Upscaling Supply Chains for the Manufacture of Electric Vehicles
The Business Challenge
This project investigated how to upscale the supply chain of a small hydrogen fuel-celled electric vehicle with particular focus on the resource dependencies between suppliers of drivetrain parts. There is currently huge potential for the widespread use of hydrogen powered vehicles as hydrogen is plentiful, clean and a possibly cost effective fuel. There are however challenges to building hydrogen fuel cell vehicles in large volumes as neither the supply chain, customer base or operating environment is ready. At the time of writing this case Microcab, and SME based in the Midlands, produced small volumes of vehicles in a job-shop set up but had aspirations to produce high volumes to large clients – such as metropolitan car share schemes across Europe and the Far East. The massive increase in volume could be from 5 vehicles to 30,000 vehicles per year in 5 years’ time. The challenge of this project was to see how ready Microcab’s suppliers were to do this.
Action Research and Systems Thinking
By using the PrOH (Process Oriented Holonic) Modelling Methodology a high level systemic overview was created to visualize the systemic success factors of a dynamically changing automotive industry in a predominantly, but rapidly disappearing, internal combustion engine dominated era. The PrOH Modelling Methodology provided a useful reference to understand how change in one systemic success factor, whether it be social, economic, political, technological or otherwise can impact on other systemic success factors in an industry, business and supply chain.
Benefits
A variety of strategic actions and their respective factors were observed and remedied to help managers avoid or reduce critical inter-firm resource dependencies during production up-scaling. As the production volumes increased it was found that a more relational and developmental approach was needed in inter-company relationships. Another interesting finding was how pivotal the role of the key suppliers was in orchestrating and managing the entire supply chain – thus either hindering or helping the niche electric vehicle manufacturer to design and operationalise its core processes.
Resource Dependence Theory (RDT) was used in adbuctive rationalization to analyse and explain the changing inter-organisational interdependencies throughout the planning and execution of up-scaling. This helped the electric vehicle manufacturer to better manage its suppliers and their resource interdependencies.
Further Details
This project produced positive strategic impact for Microcab and findings were published in a leading academic journal.
