CREATING AND SUSTAINING A SUPPLY NETWORK TO DELIVER ROUTINE AND COMPLEX ONE-OFF AIRPORT INFRASTRUCTURE PROJECTS

Abstract

Over the years, we have seen a growing interest in the use of interorganizational networks as a means to develop and deliver ever more complex products and services. Much of the earlier research was carried out on supply networks — mostly focused on strong lead-manufacturing firms producing mass-produced consumer goods. More recently, attention has been paid to a new model of industrial organization based on systems integration being adopted by many of the world's leading firms, particularly those in high-technology sectors [Hobday et al. (2005)]. The key role of systems integrator is usually played by a prime contractor or a dominant manufacturer. However, there are sectors where structural problems inhibit both the innovation and the development of supply networks and where it is not obvious who should play the systems integrator role. The UK construction sector has long been characterized as fragmented with much of the industry continuing to be structured and constrained by the contracting model that emerged in the early 19th century with the emergence of the professions. These structural problems are often held to contribute to the perceived poor record of innovation in the sector [Winch (1998); Gann et al. (1992)]. This paper analyzes how BAA, a major airport operator and construction client, developed and managed a network of suppliers to deliver both its portfolio of routine capital construction projects and one-off complex mega projects. To achieve its objectives, BAA sets about implementing ways of improving the efficiency of its ongoing capital projects that would enable them to show continuous improvement in performance whilst simultaneously developing the project capabilities required to manage the massive T5 project. These developments enabled BAA to address issues of predictability at the same time as providing an environment that encouraged innovation.