Knowledge sharing in Turnaround Maintenance
2
Acknowledgement
Knowledge sharing in Turnaround Maintenance
An agency theory perspective on knowledge sharing between Steel
Manufacturing Plant and external contractors
PUBLIC VERSION
19 January 2016
MSc thesis, MSc Technology and Operations Management, University of Groningen
MSc thesis, MSc Operations and Supply Chain Management, Newcastle University
Author L. (Lennard) Hofmeijer
Student number S2507145 (RUG) & B4061933 (NUBS)
Address Schoterweg 24
2021HM Haarlem
E-mail l.hofmeijer@student.rug.nl
Supervisor J. (Jasper) Veldman J. (Jingxin) Dong J. (Jaap) van Dalen
Institution University of Groningen Newcastle University Tata Steel IJmuiden
Address Nettelbosje 2 9747 AE Groningen
5 Barack Road
Newcastle upon Tyne, NE1 4SE
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Abstract
Extent research on knowledge sharing in the context of projects mainly focused on the impact that social factors have on projects in industries like construction and product development, but none of the studies has explored what factors influence knowledge sharing in projects with characteristics as: technical environment, short lead time, dynamic work scope, reoccurring nature and a high level of outsourcing as in Turnaround Maintenance projects. Therefore, the aim of this research is to provide an understanding on what factors influence effective knowledge sharing from the external contractors towards the Steel Manufacturing Plant in Turnaround Maintenance projects and ultimately how this affects the performance of these projects. By interviewing Turnaround Maintenance experts, this research reveals how the Agency attributes trigger knowledge sharing from the external contractor towards the Steel Manufacturing Plant. But also how knowledge sharing between the external contractor and Steel Manufacturing Plant decreases information asymmetry, goal conflict and outcome uncertainty and improves task programmability for the Steel Manufacturing Plant. As a result decreasing the chance for Moral hazard and Adverse selection problems. Besides, additional factors are revealed that influence knowledge sharing from the external contractor towards the Steel Manufacturing Plant and vice versa and furthermore reveals the direct and indirect effect of knowledge sharing on Turnaround Maintenance performance. Ultimately, this research is a modest attempt in filling the intellectual void relating to inter-organizational knowledge sharing in turnaround maintenance projects and directly contributes to the scarce amount of literature that is available about Turnaround Maintenance projects. Furthermore, from a managerial perspective this research provides insights on the difficulties in managing knowledge from external contractors to the Steel Manufacturing Plant and vice versa and its effect on Turnaround Maintenance performance.
Keywords: Turnaround Maintenance, Steel Manufacturing Plant, Knowledge sharing, Agency theory,
Index
List of abbreviations ... 7
List of figures and tables ... 8
1 Introduction ... 9
2 Theoretical background ... 12
2.1 Turnaround Maintenance and its characteristics ... 12
2.2 The involvement of external contractors in TAM projects ... 14
2.3 Knowledge sharing and knowledge ... 15
2.3.1 Knowledge sharing in projects and outsourcing relationships ... 16
2.3.2 Knowledge sharing in TAM projects ... 17
2.4 Agency theory ... 19
2.4.1 Linking Agency attributes with knowledge sharing ... 23
2.5 Conceptual model and research questions ... 24
3 Methodology ... 26
3.1 Tata Steel Mainland Europe ... 26
3.2 Case selection ... 26
3.3 Data collection ... 29
3.4 Data analysis ... 33
4 Results ... 35
4.1 Turnaround Maintenance and knowledge sharing at Tata Steel ... 35
4.2 The link between Agency attributes and knowledge sharing ... 42
4.2.1 Information asymmetry ... 42
4.2.2 Goal conflict ... 43
4.2.3 Risk aversion ... 44
4.2.4 Length of the relationship ... 45
4.2.5 Task programmability ... 45
4.2.6 Outcome uncertainty ... 46
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5.1.2 Link between Moral hazard and Adverse selection on knowledge sharing ... 59
5.1.3 Other factors that influence knowledge sharing ... 60
5.1.4 Link between TAM performance and knowledge sharing ... 61
5.2 Contribution to theory ... 63
5.3 Contribution to practice ... 63
5.4 Research limitations and future research directions ... 64
6 Conclusion ... 65
List of abbreviations
EPC Engineering Procurement Construction
HSE Health Safety and Environment
SM Shutdown manager
SMP Steel Manufacturing Plant
SV Supervisor
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List of figures and tables
List of tables
Table 1 Differences between EPC and TAM project... 14
Table 2 Overview of the selected cases ... 28
Table 3 Description and specifications of interviewees ... 29
Table 4 Overview different cases and interviewees ... 32
Table 5 Explanation degree of knowledge sharing ... 40
Table 6 Overview of the knowledge sharing events that directly affected performance ... 52
Table 7 Overview of the knowledge sharing events that indirectly affected performance ... 54
Table 8 Overview TAM characteristics and knowledge sharing ... 62
List of figures Figure 1 Knowledge Management processes (Davenport & Prusak, 1998) ... 15
Figure 2 Distinction between Explicit and Tacit knowledge in TAM ... 18
Figure 3 Visualisation of Agency theory derived and adjusted from (Tiessen & Waterhouse, 1983) ... 20
Figure 4 Conceptual model ... 25
Figure 5 Case study design ... 26
Figure 6 Coding list (excerpt from Appendix D) ... 33
Figure 7 Handing over and alignment with production ... 35
Figure 8 Scope development ... 36
Figure 9 Degree of knowledge sharing per case ... 40
Figure 10 Summary of the knowledge sharing process for each phase of the turnaround ... 41
Figure 11 Presence Agency attributes for all cases... 42
Figure 12 Interrelations agency attributes and knowledge sharing ... 47
1 Introduction
In 2013 the European-commission published their report about the European steel industry that shows that the manufacturing activity and associated steel demand is 27% below pre-crisis level, mainly due to the competition from non-EU country producers. As a result, several production sites have closed or reduced output with corresponding job losses as a result (European commision, 2013). In this competitive global market, effectively planning and managing maintenance activities is becoming an ever more critical business process that is capable of differentiating the excellent performers from those who are merely capable (Lenahan, 2006). In challenging these difficulties, Turnaround Maintenance plays an important role in maintaining consistent means of production delivered by reliable equipment. Because of the complexity and size of these projects, the successful accomplishment of this event in terms of quality and cost is vital to the profitability of the plant and to its competitive advantage (Duffuaa & Ben Daya, 2004).
