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Designing high-value integrated solutions

Designing high-value integrated solutions Dr Andrew Davies Senior Fellow - SPRU, University of Sussex. Structure of presentation. The research High-value integrated solutions Capabilities Organisation. The research. Ericsson Alstom Transport Thales Training & Simulation

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Designing high-value integrated solutions

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  1. Designing high-value integrated solutions Dr Andrew Davies Senior Fellow - SPRU, University of Sussex

  2. Structure of presentation • The research • High-value integrated solutions • Capabilities • Organisation

  3. The research • Ericsson • Alstom Transport • Thales Training & Simulation • Cable & Wireless • WS Atkins • Building Design Partnership

  4. Added value • 'Competitive advantage grows fundamentally out of value a firm is able to create for its buyers that exceeds the firm's cost of creating it', (Michael Porter, 1984) • Cost – perform activities more efficiently • Unique benefit – create greater buyer value • Value chain – the firm • Value stream - the industry

  5. products customer services Traditional value chain • Traditional product-forward thinking • 'throw product over the wall' and add services • Increasing customer demand for services through the product life cycle

  6. 2 YEARS 2 YEARS OPERATIONAL LIFE 28 YEARS Design, manufacture & build rolling stock Cost of building a typical fleet of 70 diesel trains £65m • ‘Total Train Life Management’ services: • maintenance, • renovation, • parts & replacement, • asset management, • new products • Service life generates income worth £200m Services: Alstom

  7. products customer solution services Customer-focused value chain • Begin with desired customer outcome • Design integrated solution to customer needs • Work backwards to the products and services

  8. Strategic engagement Value proposition Operations Integration Adding value: start with the customer CUSTOMERNEED

  9. Integrated solution: Alstom • Strategic engagement • London Underground Northern Line (1995) • Customer request for ‘train availability’ • 96 trains available for service each day for a 20 year period • Value proposition • Alstom’s proposal: build & maintain 106 trains • Integration • Alstom design and build • Operate • Alstom maintain: London Underground operate

  10. DOWNSTREAM Added value UPSTREAM Systems Integration Operations Service Provision Final consumer Manufacture Value stream: moving from manufacturing Ericsson

  11. DOWNSTREAM Added value UPSTREAM Systems Integration Operations Service Provision Final consumer Manufacture Value stream: moving from services WS Atkins

  12. PRODUCTS SERVICES finance Systems integration Operational services Single vendor Multi vendor consultancy Integrated solutions: capabilities customer

  13. Service units Strategic centre Product units Customer-facing units Customer-focused organisation customer

  14. Key management challenges • Control the channel to market • Build integrated solutions capabilities • Create a customer-focused organisation • Manage the customer interface

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