Coordinating an engineer-to-order supply chain: A study of shipbuilding projects
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project activities, use of innovative systems, and disintegration of engineering and production contribute to increase the coordination effort required. Thus, the coordination mechanisms adopted to manage the engineering and production interface need to be compatible with the coordination effort required in a specific project situation, otherwise coordination is not effective. A field study was conducted to examine a number of alternatives to improve coordination. In complex engineering projects involving several companies, a holistic view of the project is missing. Hence, a system approach was used to highlight meaningful changes by showing how the functional structure of each company and its interdependence generate problems that delay the project. Functional silos, inadequate contractual rules, and non-aligned performance measures are attributed to engineering and production not being undertaken within the boundaries of a single company. In practice each project partner is managing its own activities but nobody is managing the project as a whole. A project management team involving members of various companies has been proposed to manage the project jointly, stimulate collaboration and solve conflicts. In addition to that, the implementation of more web-based information technology (IT) has been considered as a way to overcome some of the problems related to the geographical distribution of project partners. The field study provided insights into several factors influencing the effectiveness of coordination that were further examined through a multiple case study. The multiple case study highlighted six contingency factors related to the effect of coordination on lead time, including: integration of engineering and production, size of the project, overlapping engineering and production, innovation of the design/technology, collaboration between project partners, customer change orders and production capability. A number of propositions were generated to explain the effect of these factors on the lead time. The findings of the multiple case study suggest that the integration of engineering and production, as well as the production capability are the two most critical factors influencing coordination. While integration is important for managing engineering changes, production capability is essential for solving downstream problems more quickly. All in all, this research contributes to increase the knowledge on coordination of ETO supply chains by making sense of coordination problems and explaining these problems in the light of the coordination theory. By adopting more interactive coordination mechanisms, it is may be possible to avoid delays and cope with increasing levels of concurrency to reduce the lead time. In order to develop more specific coordination mechanisms, a system view is proposed to show how the functional structure of each company and its interdependence generate problems that delay the project. This research suggests that complex project situations involving change and uncertainty require that both engineering and production activities can quickly adapt. Therefore, the value of synergy between engineering and production on facilitating coordination and minimizing project delays cannot be ignored. Additionally, this research has also several practical implications. First, it provides a useful overview of several SCM concepts that ETO companies can employ. Second, it helps to comprehend the impact of concurrent engineering and production on the occurrence of project delays. Third, a system approach describes how to tackle coordination problems and to identify alternatives to improve coordination. Finally, the research highlights several factors associated with the occurrence of delays in projects carried out in ETO supply chains. All these findings were summarized in a coordination framework combining principles, concepts and methods which can be applied to effectively coordinate ETO supply chains.