Centre for Strategic Manufacturing Sustainable Collaborative enterprise: Understanding failures, create and distribute value based on contribution (based on the first year research) Joniarto Parung Supervisors : Professor Umit S. Bititci and Dr. Jillian McBride

Centre for Strategic Manufacturing Outline Research design Contributions Background Benefits of collaboration Literatures review and analysis Requirements Proposed model Preliminary Case study Future research

Centre for Strategic Manufacturing Research Problem Literature review Previous study Theory Building Document ation validation Requirements Specification Develop Model Research Design

Centre for Strategic Manufacturing Contributions: The contributions of this research will be: To develop better understanding of the collaboration process and its key success factors To develop a new comprehensive approach in creating and distributing value for collaborative enterprise.

changing of customers expectation Centre for Strategic Manufacturing Globalisation & Regionalisation Advanced Technology Government Policies Increased competition Product Varieties Product cost Short product lifecycles Increased Complexity & Uncertainty New Product & service Performance No time to learn and do by ourselves Collaboration Background (Adapted from KPMG, Netherlands, 1996)

Centre for Strategic Manufacturing Collaboration Benefits (Adapted from Lewis, 1990; Huxham,1996; Parker, 2000; McLaren et al., 2002) 1. Planning and Design Process  reduce time in design  reduce cost  decrease risk of failure  increase capabilities and competences 2. Production Process  increase asset utilisation  reduce time  increase quality  achieve scale economies in production  reduce inventory  increase skill, capabilities and competences 3. Delivery and marketing Process  enhance customer services  increase market share  rapid access to the market  increase order fulfilment time  increase response to the customers’ complaint

Centre for Strategic Manufacturing 70 % of collaborations fail What are the main cause of failures? Existing condition Initial Problem Inter-personal/group relationship Outcome performance organisational Literatures Review Analysis Ambiguous Criteria Among Partners Short-term assessment Literature Review and Analysis

Centre for Strategic Manufacturing Inter-personal/group relationship reason Outcome performance reasonOrganisational and structural reason DESCRIP TION Caused by relational problems among participants in personal or in group Caused by poor outcome performance of the collaboration. Caused by mismatch and dissatisfaction of the participants against organisational structure, system, culture and procedure. MAJOR CAUSES Lack of trust, poor communication, lack of commitment, and little attention is given to nurturing the close working relationship, etc Fail to improve participants’ knowledge, skills & competence; fail to adding new values for products, fail to facilitate new product development, fail to improve productivity, fail to achieve financial benefits, etc Mismatch of corporate culture, Lack of share benefit, due to the unclear criteria and unclear factors in distribute benefit, etc. PAST EXPERI ENCES The collaboration failure between Avon and Liz Claiborne (Segil in Elmuti and Kathawala, 2001). The collaboration failure between KLM and Northwest (Zineldin and Bredenlöw, 2003) The collaboration failure between Volvo and Renault (Bruner and Spekman, 1998) The main causes of failures

Centre for Strategic Manufacturing It is: Relevant Dynamic integrated How to Create? Differentiate collaboration Forms based on “things” to be shared Determine what are the Mutual Value proposition (and its priorities) To the key stakeholders Determine what are the contributions (and its level of importance) Of each participants Need to Create a comprehensive model Requirements : Literatures Review and Analysis

Centre for Strategic Manufacturing Form of Collaboration in term of “what are they shares” Share risks & Benefits Share System Share data & Information Value Proposition to Emplo yee Share holders Custo mers Share risk & benefits Share system Share data & Information How to Share Benefit? Proposed model ….(1) Adapted from PLAN technical Committee Collaboration, April 2002 Cognitive Collaboration Cooperative Collaboration Data exchange

Centre for Strategic Manufacturing Company Company -n Collaborative enterprise customers External factors Customers get better products, better service, at a better price… etc Collaborative enterprise increased Benefits to be shared among participants Value generator as contributor to CE Distribute benefit based on the contribution Share benefits based on companies’ contributions Proposed model ….(2)

Centre for Strategic Manufacturing Value Generator CriterionSub-criterion (instrument for measuring) Weight ing Company’s Effort Operational Performance  Employee Productivity  Cost reduction Time consumed  Management man-hour  Operator man-hour Intellectual Capital Customer capital  Loyalty  Brands/ image Structural Capital  Data bases in support CE  Patents  Substitution level Human Capital  Competence  Experiences Financial Cost Participation cost in CE  Investment cost  Maintenance cost  Production cost Example of value generator

Centre for Strategic Manufacturing Preliminary case study

Developing and sharpen the criterion and value proposition of the model Developing improved data collection and measurement of the participants’ contribution Validation of the model Future Research