Value Creation through Engineering Excellence

This chapter provides a contextual background for high value engineering (HVE). It defines the subject area and identifies the key trends of development. The concepts of engineering value chain (EVC) and global engineering networks (GEN) are introduced as an overall framework to bring together the key elements of this book. This introduction sets a scene for updating the existing knowledge on engineering operations for the current business environments by addressing the challenges and opportunities of managing complex engineering networks in an international context.

Scientists, engineers and other technologists have a crucial role to play in the development and deployment of technology for the economic benefit of society, and also to address challenges facing humanity, such as climate change and resource scarcity. In this context, the management of engineering and technology becomes increasingly important. Technological investment and effort needs to be aligned with organisational and wider social needs and aspirations throughout the life cycle from design, through to production and the creation of valuable services. In order to manage engineering and technology, processes are needed to align inputs and activities with desired outputs along the technology management process framework comprising five broad areas of activity. These process areas are elaborated in this chapter, posed as questions that managers, engineers and technologists must address for the effective management of engineering and technological knowledge and resources.

Manufacturing industry has been experiencing dramatic evolutions in last three decades. The boundaries of a manufacturing system are extended from factory towards various types of network relationships. The missions of manufacturing system are transformed and redefined. The output scopes are also expanded into servitisation from traditional product-focused concentration. This chapter, based upon recent observations and analysis in both globalised production and engineering networks, introduces an evolutionary picture of manufacturing system with its engineering function systems. The chapter demonstrates a theoretical framework that highlights both globalised manufacturing and engineering networks have not only very unique structures and configurations but also distinguished strategic capabilities. The chapter suggests that the classical manufacturing strategy and system design theories should be adapted into a contingency strategy to respond to the manufacturing evolutions and treat different systems interdependently. The chapter also seeks to clarify the two distinguished concepts and systems—production and engineering—based on the case analysis, and tries to achieve a synergy between those two different value creation systems on the global platform. The chapter suggests a new conceptual framework for further research on new manufacturing evolution and contingency strategy.

The aim of this chapter is to unpack the concept of value, exploring what it means in a practical setting of engineering services (servitisation) using the service staircase. It consists of two sections. In the first section we will explore firms that are able to create value through services. The second section will create an insight into how the customer can create value through services created for them. Industrial firms are shifting their product-oriented strategies to services with the principal aim to expand their growth and market portfolios. For the customer it can be advantageous to take on advanced services from the service provider, and it will reduce his risk base and reduce costs for optimisation projects. The outcome would be for the customer to focus on its core business. The baseline of working together is to act as network partners instead of suppliers and build relationships instead of transactions. Overall, both the customer and the service provider have the ability to create and capture value through servitised offerings.

This chapter provides insights into how open innovation and global product development can add value in a high value engineering environment, and how the impacts can be monitored and managed effectively. The chapter begins by introducing engineering design in a global context, and how open innovation approaches can support value creation and capture for high value engineering. It then highlights the importance and impact of strategic decision-making in global product development, utilising insights from global engineering companies to provide recommendations for managerial decision support. Finally, building on well-established concepts from performance measurement, a framework to support the development of key performance indicators in global engineering design projects is developed with its application exemplified in industry.

There was a strong movement for multinational corporations (MNCs) from developed countries to establish a transnational configuration of engineering capabilities in other developed countries in the 1980s and 1990s, and in emerging economies in the new millennium. In the last decade, MNCs from emerging countries such as China are trying to move up the value chain by investing in engineering capabilities overseas. This chapter tries to understand such new trends by incorporating the existing literature and practices of international research and development (R&D, as a core part of MNCs’ engineering capabilities), and to contrast them with Chinese MNCs’ current practices of expanding overseas engineering capabilities. We suggest that MNCs from China (and emerging countries) should learn from the experience of their Western counterparts, but more importantly, the unique challenges and opportunities should be considered in managing their international engineering strategies and decisions.

This chapter provides a systematic method to understand the innovation implications of complex engineering systems through value chain simulation. Particularly, we explore the usefulness of agent-based simulation for studying engineering value chains, a field of inquiry that has attracted increasing research interests. Essentially, given the network character of engineering value chains, we discuss why an agent-based simulation approach is particularly suitable for studying engineering value chains by reviewing related literature and discussing the state of the art in the field. A case of using agent-based simulation to study innovation diffusion (i.e. firm–customer relationship) in an engineering value chain is presented to demonstrate the value of the approach in studying high value engineering networks. We finally discuss opportunities and challenges of adopting agent-based simulation for future high value engineering network study.

