7 : The Dynamics of the Supply Chain

1. 7 : The Dynamics of the Supply Chain I do as little as possible for a firm but as much as I can when I am working for myself Max Gagg Mobilising the Resource Base

2. The Dynamics of the Supply Chain • horizontal and vertical governance • internal resource mobilisation • shirking • sequential spot contracting • managing the supply chain • managing consortia and joint ventures • the dynamics of supply chains Mobilising the Resource Base

3. Horizontal and Vertical Governance • vertical governance • the project chain • horizontal governance • human resources : internal governance • the supply chain : external governance • the project value system Mobilising the Resource Base

4. Horizontal and Vertical Governance in the Project Value System horizontal governance vertical governance supply chain project chain second- tier supplier client principal contract first-tier supplier second-tier supplier third-tier supplier human resources sub-contract second-tier supplier first-tier supplier employment relation

5. Internal Resource Mobilisation • internal resources as human resources • purchase/hire of plant • employment contracts and commercial contracts • contract of service <> contract for service • governance options • asset specificity through learning • uncertainty Mobilising the Resource Base

6. Governance Options • sequential spot contracting • contingent claims contracting • authority relations • collegial relations • governing the employment relation Mobilising the Resource Base

7. Governing the Employment Relation high contingent claims contracting collegial relations asset specificity sequential spot contracting authority relations low low high uncertainty Mobilising the Resource Base

8. Shirking • the shirking problem • purchase of capacity for work, not work done • information advantage lies with employee • measurement difficulties in work done • shirking solutions • spot contracts - piece-work • contingent claims - machine pacing • authority relations - supervision • collegial relations - peer pressure/group bonuses Mobilising the Resource Base

9. The Role of Sequential Spot Contracting • the reliance on sequential spot contracting • casual employment • agency workers • self-employment • gang organisation (the lump) • the failure to evolve to managerial capitalism • the failure to control the work process Mobilising the Resource Base

10. Managing the Supply Chain • external governance of transactions • maximising flexibility • benefiting from specialisation • horizontal governance options • asset specificity • transaction frequency Mobilising the Resource Base

11. External Horizontal Governance Options • spot market sub-contracts • quasi-firm • consortium • joint venture Mobilising the Resource Base

12. Reasons for High Asset Specificity • supplier owns proprietary technology • nominated sub-contractor • high switching costs • temporal specificity • the hold-up problem • regulatory context • local content • technology transfer • governance options Mobilising the Resource Base

13. External Horizontal Governance Options for the Supply Chain transaction frequency high low low spot-market sub-contractors quasi-firm asset specificity consortium joint-venture high

14. Managing Consortia and Joint Ventures • the Jane Austen problem • wealth • status • character • integrated and separated JVs • technology transfer Mobilising the Resource Base

15. The Dynamics of Supply Chains • the problem of execution variability • the ripple effect through the supply chain • the role of partnering • the role of construction planning • construction clusters • the organisational principle • interdependence and information processing Mobilising the Resource Base

16. The Principle of Construction Clusters sub-system level sub-system level construction methods and plans whole building level design detail construction strategy real prices design strategy overall cost plan defined interface

17. The Clustered Project Coalition Structure client’s team primecontractor core team project level design team cluster leaders’ team cluster leader cluster leader designer(‘s) suppliers designer(s) suppliers clusters