14 April 2015

Through-Life Accountability - Managing Complex Services

Product–service systems involve long-term contracts and various suppliers and partners in both the production and operation of the system, resulting in significant risks for servitized manufacturers. However, and especially for organisations operating in safety-critical environments, these risks are substantial since the manufacturer usually retains the through-life management of the product–service system. For example, as a result of the long-term nature of service contracts, and the involvement of multiple organisations in the operation of the system, the main cause of a failure may not always be clear and as a result the manufacturer may face significant liabilities, ranging from reputational damage to claims for financial compensation, even criminal charges.
It is therefore particularly important for servitized manufacturers to have a clear ex ante understanding of where accountability lies in the event of failure of the product–service system throughout its life (through-life accountability), in order to reduce risks and improve safety. Fielder et al., define through-life accountability as “the duty to inform, justify and accept the consequences of decisions and actions taken during the entire lifecycle of assets and associated services”. To this end, the research reported in the paper associated to the blog analyses through-life accountability in a product–service system on the basis of the decisions and actions taken by those involved in the operation of the system, along with the resulting consequences of these decisions and actions. The analysis is based on the official investigation reports of 17 commercial aircraft accidents that occurred globally between 2006 and 2013. We map the decisions and actions taken (or not taken) by those involved in the operation of the system (e.g., airline, air-traffic control and manufacturer) along with the resulting consequences, in order to identify all the actors involved in the accidents along with the most common accident causes.
The results suggest that the cause of most of the accidents in our sample was the result of a small number of human errors, undertaken by a small number of actors. These accidents could have potentially been prevented if the organisations and actors involved had adopted the attributes of, and operated as, high-reliability organisations (HROs). In fact, most of the different categories of human errors identified in the analysis can straightforwardly be linked to the lack of one of the seven attributes of HROs, as these were identified in the relevant literature. Below table presents, in descending order, all the different categories of human errors, mapped against the relevant HROs attributes.

The analysis further reveals two key issues that lead to aircraft accidents: confusion over accountabilities and the inability to question authority, with an overall lack of a culture of reporting failures. This finding provides two key insights. First, it supports our argument that servitized manufacturers and all actors involved in the system need to have a clear ex ante understanding of where accountability lies in a potential failure of the system. Indeed, the suggested mapping methodology can successfully identify and quantify accountability and, therefore, it can provide manufacturers with key insights for improving safety. For example, a detailed mapping of critical failures in a specific product–service system can identify both the main actors that have control over accidents and the most common errors. These can equip manufacturers with key information that can be included in service contracts in order to clearly delegate accountabilities and protect the organisation against liabilities.
Second, it highlights how a manufacturer’s focus should depend on the level of hierarchy within the organisations involved in the system. To be more specific, in cases of high hierarchical organisations the roles, and therefore accountabilities, will be more clearly defined. Thus, incidents will be related to the inability to question authority and report failures. Therefore, the organisation needs to place greater emphasis on promoting flexible structures and shift decision-making to experts as required. In the cases of less hierarchical organisations, confusion over accountabilities is expected to be the main issue, and a balance needs to be found between human and systems redundancy, as this will have the potential to improve system safety. A focus on the remaining attributes is equally important.  An illustration is presented below.
If you want to read more, you can access the full paper here.
by Chara Makri, Cambridge Service Alliance

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