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However, in the face of the fluctuating economic climate and global competition there is a need for long term benefits that strengthen the competitive advantage of Steel Manufacturing Plants (European commision, 2013). The general tendency is that the main source of competitive advantage has moved from capacity to efficient production to the utilization and leverage of knowledge and intellectual capital (Fey & Furu, 2008; Kulkarni, Ravindran, & Freeze, 2007). Knowledge sharing is considered as the critical process in gaining these competitive advantages (Nooshinfard & Nemati-Anaraki, 2014; Wickramasinghe & Widyaratne, 2012). There has been much research about factors that influence knowledge sharing in regular types of projects as in construction and product development (Bresnen, Edelman, Newell, & Scarbrough, 2003; Fernie, Green, Weller, & Newcombe, 2003; Koskinen, Pihlanto, & Vanharanta, 2003; Lee, 2001). Most of these studies explore the effect of social factors like mutual trust, face-to-face communication, language and goal alignment on the degree of knowledge sharing between two parties. However, it is still unknown what factors influence knowledge sharing in projects with characteristics as: a technical environment, short lead time, dynamic work scope, reoccurring nature and a high level of outsourcing as in Turnaround Maintenance projects. Specific research is required because TAM projects, as a result of their unique characteristics, have their own demand considering knowledge sharing. For instance because of their reoccurring nature it is essential to share knowledge in evaluation meetings to become better after every turnaround (Amaran et al., 2015; Lenahan, 2006). Furthermore, because of the high level of outsourcing (Duffuaa & Ben Daya, 2004), actively sharing knowledge with the external contractor is critical for turnaround success. Gaining an understanding about what factors influence the effective knowledge sharing in Turnaround Maintenance is necessary as knowledge sharing produces long term benefits that strengthens the competitive advantage and sustainability of organizations and might contribute in strengthening the competitive advantage of Steel Manufacturing Plants (SMP`s) in competing non-EU SMP`s. Hence, there is a need to gain understanding about knowledge sharing in the context of TAM projects and how effective knowledge sharing might contribute in the challenges that the EU Steel Industry is facing nowadays. Therefore, the aim of this research is to provide an understanding on what factors influence effective knowledge sharing from the external contractors towards the Steel Manufacturing Plant in TAM projects and ultimately how this affects the performance of these projects.
The methodology to achieve the aim of this research consists of an explorative case study that will be conducted at a large European SMP. Multiple TAM projects will be analysed by means of semi-structured interviews and analysis of secondary data. By answering the research question, this study makes the following contributions to theory and practice: first of all, past studies on knowledge sharing in the context of projects mainly focus on the impact that social factors have on projects in industries like construction and product development (Bresnen, Edelman, Newell, & Scarbrough, 2003; Fernie, Green, Weller, & Newcombe, 2003; Koskinen, Pihlanto, & Vanharanta, 2003; Lee, 2001), but none of the studies has explored what factors influence knowledge sharing in projects with characteristics as: technical environment, short lead time, dynamic work scope, reoccurring nature and a high level of outsourcing as in Turnaround Maintenance projects. As a result of these unique characteristics, TAM projects have their own demand in knowledge sharing and specific research is required. The present study is a modest attempt in filling the intellectual void relating to inter-organizational knowledge sharing in turnaround maintenance projects and directly contributes to the scarce amount of literature and empirical research that is available about TAM projects (Ghazali et al., 2009; Pokharel & Jioa, 2008). Second, in current literature there are relatively few publications that discuss the link between Agency theory and knowledge sharing (Björkman, Barner-rasmussen, & Li, 2004); (Fey & Furu, 2008), in particular in the project context. This study is one of the first that explores knowledge sharing in the context of projects through the lens of Agency theory. Finally, from a managerial perspective this research will directly contribute to practice by providing insights on the difficulties in managing knowledge between SMP and external contractors in TAM projects and its effect on TAM performance.
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2 Theoretical background
The aim of this theoretical background is twofold. First, to gain some general understanding about Turnaround Maintenance (TAM) and the involvement of third parties in TAM. Second, to develop an conceptual framework that provides an overview of Agency attributes that influence knowledge sharing in TAM and, subsequently, how knowledge sharing between both parties influences TAM performance objectives. The conceptual framework can then be validated and complemented through an empirical study in the next phase of this research. In the following paragraphs these two goals of the literature study will be further elaborated.
