Understanding The Effect of Supply Chain Complexity in Determining Organisational Responses to Critical Supply Chain Failure – Case Study Analysis of The Rolls-Royce PLC Supply Chain

Davies, Andrew S (2011) Understanding The Effect of Supply Chain Complexity in Determining Organisational Responses to Critical Supply Chain Failure – Case Study Analysis of The Rolls-Royce PLC Supply Chain. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

The study examines the relationship between complexity and organisational responses to critical supply chain failure, it also assess whether the operating principles of high reliability organisations ("HROs") can offer any benefit to commercial organisations in avoiding or mitigating the impact of future critical failure events.

Supply chain performance is a necessity for maintaining competitive advantage within the market place; global firms look to use the supply chain to access global markets, raw materials, scarce skills and cost competitive labour. As supply chain networks become more globalised these open systems become more complex and exposed to failure. The cost of a supply chain failure in operational performance and reputational damage is high.

This study develops a conceptual framework for assessing complexity of a supply chain within the aerospace industry sector, taking into consideration both complexities derived through product manufacturing process and supply chain configuration. Then four case studies of recent critical supply chain failures from the Rolls-Royce Group are applied to this framework and a qualitative structured interview process conducted with those personnel involved in the response to this supply chain failure. An assessment is made from the interview outcomes on whether in the cases reviewed complexity changes the response, how it should influence future responses and whether „HRO‟ principles would have had any value in pre-empting or responding to the failure.

The study indicated that complexity does influence the type of organisational response to a critical supply chain failure; within the case studies reviewed this was particularly pronounced as manufacturing process complexity varied. Though it was noted that this change in response was not a planned or structured decision process arising from an organisational awareness to complexity, but a haphazard response to a critical customer failure. The study scope was limited to the "Rotatives" commodity supply chains. Research indicated that effective adoption of HRO principles in these cases would have avoided or mitigated the customer disruption caused by these critical supply chain failures, the key outcomes were; the group fails to integrate "signals" and "indicators" that might provide an "early warning alarm" about critical supply chain failure, those individuals who are best post positioned to foresee supply chain disruption within the network (though not necessarily „delivery‟ accountable) are not fully utilised to provide this intelligence and problem resolution

methodologies following a critical supply chain failure are not cross-functionally consistent or integrated – impacting the pace and quality of fix and containment in these incidences.

Using complexity to direct a standardised organisational response would allow the Rolls-Royce business to be more proficient in its containment and fix activities in response to a critical supply chain failure; though the limited scope of the case studies to the Rotatives commodity means that the sample of cases reviewed would need to be increased, taking in a broader scope of commodities and "mix" of supply chain complexities thus having sufficient scope of relevance for Rolls-Royce practitioners to adopt. In response to the adoption of HROs principles a number of priority areas were identified. Firstly, the business needs to be able to recognise and "stem" the "incubation period" of critical supply chain failures; this will happen through identification of „lead indicators‟ for supply chains that signify potential pending failure, a process for integrating these lead indicators to act as meaningful intelligence that supply chain practitioners can use to pre-empt supply chain failure in order to take pro-active action to avoid or mitigate customer disruption. Secondly, making use of key roles within the supply chain network that have early visibility of potential hazards in order to increase early feedback of intelligence. Thirdly, adopting a cross-functionally agreed problem resolution methodology for responding to events of critical supply chain failure, ensuring that governance puts pace into a comprehensive cross-functionally agreed set of activities that are robust in ensuring fix and containment at sufficient programme pace.

Item Type: Dissertation (University of Nottingham only)
Keywords: supply chain failure complexity organisation response aerospace rolls-royce
Depositing User: EP, Services
Date Deposited: 11 Nov 2011 09:24
Last Modified: 24 Oct 2016 13:14
URI: http://eprints.nottingham.ac.uk/id/eprint/24751

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