paradigm proposes modular architectures with distributed, autonomous control rather than integral design and hierarchical, centralized control. EPS technology is thus disruptive: it refuses the present paradigm of Engineer to Order in industrial automation by proposing an advanced Configure to Order system development logic.This dissertation investigates the possibility of using the recent sophisticated developments of the concept of Business Model as a holistic analytical tool for the characterization and solution of the issue of bringing disruptive and non-fully mature innovation to proficient application in production environments. In order to purse this objective the main contributions in the relevant literature have been extracted and combined to an original definition of business model able to encompass the aspects deemed critical for the problem. Such a construct is composed of three elements: (1) Value Proposition that describe the features of a technology that generates value for a given customer, (2) the Value Configuration and the (3) Architecture of the Revenue which describe the mechanisms that allows to create and capture such value respectively.   The subsequent work has focused on the EPS paradigm as a specific case of the overall problem. The first step has been a full characterization of the related value proposition through an innovative approach based on a bottom-up decomposition in its elementary components, followed by their aggregation into meaningful value offerings: with reference to the EPS paradigm such an approach has disclosed an overall value proposition composed of six potentially independent value offerings. This collection of Value Offerings has then been used as a basis to generate the EPS business models. In particular for each single offering a possible set of necessary activities and resources has been devised and organized in a coherent value configuration. The resulting creation mechanisms have then been linked among each other following a logical supplier-customer scheme for capturing the value: this allowed establishing the architecture of revenue, last element of the overall production paradigm. Finally the results have been validated in a semi-industrial system developed for the (IDEAS, 2010-2013) project through the individuation of the areas of application of such business models.

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