Swedish Foundation for Strategic Research Activity Report 2006

16 – The Swedish Foundation for Strategic Research • Activity Report 2006orientation results from Sweden’s location relative tomajor markets (for certain goods) and to local productionconditions: we have no unfair competitive advantagesof importance to production costs in terms of,for example, raw materials, energy, environment costsand salaries. This has compelled our industry to adopta strategy of focusing on ”special” products commandinga high value added.This can be contrasted with commodity producersin, for example, Eastern Europe or Asia, where processindustry products are sold entirely on the basis of theirspecification. By definition, the product specificationof a commodity completely describes its expectedperformance, which means that goods meeting thesame specification are totally interchangeable. In theSwedish process industry, products are manufacturedwith adapted functional properties. The specificationhere describes only part of the performance foreseen,which means that the product has to be tested in thecustomer’s system before it can be approved or fullyappreciated. Maximum performance in the supplychain is often achieved by adapting the special productto the customer’s process – or by redesigning theprocess in order to maximise benefit from the product.Customer value can thereby increase considerably– despite the fact that the special product may containlargely the same molecules as a certain commodityproduct.Against this background, the working group foundthat the competitiveness of the Swedish process industrylargely rests on three capabilities of a generic andgeneral nature: Controllability, availability and flexibility ofthe production systems.• Flexibility is necessary for a niche strategy to besuccessful. The concept may be thought of as the”width of the road” on which you are about todrive – or in industrial terms, the ability of oneand the same plant unit to manufacture differentproducts.• Controllability is required due to the need to customise.The analogy is how well you can steer avirtual vehicle to shift and keep it in the lanes ofthe ”road” – or the ability of a production unit toswitch between products and/or make a new productwith a given specification with minimal lossesin time and materials.• Availability (and effective logistics) is needed becauseproduction of unique and customised goods meansthat there are few alternative suppliers. It can besymbolised by how far the ”vehicle” can go beforerepair or maintenance becomes necessary – or theability to deliver an approved product within theintended /planned production time.A common feature of all these requirements is that theymust be met by means of a system-wide approach thattakes the complete production system into account.The importance and relevance of these concepts asthe cornerstones of a Foundation effort were put to thetest in an all-day workshop in the spring 2006 on thetheme, ”Research efforts for the Swedish process industry”.Some 20 individually identified, top-level productionmanagers in the forest, steel, mining, pharmaceuticalsand food industries participated, exchanging viewson aspects put forward by the SSF working group aswell as contributing their own experiences and ideasfor the future. All were told in advance that an SSFeffort would be conditional upon a matching contributionof resources (in cash and in kind) by industry.In fact, the meeting itself proved to be an interestingtest: Never before had such a highly qualified andexperienced group of operative production experts metat a ”cross-industry” knowledge forum of this kind.Another 10 specially invited academics representingrelevant research fields participated as well.The strong general agreement among the industrialparticipants almost took the SSF group by surprise,particularly in view of the ambitious aim of theworkshop to look beyond the borders of the individualindustrial branches. Equally strong were industrialcomments to the effect that a research effort, in orderto be productive and successful, ought to be coordinatedwith an initiative for competence development.n ”Neo-classical” experimental announcementAfter reporting to the Board of the Foundation in June2006, the working group was given a mandate, subjectto certain conditions, to further develop its plans for