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Mature Cluster: Industry & Supply Chain Dynamics

Mature Cluster: Industry & Supply Chain Dynamics. ONRIS Seminar Nov 4, 2005 Peter Warrian University of Toronto. ONRIS: Mature Clusters. Role of Lead/Anchor Firm Shift from Analytic to Synthetic Knowledge Supply Chain Dynamics External Linkages and Internal Dynamics of Clusters

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Mature Cluster: Industry & Supply Chain Dynamics

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  1. Mature Cluster: Industry & Supply Chain Dynamics ONRIS Seminar Nov 4, 2005 Peter Warrian University of Toronto

  2. ONRIS: Mature Clusters • Role of Lead/Anchor Firm • Shift from Analytic to Synthetic Knowledge • Supply Chain Dynamics • External Linkages and Internal Dynamics of Clusters • Conclusions

  3. Cluster Typology: Mature Industries

  4. Cluster Typology: Mature Industries

  5. Cluster Typology: Mature Industries ON Steel

  6. Role of Lead Firm • Exit: Windsor TDM (International Tool) • Labour Shedding: Mining (Inco) • Implosion: Steel (Stelco)

  7. International Tool: Exit of Leader

  8. Inco/Falconbridge: Shedding Labour

  9. Stelco: Implosion of a Leader • Withdrawal from Analytic Knowledge • Decline and elimination of Stelco Engineering • Applied Product Development • Dofasco as franchiser/value added reseller of Arcelor & NKK technology • Solutions in Steel: Application Development - Know How

  10. Shift from Analytic to Synthetic Knowledge • Patent Data • Dates of Application • Dates of Publication • Steel Industry Patents 1970-2005 • Decline of Stelco Engineering/Steltech 90s

  11. Steel Patent Data by Application Date

  12. ON Steel Knowledge Networks • Withdrawal from Analytic Knowledge • Decline and elimination of Stelco Engineering • Applied Product Development • Dofasco as franchiser/value added reseller of Arcelor & NKK technology • Solutions in Steel: Application Development - Know How

  13. Supply Chains • Asymmetric Knowledge Flows in Supply Chains: Aerospace • Dynamics and Dysfunction in Auto-Steel Supply Chain

  14. Advanced Technology Cluster: Aerospace • Niosi: Dynamics within Supply Chain • OEM aerospace assemblers • Tier 1 & Tier 2 suppliers • Knowledge flows: International circuits of design, procurement • Asymmetry between knowledge flows between firms and local labour pool

  15. Aerospace: Asymmetry of Knowledge Flows

  16. Changing Supply Chain Models Drive Innovation • Toyota Model • Lean Production & JIT • Reduced inventory, cycle times, SPC • Dell Model • Mass Customization • Build-to-Order

  17. Purchasing Programming Marketing Order Bank National Sales Co. Plan Plan Scheduling Schedule Schedule Sequencing Inv. Tier 2 Supplier Tier 1 Supplier Inbound Logistics Body, paint, assemble Outbound Logistics Dealer Customer Typical Order-to-Delivery Process

  18. Auto Industry Build to Order • On average, it takes 40 days to get a car • 30 days for an customer order to actually be inserted in the assembly plant schedule. • 60 days total inventory in the supply chain • Same number as Henry Ford in 1926. • Closer integration of supply chain has increase volatility

  19. Auto Supply Chain Volatility

  20. Dofasco • Benchmarking against Dell: Vanilla Boxes • Mass customization strategy: Platforms • Information content of the steel • Diversity creates key bottleneck in Mills: Slab Specifications & Production • Slabs ‘Designs’: Dimensionality, Physical & Chemical Properties • From 10,000 Designs -> 300 Vanilla Boxes

  21. External Linkages and Internal Dynamics of Clusters • Dynamics of Disaggregation in Cluster • Mining Services • ON Steel

  22. Disaggregation in Mining Services

  23. Algoma • OEM, Tier 1and Specialized Tier 2 Suppliers • Interface with Design Capacities: Safety • Metallurgy: AHSS microstructures

  24. Disaggregation of Auto Steel Cluster • Circuit 1: Global Supply Chain • Auto OEM, Tiers 0.5-1.0, highly specialized Tier 2 firms • Integrated Mill Metallurgy: DFS, STE, AGA • Circuit 2: Local Value Chain • Generalized Tier 2, Tier 3, Stampers • Processing Technology: Service Centres, Processors, Minimills

  25. Conclusions • Cluster Life Cycles • Multiple Policy Objects • Disaggregation • Policy targets are moving and changing

  26. Knowledge Dimensions and Flows in Mature Clusters • Synthetic Knowledge & Innovation • Application of existing sources & combination of knowledge • Interaction between clients & suppliers • Reliance on applied product development • Infrastructure • Problem solving • Sources of talent & recruitment

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