Unlocking Business Model Innovation through Advanced Manufacturing

The report outlines a three-stage journey for manufacturing companies to transition from point solutions to end-to-end digital infrastructure and finally to innovative business models. It identifies key drivers for this change, including climate change, shifting customer needs, and digital disruption. The document provides five strategies for acceleration—leadership shifts, system-wide collaboration, new success metrics, leveraging core strengths, and pursuing a broader purpose—and illustrates these through case studies from companies like Schneider Electric, Johnson & Johnson, and Ralph Lauren.

• Manufacturing companies are driven to innovate their business models by three primary trends: the need for personalized products and frictionless purchases, the imperative to reach net-zero emissions and create circular business models, and the threat of digital-native entrants.
• The transition to business model innovation occurs in three stages: Stage 1 focuses on 'Point solutions' to boost factory productivity; Stage 2 involves building 'End-to-end digital infrastructure and integration'; and Stage 3 is the realization of 'New business models' that unlock growth at scale.
• Companies in Stage 1 often struggle to scale due to a lack of standardized work processes and technology across factory sites, as well as a deficiency in digital skills within the workforce.
• Stage 2 requires significant upfront investments in technology and human resources that are often difficult to justify using traditional short-term return-on-investment (ROI) metrics.
• To successfully innovate, companies must adopt evolving metrics: ROI for point solutions, capability-based metrics for infrastructure development, and platform-specific metrics (such as interaction volume and monetization) for new business models.
• Advanced manufacturing enables circular business models by allowing the recycling and reuse of resources; for example, Ralph Lauren is investing in solutions to extend the life cycle of natural fibres.
• The report highlights the use of 'Manufacturing as a Service' and distributed manufacturing, such as RIZE's microfactories and Microsoft's at-home manufacturing network, to bring production closer to consumers.
• Case studies demonstrate significant environmental and operational gains: Henkel achieved a 10% reduction in CO2 usage and 16% reduction in total energy consumption, while Schneider Electric saw a 75% increase in labour productivity.
• Tsingtao Brewery used an online customization platform and flexible production to increase revenue by 14% and profit by 28% through a shift toward customized beers.

APA

Srai, J. S., Parker, G., Joglekar, N., Bärring, M., Boehm, J., Enselme, E., Basso, M., Betti, F., & Schönfuß, B. (2022). Unlocking Business Model Innovation through Advanced Manufacturing. World Economic Forum. https://www3.weforum.org/docs/WEF_Unlocking_Business_Model_Innovation_through_Advanced_Manufacturing_2022.pdf

Chicago

Srai, J. S., G. Parker, N. Joglekar, M. Bärring, J. Boehm, E. Enselme, M. Basso, F. Betti, and B. Schönfuß. Unlocking Business Model Innovation through Advanced Manufacturing. World Economic Forum, 2022. https://www3.weforum.org/docs/WEF_Unlocking_Business_Model_Innovation_through_Advanced_Manufacturing_2022.pdf.

Wikipedia

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BibTeX

@techreport{srai2022unlocking, author = {Srai, J. S. and Parker, G. and Joglekar, N. and Bärring, M. and Boehm, J. and Enselme, E. and Basso, M. and Betti, F. and Schönfuß, B.}, title = {{Unlocking Business Model Innovation through Advanced Manufacturing}}, institution = {World Economic Forum}, year = {2022}, month = jan, url = {https://www3.weforum.org/docs/WEF_Unlocking_Business_Model_Innovation_through_Advanced_Manufacturing_2022.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }