Chara Anastasia Makri and Andy Neely
In recent years manufacturers had to transform their business models in order to respond to the new globalised markets, where the demand for outcome based contracts keeps increasing. While the shift to services can significantly enhance the manufacturer’s competiveness and sales revenues, the long term nature of the contracts and the multiple suppliers and partners involved, are exposing manufacturers to an increased number of operational, performance and financial risks. As a result, manufacturers need to develop a whole new set of capabilities and adapt their organisational structures in order to provide services to their customers in a successful way.
This paper, seeks to understand how confusion over accountabilities can lead to accidents. It is part of the research that Cambridge Service Alliance has been conducting in partnership with BAE Systems and Intelligent Energy, and is sponsored by EPSRC. The ultimate goal is to propose a framework that allows manufacturers to understand fully their responsibilities stemming from the services they provide.
The results suggest that organisations with low levels of hierarchy will need to focus more on clearly defining accountabilities. Organisations with high levels of hierarchy will need to promote a culture of reporting failures. Finally, all servitized manufacturers, operating in safety critical environments, will need to engage customers to help them operate as ‘high-reliability organisations’.