Critical incidents in complex service contracts: Safety challenges and means of prevention
Duration: 17 mins 30 secs
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Detail matters when it comes to ensuring safety in contracted out services provided by manufacturing firms. Chara Makri, a PHD student at the Cambridge Service Alliance talks about her new paper “Critical Incidents in Complex Service Contracts: Safety Challenges and means of prevention” which she co-authored with Professor Andy Neely. Makri interviewed 13 experts from servitized manufacturing companies and their partners, in roles directly linked with safety both managers and engineers. Makri explained: “A critical incident doesn’t necessarily mean that someone gets fatally injured, it could be any case where the service was not properly delivered to the customer, and the main organisation would be responsible for this. There is a transfer of risk to the manufacturer but we found that even though customers transfer the risk they often still want to make the decisions. The new partners need to trust each other to deliver these services properly.”
She continued: “Over 60 per cent of the respondents felt there was confusion over responsibilities. Due to the large number of parties in these contracts it is not always clear who is responsible for performing a certain task. One of the respondents said to us: ‘I don’t think it will ever be fully defined who is accountable and responsible for what’. But they are trying to make people understand more about this. “Just over half of the respondents felt even if they knew what they have to do there is a general lack of control that doesn’t allow them to do so.” Makri sets out three main risks companies faced: control; attitudes within the service network; competencies and training. She goes on to comment: “It is not just one thing that needs to be done to deliver services safely, you need to be aware of all the characteristics within a network and the cultures in the network to drive the right behaviours. We looked at personal cultures; incentive systems; balancing cost and safety. Some sectors are more regulated than others, while in others there are more nominal requirements, so there may be different understandings of safety in different sectors.” The sectors and environments within which companies operate are becoming more demanding, says Makri: “Services are important, and more manufacturers are going to turn to services in the future, but at the same time customers are becoming more demanding. The EU has set ambitious roles for aviation for the next decade, covering capacity, safety, costs and environmental impact. These different targets compete against each other. We see that environments are becoming more demanding.” She concludes by saying that responsibility for safety must be shared across the organisation: “We need more research to be able to say the exact characteristics that will provide servitized manufacturers with high levels of safety. The second insight refers to control, who has the right to make the decisions, and the attitudes and competencies within the whole service network. There is not one single thing an organisations should focus on it is all the little things, and all the individuals need to be aware of how their performance affects the performance of the whole network.” |
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| Created: | 2016-11-09 10:17 |
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| Collection: | Cambridge Service Alliance |
| Publisher: | University of Cambridge |
| Copyright: | Angela Walters |
| Language: | eng (English) |
| Distribution: |
World
(downloadable)
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| Keywords: | Ciritical Incidents; Safety challenges; servitization; |
| Explicit content: | No |
| Abstract: | This study examines how servitized manufacturers can sustain a high safety level in services given the large networks involved in service provision, by conducting 23 exploratory interviews with experts in the field. The results suggest that organisations need to have a clear understanding of three main issues within their network in order to drive the right behaviours and promote a safety culture. These are: a) Duty Holder & Governance – the structures and hierarchies, the legislation under which the partners operate and the procedures that dictate how things are done within the service network; b) Attitudes – individual people and attitudes, organisational incentives and a constant battle between commercial and operations; and c) Competencies – the competency of employees, the training and assessment procedures in place and the technology and systems available. Finally, this study finds that these characteristics are interrelated and are also affected by the wider context in which the partners operate. This context depends not only on the size of each firm, but also on the sector and country in which the partners
operate. |
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