Smart toolkit creates and identifies value in supply chains   

By Professor Kieran Fernandes

Research led by Professor Kieran Fernandes at Durham University Business School into the analysis and re-engineering of complex, commercial supply chain networks has realised new business opportunities worth more than £800 million.  

A road-mapping toolkit, developed by the School and adopted by NG Bailey, one of the UK’s leading engineering companies, has had a transformational impact on process and decision making within the business and across supply chains.   

Industry value chain research 

The challenges of creating and capturing value from links in an industry's value chain have been highlighted as one of the key priorities by industry and by the UK Government’s Industrial Strategy.  

This research developed a theoretical concept called a Business Model Architype (BMA) for companies to use to improve their business models by identifying ways to create and capture value from all the links across an industry's supply chain. 

Building on Professor Fernandes’ previous work on technological process innovation, the development of a context-specific BMA provides managers with a structure to connect different components of an organisational business model. These BMAs are more efficient than traditional typology-based approaches that generally impose pre-existing industries' market structures while developing operational strategies.   

Funding from the Centre for Process Innovation (CPI) enabled a feasibility study on the application of the BMA framework to benchmark and develop operational strategies within two pharmaceutical companies. From this the development of a toolkit based on the BMA framework took place.  

Research impact 

The BMA methodology and the toolkit were adopted by a leading UK engineering company called NG Bailey as part of its supply chain re-engineering initiative, ‘Customer of Choice’. Over 300 companies from NG Bailey’s supply chain participated in this initiative. This toolkit allowed managers to benchmark their processes and then select the optimum future strategy based on the taxonomy of a particular industrial sector.   

The entire ‘Customer of Choice’ project team at NG Bailey has been trained in using the BMA toolkit and associated methodology. Professor Fernandes was invited by NG Bailey’s Group Head of Supply Chains and Strategic Projects to join a Foresight Group tasked with the role of overseeing the use of this toolkit.   

The impact of the toolkit, developed as part of the ‘Customer of Choice’ strategic supply chain initiative, has been far-reaching. NG Bailey’s supply chain has used it to benchmark, re-engineer and improve operations, reducing product development time by more than 40% and accessing a wealth of new revenue.   

Find out more

• View Professor Kieran Fernandes’s staff profile 

View full articles in connection with this research:

• Kroh, T., Fernandes K. (2017). Impact of Industry 4.0 on Manufacturing Companies. Industry Report with PwC Deutschland.  
• Goumagias, N., Cabras, I., Fernandes, J. K., Feng, L., Nucciarelli, A., Cowling, P., Devlin, S., and Kudenko, D. (2014). A phylogenetic classification of the video-game industry’s business model ecosystem, in Collaborative Systems for Smart Networked Environments, Springer Berlin Heidelberg, p. 285-294 (Leading International Conference). DOI: 10.1007/978-3-662-44745128  
• Nucciarelli, A., Li, F., Fernandes, K., Goumagias, N., Cabras, I., Devlin, S., Kudenko, D. & Cowling, P. (2017). From value chains to technological platforms: The effects of crowdfunding in the digital game industry. Journal of Business Research, 78: 341-352. DOI: 10.1016/j.jbusres.2016.12.030   
• Fernandes, K., Goumagias, N., Purvis, K. (2016). Biopharmaceuticals Industry Business Model Analysis and Report. Industry Report to the Centre for Process Innovation. R5. Milewski, S., Fernandes, K. & Mount, M. (2015). Exploring technological process innovation from a lifecycle perspective. International Journal of Operations and Production Management 35(9): 1312-1331. DOI: 10.1108/IJOPM-02-2015-0105