2.1 Turnaround Maintenance and its characteristics
Turnaround maintenance (TAM) is a periodic maintenance activity in which plants are shut down to allow for inspections, repairs, replacements and overhauls that can be carried out only when the assets (plant facilities) are taken out of service (Duffuaa & Ben Daya, 2004). TAM projects play an important role in maintaining consistent means of production delivered by reliable equipment and a direct connection can be drawn between its successful accomplishment and the profitability of the plant (Lenahan, 2006). The turnaround itself is normally considered to be an engineering event of relatively short duration, but it is only one segment of a cyclical process with four phases – initiation, preparation, execution and termination, each of which has its own specific set of activities (Lenahan, 2006; Duffuaa & Ben Daya, 2004):
o Phase 1: Initiation. Period during which turnaround parameters are defined, core personnel appointed and basic data organized. Can be spread over a period of months;
o Phase 2: Preparation. This is a very important phase of the whole process. The successful execution of TAM hinges on good preparation. The most important activity in this phase is the compilation of the work list which is the basis of the whole planning process;
o Phase 3: Execution. Normally 2 to 8 week period when planned work is carried out and monitored against the event schedule, duration, cost, quality and safety requirements. The emphasis during this phase is on effective control of work;
o Phase 4: Termination. In this phase, the TAM project is closed and performance is reviewed to document lessons learned that will benefit future events.
A successful turnaround is one where safety, environmental compliance, cost and duration are within expectations, and benchmark performance is achieved. TAM success is measured by TAM performance objectives that gauge the effectiveness of the project and indicate if activities are performed as they should (Levitt, 2004). The main TAM performance objectives are:
Lead-time objective. The total time spent in TAM projects should be within the time originally budgeted for the project to be considered successful (Obiajunwa, 2012; Lenahan, 2006). Keeping TAM projects in time is very difficult because of the scope changes that are a common feature in TAM projects;
Effectiveness objective. Effectiveness is considered as the degree to which all goals originally set for the turnaround have been achieved (Pinto & Slevin, 1987; Obiajunwa, 2012). Most commonly effectiveness in turnarounds is expressed as the degree to which the scope of work has been achieved.
Important in managing and controlling the turnaround is that these performance objectives are interrelated and might affect each other’s performance. For instance in the case of an accident a part of the maintenance activities will be temporarily stopped in order to help the injured person. However, stopping the maintenance activities will result in a deviation of the planned lead-time. In order to prevent this the shutdown manager might make the decision of skipping a part of the intended maintenance activities and by that not achieving the effectiveness objective that was originally set for the turnaround. To accomplish these performance objectives, turnarounds require careful planning and scheduling. These duties are typically performed by skilled and experienced personnel utilizing proven practices that integrate and minimize the work scope (Motylenski, 2003).
A common mistake in managing TAM projects is to classify the project as an Engineering, Procurement, Construction project (EPC) and apply an EPC centric project management methodology (Ertl, 2005). A TAM project differs from an EPC project because of the large fluctuations in scope compared to other engineering projects (Oliver, 2001; Ertl, 2005). Additionally, the TAM planning schedules are compressed (Lenahan, 2006; Levitt, 2004) and hence there may be little or no opportunity to correct the critical path by accelerating the schedule. The following table provides an overview of the differences between a regular EPC project and TAM projects (Ertl, 2005):
EPC project TAM project
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4 Projects are organized around cost codes /
commodities
Turnarounds are work order based
5 Manpower staffing requirements usually do
not change during project execution
Manpower staffing requirements change during execution due to scope fluctuations (from discovery work).
6 Project schedules are uncompressed.
Schedule acceleration can be used to correct slippages in the critical path.
Turnaround schedules are compressed. There may be little or no opportunity to correct the critical path by accelerating the schedule
Table 1 Differences between EPC and TAM project
2.2 The involvement of external contractors in TAM projects
Although SMP`s possess a wide range of expertise and knowledge (e.g. fabrication, engineering, R&D knowledge), they usually not have all the required knowledge and enough in-house manpower to handle TAM projects on their own. A large part of the activities is outsourced to carry out TAM projects through external contractors. The required number of TAM workers is usually large and sometimes involves thousands of external workers (Hadidi & Khater, 2015). In the context of TAM projects ‘contractors’ are companies that specialize in performing some or all of the activities involved in an overhaul. Lenahan (2006) states that the contractors may be very specialized (e.g. an electronics company servicing a digital control system), multi-skilled (able to carry out mechanical, fabrication and civil work), specialize in the total planning and execution of events, or perform rather simple tasks such as cleaning.
The added expertise of the contractor in TAM projects is invaluable in keeping expectations in line with reality (Levitt, 2004). External contractors possess a high level of construction and maintenance expertise because of their specialized training, in-depth knowledge of materials, methods, and local practice. Contractors are in the best position to provide project and contractor specific information on the availability and limitations of resources in terms of cost, performance and access (Song, Asce, Mohamed, & Abourizk, 2009). Additionally, Pulaski & Horman (2005) state that by engaging a contractor in the early stage of a project in general, the contractor can make inputs on a continuous basis, which has a direct impact on their own performance during the project. This arrangement also gives external contractors adequate time in better planning and preparing their activities, increasing the chance that the turnaround will be completed within lead-time.
transfers knowledge and expertise to the external contractor(s) and not vice versa, missing the benefits of bidirectional knowledge sharing such as cost and lead-time reduction (Shelbourn et al., 2006). The importance of knowledge sharing and the types of knowledge that are being shared in Turnaround Maintenance will be further elaborated in the upcoming sections.
