TL;DR: By breaking down the train toilet module into its essential competencies and pinpointing local businesses with the required skills, a consultancy created a collaborative network within Birmingham. This consortium secured multimillion-pound tenders from the UK’s network operation and created a local manufacturing cluster, fulfilling the previously missing capability of making train toilet modules locally.
Introduction
In today’s global business landscape, the emphasis on sustainable practices and local sourcing has never been stronger. Companies are increasingly valuing reshoring and the development of sustainable local capacities. This shift was particularly evident when the UK’s train industry faced a unique challenge: sourcing train toilet modules. Historically reliant on imports, especially from Germany, the UK’s Network Rail had to seek alternatives. The issue wasn’t just about sourcing a product; it was about reimagining the supply chain and fostering local manufacturing capabilities. This case study delves into how a consultancy, using the Competence-NPD (New Product Development) Fit concept, transformed a market gap into a thriving opportunity for local manufacturers.
The Challenge: Reshoring Train Toilet Manufacturing
The story begins with the UK’s rail sector, facing a rather peculiar challenge – While the UK had a vast network of trains, a critical component – the train toilet – was exclusively imported, primarily from Germany. This reliance on foreign suppliers was not just a matter of logistics, but also a strategic concern, with a global market size of train toilets exceeding 520 million USD. Strategically, the UK economy needs for locally sourced train toilets – a product non-existent in the UK manufacturing landscape and reducing reliance on European suppliers.
The Shift from Product to Competency
Initially, the “source it locally” agenda seemed bleak. The common belief was that local production was impossible, as no UK companies manufactured train toilets. However, when approaching the problem differently and shifting the focus from the “product” to its core collection of competencies, the landscape transformed. Producing train toilet modules requires specialised design within confined spaces, combining uniquely shaped vanity units, intricate pipework, and integrated electrics. These translate into specific competencies: laser cutting plastics, complex material bending, wiring, injection molding, and specialised design and service expertise. While no single company produced train toilets, multiple local companies possessed the necessary competencies to make them.
Synergy Fuels Innovation: Building a Local Manufacturing Cluster and Fostering a New Industry
Spotting this potential, a consulting firm leveraged a competence–NPD fit platform Collaborative Commerce Marketplace (CCM) and identified a range of companies within a 25-mile radius of Birmingham that collectively had the competencies to manufacture train toilets. By bringing all the required competencies and expertise, the consulting firm took the lead of the consortium to secure the tender from Network Rail, without manufacturing capabilities of its own.
They then orchestrated a consortium of local companies to deliver on the project. And subsequently won the follow-up deals to supply more toilet modules for trains in the UK. The success was twofold: not only did they fulfil the tender, creating UK-based train toilets, but they also established a local manufacturing cluster capable of delivering high-value products, previously non-existent in the local market.
(P.S. The lead consulting company’s model might sound familiar? Yes, that’s the same as Uber or Airbnb – you can be the asset-light platform orchestrating resources without owning those expensive assets…)
Reinventing Manufacturing Through Competence-NPD Fit
This case is a powerful example of Competence-NPD Fit, where the company’s success does not always lay in finding new markets for existing products because that might not be feasible every time, so the Competence-NPD Fit is about getting one step back and looking for their core competencies and moving forward towards a new Product-Market Fit by aligning their competencies with new market opportunities.
This article is the second of a series called Competence-NPD Fit: Re-imagining Disrupting Ventures showcasing how returning to fundamentals can lead to significant business transformation.
If you are interested to know more about the Competence-NPD Fit, check out the following cases:
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