Recent trend of integrating ICT in engineering solutions has enabled superior engineering capabilities to create high-value-added products and services which lead to the disruption and transformation of traditional engineering industries. This chapter firstly highlights the ICT-driven industrial evolution to demonstrate the importance of ICT for building engineering capabilities in the international context. The typical ICT-enabled advanced manufacturing technologies and models are then introduced, which represent the most advanced engineering, manufacturing and management capabilities in the current business environment. By reviewing the ongoing ICT revolution, this chapter suggests high value engineering strategies for the major economies of the world and indicates the value creating dominance of ICT for engineering sectors in the future.

The aim of this chapter is to introduce the modelling and optimization methods in engineering value chain decision-making and show the effectiveness and advances of solving management problems by information technologies. There are many critical problems related to decision-making along the engineering value chain. Based on the characteristics of a specific problem, different decision methods are developed and applied. In this chapter, we summarize several typical value chain decision problems and related decision methods and introduce the popular decision-making methods based on mathematic models and optimization algorithms. A complex engineering value chain construction decision problem is investigated, a multi-objective model is then developed, and the genetic algorithm-based solution procedure is proposed. Finally, numerical experiment and discussion are conducted to demonstrate the benefit of the method. Further, future development trends in engineering value chain modelling and optimization are illustrated.

This chapter addresses coordination and integration issues of the engineering value chain. A comprehensive review of relevant studies is present, and challenges and some prospect solutions in the new business environment are analyzed in the first section. Then, the coordination issue is explored by considering practical problems involving information coordination and an available-to-promise (ATP)-based modeling, which are put forth in the Sects. 2 and 3. Conclusions are drawn in the Sect. 4

Sustainability is increasingly recognised as a key approach to long-term high value creation along the entire engineering value chain. Engineering for sustainable value creation requires business models that systematically integrate each stage of the engineering value chain to maximise total value creation. There is a need for methods and tools to help companies deliver such sustainable value. This chapter presents a conceptual model of engineering for sustainable value, and a practical tool (i.e. Sustainable Value Analysis Tool) to elicit value uncaptured across the whole life cycle and uncover new value opportunities through a structured and visual approach. The tool has helped a number of engineering companies to innovate business models for sustainable engineering operations in global value networks.

This chapter aims to provide methods and tools for sustainable values creation in the context of high value engineering. First, a sustainable value-driven life cycle design framework is proposed for product and process engineering innovation for sustainability and provides a conceptual linkage with the value-creating activities such as design, production, supply chains, partnerships, and distribution channels. Then, approaches for the integration of ecological assessment (i.e. LCA) with computer-aided product development are proposed as a useful tool to support sustainable value-oriented product and process engineering. The proposed approaches and tools are expected to help bring experts in fields of product and process engineering, industrial management, and ecological assessments to a common vision, and therefore accelerate development of more sustainable products, processes, and business strategies.

Manufacturing-related engineering skill shortages are being experienced in the USA and the UK. In this chapter we compare two models of employer-engagement in the education of 14- to 19-year-olds. The first model, University Technical Colleges (UTC), are supported by the UK government and engage national employers in developing localised solutions to skill demand in science, technology, engineering and mathematics (STEM)-related occupations. The second approach, based in Chicago, USA, is the product of a local coalition of manufacturing firms and organisations, the Chicago Manufacturing Renaissance Council (CMRC). The CMRC has created a manufacturing-oriented training programme at a public high school called Austin Polytechnic Academy (APA). The APA provides specialist engineering-related education within a “normal” school environment. They pull in small- and medium-sized enterprises as partner organisations to offer work-based learning opportunities for APA students through summer internships, job shadowing, mentoring, and eventual job placement. These two examples offer alternative approaches to developing vocational education for the engineering sector. Employer-engagement in the education of young people is shown to add value in the form of exposure to the engineering sector, preparedness for work, potential opportunities for employment and ongoing career progression. This form of value is not identified in traditional academic performance measures and risks undermining the advantage of including businesses in the development of classroom and applied learning structures.

This chapter reviews the general context for policymaking; discusses the logic of economic development; and suggests various types of economic policy with a particular focus on advanced manufacturing and knowledge-intensive services. A range of policy instruments for high value engineering are introduced with an overall framework encompassing social context, physical infrastructure, factors of productions, factors of consumption, and social capital. The chapter also discusses the targeting of policies for high value engineering.