2.3 Knowledge sharing and knowledge
Managing knowledge effectively is critical to the survival and advance of a company, especially in project-based operations (Kivrak, Arslan, Dikmen, & Birgonul, 2008) such as Turnaround Maintenance. The effective management of knowledge can reduce project time and cost, improve quality, and provide a major source of competitive advantage in today`s knowledge-based economy (Shelbourn et al., 2006). Managing knowledge or Knowledge Management (KM) is the process of creating value from an organizations intangible assets (Davenport & Prusak, 1998) and deals with the generation, codification, sharing and application of organizational knowledge, as illustrated in figure 1, below.
Figure 1 Knowledge Management processes (Davenport & Prusak, 1998)
From this classification knowledge sharing is considered to be the most important process as it is the heart of KM and the vast majority of knowledge management initiatives depends upon it (Nooshinfard & Nemati-Anaraki, 2014; Wickramasinghe & Widyaratne, 2012). The sharing of knowledge can be defined as the dissemination of information and knowledge throughout and between organizations (Wai Ling, Sandhu, & Kishore Jain, 2009). McDermot and O’Dell (2001) describe the process of “knowledge sharing” as enabling sharers to guide sharers’ thinking and/or using their insights to assist sharers to examine their own situations. Although the literature on knowledge management presents a range of definitions and perspectives on knowledge sharing, in this research we intend to follow the
Generation Codification Sharing Application
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The literature on knowledge sharing suggests that knowledge can be described and categorized in many different ways (Wagner & Buko, 2005). The distinction between ‘explicit knowledge’ and ‘tacit knowledge’ is one of the most commonly used typologies. Explicit knowledge is formalized and codified, and is sometimes referred to as know-what (Brown & Duguid, 1991). It is therefore fairly easy to identify, store, and retrieve. Explicit knowledge is found in: databases, memos, notes and documents (Botha, Kourie, & Snyman, 2008). On the contrary, tacit knowledge refers to intuitive, hard to define knowledge that is largely experience based. Because of this, tacit knowledge is often context dependent and personal in nature. Tacit knowledge is found in the minds of human stakeholders and it includes cultural beliefs, values, attitudes, mental models, as well as skills, capabilities and expertise (Botha et al., 2008).
Knowledge-sharing in the context of projects faces many challenges. This will be further elaborated in the next section.
2.3.1 Knowledge sharing in projects and outsourcing relationships
As projects differ substantially from one another and significant discontinuities in flows of personnel, materials and information are created, it becomes difficult to develop steady state routines that maximise the flow of knowledge and the capture of learning from one project to the next (Bresnen et al., 2003). Although early debates in knowledge sharing tended to revolve around the use of information and communication technologies, the limitations of information of an IT-based view of knowledge capture and codification have long been emphasized (Fahey & Prusak, 1998; Cole-Gomolski, 1997). Instead attention has shifted towards examining the role of social aspects on the diffusion of knowledge. In this approach emphasis is placed upon exploring the important factors that act either as enablers or as barriers in the project context. The study of Fernie et al., (2003) argues that tacit knowledge is embedded in a specific social context and that understanding of the ‘host’ and ‘receiver’ context becomes central to any knowledge sharing-endeavour. In order to gain such contextual understanding dialectic debates and re-contextualisation of the knowledge play a crucial role in sharing tacit knowledge with other projects. The study of Koskinen et al., (2003) explores what kind of social engagements provide the proper work context for tacit knowledge sharing to take place. The results of their study suggest that face-to-face interaction, language, mutual trust and proximity are factors which affect the grade of tacit knowledge sharing in project work.
however to accomplish this the abovementioned social engagements and enablers need to be present (Fernie et al., 2003; Koskinen, Pihlanto, & Vanharanta, 2003).
Although most of the studies focus on the sharing of tacit knowledge the study of Lee (2001) explores what factors influence both explicit and tacit knowledge sharing in outsourcing relationships. He argues that knowledge sharing success in these relationships depends upon understanding the organizational context and thus that knowledge cannot easily be transferred among organizations with different cultures, structures and goals. Therefore for successful knowledge sharing in outsourcing relationships both parties should have a common vision and goals as well as belief that their partners will not act opportunistically (Lee, 2001).
From previous research about knowledge sharing in the context of projects we gained understanding about the effect social factors have in that specific context. However, as we already argued previously in this research, TAM projects are unique in its nature and as a result have their own demand considering knowledge sharing. Therefore we discuss knowledge sharing in TAM projects separately in the following section.
