Build dedicated collaboration networks to find new solutions across company boundaries
Across a diverse range of industries creative collaborations are often a driver to innovation. Openness, transparency and partnership are some of the keys to success.
Collaboration is increasingly important in modern, qualified industrial manufacturing. The innovative industrial processes required to maintain high levels of competitiveness mean that companies and departments must be willing to working together and be proactive in this space.
A recent report* from the World Intellectual Property Organization (WIPO), headquartered in Switzerland, found that innovation is becoming more collaborative. At the beginning of the 2000s scientists produced 64% of scientific papers and inventors were responsible for 54% of patents. In the second half of the 2010s, the comparable figures were 88% and 68%. International collaboration is growing with greater geographical spread and with the development of technologies.
True collaboration networks can see partners, suppliers and customers brainstorming and developing ideas and innovate together
It is becoming increasingly common for suppliers who can contribute in a wide variety of ways to create dedicated collaboration networks to reach the best possible solution.
In the WIPO report, this can be seen in the automotive sector, with collaborations between car makers and the IT industry challenging traditional thinking. New geographical hotspots for innovation have been established.
These networks can often be described as digital ecosystems, where the collaboration between the parties aims to develop new or improved solutions, products or services. The collaborators in these ecosystems can include partners, suppliers and customers.
ABB collaboration in the mining industry
Closer to home, the major mining project Sustainable Underground Mining (SUM) is an example of this. It has been initiated by Swedish mining company LKAB together with ABB, Epiroc, Combitech and now also Sandvik in an open collaboration, with the aim of setting a new world standard for sustainable operations in mining on multiple levels, with 50% increased productivity and completely fossil free mining production as two main goals.
Electrification and automation are two important parameters which ABB focus on to reduce energy and resources consumption, and emissions, in the mining industry. The innovations required to reach the challenging SUM goals cannot be achieved in isolation or company silos. There has to be collective progress for mutual benefit, particularly with regulatory and environmental targets to reach.
Another project, HYBRIT – the Swedish collaboration that aims to develop the world’s first fossil-free steelmaking – is an example of tomorrow’s industry growing today. Here, ABB’s technology contributes and helps to develop the new test facility.
Flexible and fast moving
Another reason for working in new ways is that industrial technical rate of change is faster than ever. At ABB we have technically a lot of expertise to find the solutions that our customers need, however by collaborating with smaller start-ups we increase our flexibility and can test many new technologies in an agile way.
These companies often have short-term investment targets to meet in order to thrive and are working quickly to develop niche technologies for particular industry applications. They are nimble and can act quickly, without the operational, legacy and legal complexity of larger organizations. This agility is essential today and at ABB we are harnessing this approach where possible.
In Sweden, we have established our own growth hub as a collaboration platform with smaller companies. Known as SynerLeap, it ensures access to innovation power in a variety of areas. With the right strategy, it will be a clear win-win situation, where both we and the smaller companies will increase the competitiveness.
Procurement in a new way
Rapid developments have consequences in other areas, such as investment cycles in the industry. Traditionally, you put a lot of energy into making a specification, and then you develop the solution according to it. But let’s say that the plant is ready only two years later, then you stand there with machines based on two-year-old technology. It is no longer acceptable. This is where partnership comes into play.
Procurement processes start to look different in the most innovative industrial companies of the world, where agreements are based on giving the customer the best available technology at any given time. This is a clear trend among the companies that want to be at the forefront and be able to have optimal productivity right from the start. Then it is not enough to develop according to a two-year-old specification – the process and agreements must be more agile to make sure that future technologies and solutions get incorporated during the development of the project. This is a challenge in how to formulate the agreement to contain more parameters then supplying according to a specification.
For the customer this creates a new type of uncertainty, as they must choose partners without knowing exactly what they will receive on delivery. It is a case of daring a little more, sharing more risk and gains.
Confidence and trust are important aspects, although it is also necessary to devise contracts that give security and make it clear that both the customer and the supplier are working towards the same goal.
The starting point should be that the customer receives a world-class delivery, and that all parties gains when the customer achieves their goals. The collaborating suppliers’ profits are dependent on the customer achieving an optimal production process.
Create value for the customer
New technology will open new opportunities for continuous collaboration to optimize processes and productivity. We already have augmented reality and virtual reality solutions for many of our products, and we are implementing different types of artificial intelligence (AI) and analytics solutions.
One example is a product that measures the surface smoothness of cold-rolled steel. By allowing AI to analyze large amounts of data we can refine the already world-leading physical model-based rules algorithms we have and greatly improve the product’s performance. Processing data generated in our own products and systems together with our deep domain knowledge is one of our great strengths.
Partnerships will also become closer and deeper. Anybody who wants to be at the forefront of their industry must start working this way. Ideally, they are already adapting their mindset and actions today.
Three challenges in innovative collaborations:
- Transparency and openness: To cooperate in the best possible way, all parties must be prepared to share certain data and information that may have previously been held within the company. Give and take is required where the common goal is the highest priority.
- Change the organization: Although decision-makers at higher levels in the cooperating companies agree on how the collaboration should take place, the whole organization must be prepared to work in a new way. There has to be a flexibility, as individual roles within a digital ecosystem may change over time.
- New agreements: To ensure that everyone involved has the same goal and a common view of what the optimal solution should mean, there must be formulated control systems in the agreements that cover this.