Panta Rhei: Future scenarios for an industry provider

Case study and task

 

The highest quality requires intense focus

In the course of the civil war in Syria, civilians suffered from several gas attacks on 21 August 2013. As a result, the UN initiated an examination of the situation which proved that the war gas sarin was deployed.

The devices that were used to analyse the chemical warfare agents are made by producers of chemical analytics equipment. Various technologies have to be combined in order to build this equipment. Some of the key technologies required include sensor technology, electronics, and micro-structured ducts (“the hardware”) that channel the gas to the sensors. Each of these components has to be of the highest quality if the equipment is to work at its full potential. That’s why manufacturers opt only for the best suppliers.

And the best suppliers are those who are focused on a clearly defined technology and are a global market leader in thier sector. They’re usually far back in the supply chain but are of enormous significance for the equipment’s quality.

 

A focus on “hardware“

One of these component suppliers is LIQGAS INC. The CEO and owner, Mr. Bauer, is a mechanical engineer. LIQGAS is a provider of technological services for the industry and helps its clients work with state-of-the-art materials. This is achieved by ‘thermic finishing’. In other words, by thermally combining various components (which may be made from different materials) to form a complex overall structure (hardware).

LIQGAS’ core competence is engineering and finishing the hardware. This engineering expertise includes the design of three-dimensional structures, the selection of materials, and the decision over which materials or material combinations are to be used at certain parts of the 3D structure (i.e. what metallic alloys and/or ceramics at what location).

LIQGAS’ role in the production process is to build the hardware. However, upstream and downstream activities that are not part of its core competencies are outsourced and handled by a “main contractor”.

The construction aspect is particularly challenging because it requires considerable expertise in connecting material combinations. This is also where LIQGAS’ unique selling point comes in handy: the company has decades of experience in joining materials including metal-to-metal and metal-to-ceramics-compounds.

LIQGAS’s specific expertise is in the design and production of highly complex and yet robust 3D channel structures. The structures (or hardware) can guide liquid and/or gases with great precision. 3D structures just a few millimetres in size can withstand long-term temperature and pressure fluctuations and exposure to acids, all without the structures being altered or the equipment failing. 

In short, equipment jointed by LIQGAS will not break apart in a hostile environment.

That’s why its metal-to-metal or metal-to-ceramics 3D structures are used where fully-functional equipment is of utmost importance, for example for satellites in space or in war zones.

Image 1: Photo of a component made from metal/ceramics compound.

 

Image 2: Photo of a component made with narrow and heat resistant canal structures.

 

Process and value creation


LIQGAS’ processes are planned using the following process:

Image 3: LIQGAS’s core process


The customer provides LIQGAS with a drawing of the finished equipment. Based on this, LIQGAS designs the “hardware“ using its expertise on the characteristics and properties of metals and ceramics. Without leaving the building, the design is then passed on to the “materials combination“ industrial service.

This is where LIQGAS’ unique specialty can be found: after decades of experience, LIQGAS’ knowledge makes it very difficult to copy its fusion of materials at a similarly high quality.

Finally, the customer receives the “hardware” for further processing.

For the customer, this process has the following benefits:



Image 3: LIQGAS’ Value Proposition Canvas based on (Osterwalder, Pigneur, Smith, Bernarda, & Papadakos, 2014). The square contains LIQGAS’ Value Propositions (Gain Creators & Pain Relievers), which are directly aligned to meet the requirements of LIQGAS’ customers (Gains & Pains)

LIQGAS’ customers want to be able to supply their own clients with the highest quality, function-optimised equipment. If the equipment functions well, a high profit margin is guaranteed for both LIQGAS AG and its clients.

The future

Enjoying a cup of coffee and the beautiful weather on a late summer’s day, you and Mr. Bauer are talking about the changing world: whether in a political, social, economic or technological context, Heraclitus’s famous words “panta rhei“ seems to apply everywhere.

For companies with a closely defined focus  - like Mr. Bauer’s - changing environments can be a critical issue.  If the business proposition loses value in the future, perhaps as the result of an emerging substitute technology, LIQGAS will have to respond quickly to survive.

However, you explain, changes can also be opportunities! Mr. Bauer is particularly interested in changes related to the technological environment and explains how he intends to use e-mobility as a potential growth factor for his enterprise: “The key element is the batteries, which have to be kept at constant temperatures. We are able to supply proper 3D structures in our components, which feature ideal tempering channels. I’m sure this market will be growing!”

You respond: “Indeed, e-mobility is a major trend. But I’m sure there are many other trends that represent an opportunity for you, like…”

You start thinking; the future is hard to predict.  It’s even harder when you’re considering future scenarios for future industries. Is it impossible?

Thankfully, from a methodological perspective, there is help. Futurology relies for example on trend analysis. We may, for instance, expect the “urbanisation” trend in social environments to continue. In a technological context, trends like “digitalisation”, “miniaturisation”, and so on will continue to change the world. This is a good starting point for developing scenarios, which can facilitate LIQGAS’ adjustment to a changing environment.

Remember: other companies plan on a similar basis.  How “unique” is a business’ Value Proposition? Will that unique feature be so special in future? Are there any potential partnerships?

The task

Use creative techniques to identify trends that might influence products which contain combined materials of various metals or ceramics, which ….
• lead to sophisticated, high-functioning structures by combining various simple, individual components
• … are used as “hardware” for devices and equipment that potentially do not yet exist
• …. function with high-precision
• … are both resilient and robust.

In order to complete this task, proceed as follows:
1. Create the current Value Proposition Canvas again for yourself and be sure to understand it.  If you need more information, please ask your coach.
2. Identfy trends by using creativity techniques and analyse these trends from a variety of situtational contexts.
3. Define some trends, and develop scenarios for them by using the Value Proposition Canvas.
4. Consider some new business activities for LIQGAS AG. Use either the Business Model Canvas or the Value Proposition Canvas to justify them. Please don’t forget to complete the “strategic partnerships“ box.

Ask your coach if you are stuck and don’t know how to proceed. Only through communication and discussion can you advance both yourself and LIQGAS.