2.3.2 Knowledge sharing in TAM projects
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But due to their unique nature and demand, TAM projects face their own challenges in the process of knowledge sharing. First of all, Turnaround Maintenance projects are conducted in changing technical environments as the maintenance jobs and the context of the job may have changed compared to the previous turnaround because of malfunctions, modifications and deterioration of the plant or installation (Levitt, 2004; Lenahan, 2006). Besides, the circumstances during a turnaround are sometimes hot and dirty and hides potential safety hazards that might harm people, property and the environment (Hadidi & Khater, 2015; Lenahan, 2006). The knowledge sharing process must be adjusted to these changing and sometimes hazardous circumstances. For instance by providing the external contractor up-to-date knowledge about the installation or knowledge about the context of the job that has changed compared to the previous turnaround. Secondly, external contractors play a significant role in TAM projects due to the size of work that has to be accomplished in a short period of time and their experience and professionalism that they bring in in order to successfully execute the turnaround (Duffuaa & Ben Daya, 2004). This feature of a high level of outsourcing consequently means that actively sharing knowledge with the external contractor is considered as critical for turnaround success. Besides, inter-organizational knowledge sharing faces its own challenges like partners with differing organizational visions and goals that might hinder the effective knowledge sharing (Lee, 2001; Eisenhardt, 1989a). Thirdly, due to the short lead time of the turnaround, planning schedules are compressed and there may be little opportunity to correct the critical path by accelerating the schedule (Ertl, 2005) though this would have been an option in other projects like EPC. Therefore, the successful execution of the turnaround hinges on good preparation of the activities (Lenahan, 2006; Duffuaa & Ben Daya, 2004) and because of that most of the knowledge sharing needs to take place in the preparation phase of the project. Besides, knowledge shared in the preparation phase needs to be detailed, complete and of the right quality to ensure a successful execution phase. Fourthly, due to the reoccurring nature of the turnarounds the work package of a TAM project consist for a large part out of reoccurring maintenance jobs (Amaran et al., 2015; Lenahan, 2006). In order to obtain a learning curve for these jobs it is essential to share knowledge afterwards during evaluation-meetings to capture the lessons learned and think of improvements for the next turnaround. Finally, due to ongoing inspections, operations may continue to identify potential
Required knowledge in a turnaround
Explicit knowledge (codified and documented) Plans
Drawings
Work instructions
Procedures
Tacit knowledge (Stored in the mind of people) Experience
Skills
Expertise
scope for the turnaround until the last minute (Ertl, 2005), which results in an ongoing uncertainty regarding the costing, resource needs and duration of the event (Lenahan, 2006). Actively sharing knowledge is critical to reduce the uncertainties that evolve from the scope fluctuations as input is obtained from for example external contractors about the costing, resource needs and duration of a certain task.
Although we do know from previous research how social factors influence knowledge sharing in the context of projects like EPC, it is still unknown what factors influence knowledge sharing in projects with characteristics as: technical environment, short lead time, dynamic work scope, reoccurring nature and a high level of outsourcing as in Turnaround Maintenance projects. However, what we do know is that external contractors play a significant role in TAM (Duffuaa & Ben Daya, 2004) and that their performance has a direct impact on the overall performance of the TAM project (Hadidi & Khater, 2015). Next to this, we also know what potential benefits knowledge sharing has for business performance (Haas & Hansen, 2007). That is why the knowledge sharing process between Steel Manufacturing Plant and external contractors deserves further research attention, and as the knowledge sharing process between these parties involves a principal (Steel Manufacturing Plant) and agents (external contractors), an appropriate theoretical perspective for studying knowledge sharing in Turnaround Maintenance projects is Agency theory.
2.4 Agency theory
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Figure 3 Visualisation of Agency theory derived and adjusted from (Tiessen & Waterhouse, 1983)
In current literature there are relatively few publications that discuss the link between Agency theory and knowledge sharing, in particular in the project context. The studies of Björkman et al., (2004) and Fey & Furu (2008) use Agency theory to explore how goal conflict and information asymmetry induces subsidiaries not to engage in transferring knowledge to other units of a multinational company. The study of Kulkarni et al., (2007) uses Agency theory to further understand how organizational factors influence knowledge sharing success and to provide support for the use of explicit incentives and rewards to induce knowledge sharing in the context of the firm. However, we could not find one publication that discussed the combination of Agency theory and knowledge sharing in the context of projects.
Through the lens of Agency theory, effective knowledge sharing in TAM projects might be perceived as the outcome of interest for the principal (SMP). The SMP is interested in this outcome because of the potential benefits effective knowledge sharing has to offer and its positive influence on organizational performance. Such as preventing re-invention of the wheel and by that reducing redundant work and solving problems at the primary stage which saves time, money, and man power (Grotenhuis & Weggeman, 2002) However, agency attributes that are inherent in the relationship between principal and agent may impede the knowledge sharing process between principal and agent (Pierce, 2012) and thus the outcome of interest for the principal (SMP), as illustrated in figure 3. The hindering because of these attributes might consequently lead to missed opportunities and thus
SMP (i.e. principal) External contractor (i.e. agent) Contract Agency attributes Information asymmetry Goal conflict Risk aversion
Length of the relationship
Task programmability
Outcome uncertainty
influencing TAM performance. Building on this, the need arises to find out how Agency attributes influence knowledge sharing between SMP and external contractors. The Agency attributes inherent in the Agency relationship between SMP and external contractors are discussed in further detail below.
Information asymmetry
In a principal-agent relationship, information asymmetry refers to a situation when one party in the relationship has more or better information than the other, resulting in an imbalance of power (Eisenhardt, 1989a). The information asymmetry between the principal and agent may refer to who the agent is (hidden information) or what the agent does (hidden action) (Salanié, 2005). This asymmetry creates an imbalance of power in transactions and causes adverse selection and moral hazard problems (Eisenhardt, 1989a). These problems will be further elaborated at the end of this section. Operationalizing information asymmetry would be the degree that after the contract is made, the SMP does not know the characteristics of the external contractor (hidden information) and/or that the external contractor’s actions cannot be observed (hidden action) by the SMP (Salanié, 2005; Stiglitz & Weiss, 1992).
