High value manufacturing definition report

Part of a project co-funded by the DTI and the CBI, the report presents an initial framework for companies and policy-makers to analyse the issues involved in modern manufacturing and will feed into Manufacturing Forum activities; the Forum is a joint industry and Government-led body responsible for the development and implementation of the Government's Manufacturing Strategy. The HVM report says that while manufacturing has evolved, our understanding of it has not: “Manufacturing firms turn ideas into products and services. In today’s globally competitive landscape manufacturers are inventors, innovators, global supply chain managers and service providers. What was once seen just as production is now production, research, design, and service provision.” But HVMs are not a uniform bunch; there is no single definition, says the report. They can create value in a variety of ways: via unique production processes; high brand recognition; rapid delivery times; or highly customised services. In fact, the report sees HVMs fitting into one four categories (see diagram). Three examples of HVM from the UK are provided by Cadbury Schweppes, Rolls-Royce, and GlaxoSmithKline (GSK). Rolls-Royce, for example, has moved into services via its ‘power by the hour’ approach. And over half its revenues come from its service offerings; it has become a service-led producer.