© Graham M Winch Mobilising the Resource Base1 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

© Graham M Winch Mobilising the Resource Base2 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

© Graham M Winch Mobilising the Resource Base3 Horizontal and Vertical Governance vertical governance –the project chain horizontal governance –human resources : internal governance –the supply chain : external governance the project value system

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

© Graham M Winch Mobilising the Resource Base5 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

© Graham M Winch Mobilising the Resource Base6 Governance Options sequential spot contracting contingent claims contracting authority relations collegial relations governing the employment relation

© Graham M Winch Mobilising the Resource Base7 Governing the Employment Relation asset specificity uncertainty low high lowhigh sequential spot contracting collegial relations authority relations contingent claims contracting

© Graham M Winch Mobilising the Resource Base8 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

© Graham M Winch Mobilising the Resource Base9 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

© Graham M Winch Mobilising the Resource Base10 Managing the Supply Chain external governance of transactions maximising flexibility benefiting from specialisation horizontal governance options –asset specificity –transaction frequency

© Graham M Winch Mobilising the Resource Base11 External Horizontal Governance Options spot market sub-contracts quasi-firm consortium joint venture

© Graham M Winch Mobilising the Resource Base12 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

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

© Graham M Winch Mobilising the Resource Base14 Managing Consortia and Joint Ventures the Jane Austen problem –wealth –status –character integrated and separated JVs technology transfer

© Graham M Winch Mobilising the Resource Base15 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

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

© Graham M Winch 17 The Clustered Project Coalition Structure clients team prime contractor cluster leader designer(s) suppliers project level design team cluster leaders team clusters core team