Goal conflict
The SMP and external contractors are distinct organizations capable of some degree of cooperation, but they also have partial goal conflicts as well (G. Zsidisin & Ellram, 2003). Goal conflicts between principals and agents trigger problems in their relationships because, considering Agency theory, agents are self-interested (Zu & Kaynak, 2011). They can be counted on to attempt to exert less effort (moral hazard) and claim, explicitly or otherwise, higher capabilities and skills than they actually have (adverse selection) (Eisenhardt, 1989a; Ekanayake, 2004). When no goal conflict exists in an Agency relationship, agents will behave as expected whether their behaviour can be monitored or not (Zu & Kaynak, 2011; Eisenhardt, 1989a). For that reason it is important to align agent’s goals with those of the principal (Ekanayake, 2004). The operationalization of goal conflict would be the degree to which the SMP and external contractor disagree on goals and strategies in TAM projects (Rungtusanatham et al., 2007).
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performed by the external contractor that reduce the risk of not meeting the TAM performance objectives (Eisenhardt, 1989a; Rungtusanatham et al., 2007).
Length of the relationship
Previous cooperation between SMP and external contractor nurtures a climate of trust, openness, and confidence (Holcomb & Hitt, 2007). Agency theory assumes that when principals and agents engage in long-term relationships, it is likely that the principal will learn about the agent and so will be able to assess behaviour more readily (Eisenhardt, 1989a; Zu & Kaynak, 2011). In TAM, SMP`s build long-term relationships with key external contractors through repeated ties of interactions, and these allow the SMP to access information about the reliability and performance of external contractors, which helps to reduce information asymmetries, increase awareness of specialized capabilities and establish a basis for trust (Holcomb & Hitt, 2007; Zu & Kaynak, 2011). Operationalizing the length of the relationship results in the duration of SMP - external contractor relationships and awareness of the capabilities of the external contractors (Eisenhardt, 1989a; Zu & Kaynak, 2011).
Task characteristics (task programmability and outcome uncertainty)
Task programmability refers to the extent that the principal can specify appropriate agent behaviour in advance (Zu & Kaynak, 2011; Eisenhardt, 1989a). The more programmable the tasks principals delegate to agents, the more easily agents’ work can be observed and more readily principals can assess behaviour of their agents (Rungtusanatham et al., 2007). For instance, a standard TAM activity with a routine task implies high task programmability because the required steps can be precisely defined, whereas a unique activity implies low task programmability (Keebler, 2001). The operationalization of task programmability would be the degree to which the SMP knows the external contractors working procedures and techniques to accomplish the delegated task (Eisenhardt, 1989a; Zsidisin & Smith, 2005).
Moral hazard and Adverse selection
By its nature, the SMP expects that the external contractor shares its knowledge and expertise to benefit the success of the turnaround. However, external contractors may be reluctant in sharing their full knowledge and expertise, especially if they perceive that the SMP is reaping all the benefits (Zu & Kaynak, 2011). This difference in interest will result in the two parties concerning themselves only with theirs self-interest. At this point moral hazard and adverse selection problems are likely to arise. Moral hazard may arise when agents’ goals differ from the principal’s goals and the agent attempts to exert less effort or takes more risks because the SMP bears the burden of those risks (Eisenhardt, 1989; Hypko, Tilebein, & Gleich, 2010). It is for instance not uncommon that external contractors are charged on the basis of actual costs instead of the costs that are budgeted upfront. In this way all risks are attributed to the principal (SMP). For the agents (external contractors) the financial risks are minimal, as they are often paid based on the actual costs (Veldman, 2015). However, this situation might provoke the external contractor into undesirable behaviours when the SMP cannot observe the external contractors behaviour. For instance by performing unnecessary jobs during a turnaround in order to invoice more working hours to the SMP and thus increasing his own profit. Adverse selection arises when it is difficult to verify that the external contractors have the capabilities, capacity and skills to perform the delegated work that they claim to have (Eisenhardt, 1989; Salanié, 2005). For instance when the external contractor withholds information about the capacity in resources that it actually has. The principal, however, requires this information to make an optimal decision concerning the selection of the external contractor (Eisenhardt, 1989a). Operationalizing moral hazard and adverse selection results in the degree that the external contractor performs undesirable behaviours (e.g. exerts less effort or takes more risks) in which the SMP bears the burden of the subsequent risks (Eisenhardt, 1989; Hypko, Tilebein, & Gleich, 2010) and the degree that the external contractors claim to have higher capabilities, capacity and skills than they actually have (Eisenhardt, 1989; Salanié, 2005).
2.4.1 Linking Agency attributes with knowledge sharing
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parties may lose some of its uniqueness thus losing bargaining power (Björkman et al., 2004; Foss & Pedersen, 2002). Third, the study of Björkman et al., (2004) argues that extensive long-term relationships with a specific external contractor will enhance the absorptive capacity, its problem solving capacity and its ability to create and share new knowledge within that relationship. Fourth, external contractors who have a high level of risk aversion toward meeting the TAM performance objectives are more likely to share relative knowledge in order to reduce the risk of not meeting the TAM performance objectives (Zu & Kaynak, 2011). Fifth, when delegating programmed activities to external contractors, it is relatively easy for the SMP to know how the activity has to be executed and to evaluate whether the external contractor is meeting the agreed performance objectives (Eisenhardt, 1989a; Zu & Kaynak, 2011). In these situations the required degree of knowledge sharing will probably be rather low since the SMP already has the required knowledge to effectively monitor and asses the activities delegated to the external contractor (Hypko et al., 2010). On the other hand, when external contractors need to execute unique, and often risky activities, task programmability will be low and the required degree of knowledge sharing will most likely be higher. Sixth, the outcome uncertainty in the delegated task may act as incentive to intensify the degree of knowledge sharing between both parties in order to reduce the uncertainty around the outcome of the task. Grotenhuis & Weggeman (2002) state that knowledge sharing solves problems at the primary stage enhancing the quality of the preparation phase and possibly decreasing outcome uncertainty.
2.5 Conceptual model and research questions
As described in the theoretical background, effective knowledge sharing between firms has the potential to significantly impact business performance resulting in innovative solutions, better project control and savings in time and money (Haas & Hansen, 2007). Besides, these benefits are of high importance in reaching TAM performance objectives and consequently TAM success. However, since the SMP outsources manpower supply to external contractors an Agency relationship arises between both parties including underlying Agency attributes and additional Adverse selection and Moral hazard problems. The Agency attributes might hinder the effective knowledge sharing between both parties and consequently leading to missed opportunities in for instance cost and lead time reduction. Building on this, the need arises to find out how Agency attributes influence knowledge sharing from the external contractor towards the SMP, if there are other underlying factors that influence knowledge this knowledge sharing process, how knowledge sharing relates to Adverse selection and Moral hazard problems and how knowledge sharing influences TAM performance objectives. This need is illustrated in the conceptual framework, shown in figure 4, below:
Agency attributes
Information asymmetry
Goal conflict
Risk aversion
Length of the relationship
Task programmability
Outcome uncertainty
Knowledge sharing from the external contractor towards the
SMP
TAM performance objectives
Safety objective Lead-time objective Effectivity objective Moral Hazard problem Adverse Selection problem
Figure 4 Conceptual model
Following directly from the conceptual model and in order to explore knowledge sharing in TAM projects in detail, the following research question and related sub questions are formulated:
RQ; How to effectively share knowledge from the external contractor towards the Steel
Manufacturing Plant in Turnaround Maintenance projects in such a way that it contributes to the Turnaround Maintenance performance objectives?
SQ1; How do Agency attributes, derived from Agency theory, affect the degree of knowledge sharing
from the external contractor towards the Steel Manufacturing Plant in TAM projects?
SQ2; What other factors influence the degree of knowledge sharing from the external contractor
towards the Steel Manufacturing Plant in TAM projects?
SQ3; How does knowledge sharing from the external contractor towards the SMP contributes in
reducing adverse selection and moral hazard problems in TAM projects?
SQ4; How does knowledge sharing from the external contractor towards the SMP affect TAM
26
3 Methodology
In order to gain empirical understanding on what factors influence effective knowledge sharing from the external contractors towards the SMP in TAM projects and ultimately how this affects TAM performance, a holistic multiple-case study was executed, since this method is most appropriate to explore a real-life phenomenon in depth (Yin, 2009). Multiple cases were included because this provides a more objective dataset (Yin, 2009), with which cross-case analysis can be done (Yin, 2009), increasing analytical generalizability and robustness of the study (Voss, 1984; Herriot & Firestone, 1983). The empirical context in which this research will be conducted is a large SMP in the Netherlands. Subsequently, the unit of analysis is knowledge sharing from the external contractors towards the SMP in Turnaround Maintenance projects. The unit of analysis is chosen based on the level of aggregation on which the independent variable is measured (Yin, 2009). Moreover, the independent variable is part of the unit of analysis. Conclusions will eventually be drawn based on this variable, making the choice of the unit of analysis substantiated. The case study design is illustrated below, in figure 5.
3.1 Tata Steel Mainland Europe
The focal company that is used for these cases is Tata Steel Mainland Europe and is a large Steel Manufacturing Plant located in Ijmuiden, the Netherlands. The production facility in Ijmuiden is known for its production of high quality steel which is mainly used in the automotive and packaging industry. Turnaround Maintenance plays a crucial role in the operations of Tata Steel Mainland Europe, and it can be seen as an integral part of the production process of the company. Annually, a large number of turnarounds are executed at the focal company, ranging from small and rather simple turnarounds with a duration of a couple of hours till large and complex turnarounds that might interact with other turnarounds and with a duration of up to a week. Next to that, a large part of the maintenance activities is outsourced to external contractors and knowledge needs to be shared in all of the phases of the turnaround in order to successfully outsource the maintenance activities in these Agency relationships. For these reasons the setting at Tata Steel Mainland Europe is considered as particularly useful for answering the RQ of this research.
3.2 Case selection
In line with the aim of this study to provide an understanding on what factors influence effective knowledge sharing between SMP and external contractors and ultimately how this affects TAM performance, 12 cases were selected by polarizing TAM projects into successful and less successful
Empirical context: Large European Steel Manufacturing Plant (SMP)
Unit of analysis: Knowledge sharing from the external contractors towards the SMP in
Turnaround Maintenance projects
projects as suggested by Miles & Huberman (1994). Besides, the choice for a multiple case study will augment the external validity of this study and help guard against observer bias (Voss, Tsikriktsis, & Frohlich, 2002). The focus for the selection of the cases was mainly on theoretical replication (Shakir, 2002; Eisenhardt, 1989b), assuming that the successfulness of TAM projects will result in differences in the degree of knowledge sharing between cases. Furthermore, literal replication will there be as well as it expected that some of the cases will show similar results.
Case A B C D E F G H I J K L Success
+
-
+
-
+
-
+
-
+
-
+
-
Date Wk27, 2015 Wk36, 2015 Wk5, 2015 Wk11, 2015 Wk39, 2015 Wk41, 2015 Wk30, 2015 Wk14, 2015 Wk32, 2015 Wk44, 2013 Wk33, 2015 Wk8, 2015 Factory Sinter factory Coldmill/Pickleline (1) Coldmill/Pickleline (2) Coated products Hot mill BlastfurnacesPerformance objectives
Safety incidents 2 20 1 3 2 7 1 1 3 4 3 3
Lead-time (%) 3 11,6 7 18 15 28 1,7 14,8 1,25 3,5 14,2 37,8
Effectivity (%) 98,3 96,5 93 93 100 94 94 85 99 99 98,9 99,3
3.3 Data collection
For each case, data was collected by means of multiple data collection methods from multiple sources of evidence to enhance data- and methodological triangulation (Karlsson, 2009). Data is collected by interviewing turnaround maintenance experts by means of semi-structured interviews, conducting observations at the turnaround itself and from written data by collecting evaluation reports and performance data of the specific turnaround.
For most cases, interviews were taken with the Shutdown manager (SM), Supervisor (SV) and with one representative of the external contractor, mostly the project leader. Overall the interviewee was chosen as the person that knows most about the interaction with and the sharing of knowledge related to the other party on his level in the organization. A description and specifications of each interviewee is provided in table 3.
Interviewee Description Specifications
1 Shutdown manager
(tactical level)
The SM is responsible for coordinating the complete planning, preparation, execution, review and reporting process of the shutdown
Has most overall knowledge about the turnaround
Knows most about the effect of knowledge sharing on the overall performance
(Mainly) indirect contact with the external contractors
2 Supervisor/Planning Engineer
(operational level)
The SV is responsible for the preparation of the shutdown activities and coordination of external contractors during the execution phase of the shutdown.
Knows most about the required knowledge for specific TAM activities
30
A number between two and four interviews per case was chosen in order to reduce respondent bias, to increase reliability and view the case from both the SMP and external contractor side as from different levels in the SMP organization, increasing the richness of the data and enhance triangulation (Voss, 2009).
For the interviews, an interview protocol (see Appendix B) was used. The protocol was sent to all participants for reading and they had to sign a consent form before the start of the interview, to make sure they understood the objective of this research and the interview, understood the definition of knowledge in turnarounds and knew how their answers would be used. The interview consisted of semi-structured questions, this allowed comparability of answers and improves the reliability of the study (Yin, 2009). Interviews usually took around 75 minutes. The interview questions have been added in Appendix C. Each interview was recorded and transcribed within 24 hours after it took place, by that following the 24-hour rule of (Eisenhardt, 1989b). Besides in order to improve construct validity of the research (Yin, 2009), the interviewees were asked to review the transcriptions from their interview. In total 22 persons (SM, SV and external contractors) were interviewed spread across 12 different cases and 5 different factories. An overview of the different cases and interviewees is provided on the next page in table 4.
Dutch is the native language of the participants, and some of them would not feel comfortable speaking in the English language. Therefore, in order to generate as rich and complete data as possible and encourage the participants to provide in-depth and extensive answers, the interviews were in Dutch. The data which is used for the report has been carefully translated back to English. At the end of the interview the researcher requested for the evaluation report of the turnaround which provided information about the background, performance and improvements for the next turnaround. These reports were used for further analysis of the case.
Case Performance Factory Interviewee Date Duration (in minutes)
A Plus Sinter Factory Shutdown manager 14-9-2015 80
B Minus Sinter Factory Shutdown manager 5-10-2015 72
B Minus Sinter Factory OBSERVATION 1-9-2015 6:30 – 13:00
A+B Plus and minus Sinter Factory Supervisor 19-10-2015 60
A+B Plus and minus Sinter Factory External contractor 30-10-2015 47
C Plus Coldmill/Pickleline (1) Shutdown manager 8-9-2015 81
D Minus Coldmill/Pickleline (1) Shutdown manager 27-10-2015 44
C+D Plus and minus Coldmill/Pickleline (1) External contractor 13-10-2015 74
E Plus Coldmill/Pickleline (2) Shutdown manager 25-9-2015 63
J Minus Hot Mill Projectleader 8-10-2015 44
I+J Plus and minus Hot Mill Supervisor 9-10-2015 64
I+J Plus and minus Hot Mill External contractor 28-10-2015 44
K Plus Blastfurnaces Shutdown manager 28-9-2015 87
L Minus Blastfurnaces Shutdown manager 5-10-2015 77
K+L Plus and minus Blastfurnaces Supervisor 5-10-2015 33
K+L Plus and minus Blastfurnaces External contractor 14-10-2015 82
3.4 Data analysis
34
Than explanation building (Yin, 2009) was performed by drawing a conclusion per case and write it out in a case narrative, using the data from the interviews, observations, evaluation reports and other company documents (Appendix A) for background information. In order to be able to display how the presence of the agency attributes interrelate with knowledge sharing, we started grading the agency attributes and the degree of explicit and tacit knowledge sharing for each case from no to high presence (0–5). Then cross-case analysis started. The cases, differing in performance, were compared and we started looking for differences and similarities between the cases regarding the presence of the Agency attributes and the degree of knowledge sharing (Appendix F). Finally, it was analyzed how the degree of knowledge sharing related to differences in performance by comparing the successful with the less successful cases.
4 Results
Following the collection of data, this chapter presents the results. First, TAM projects and knowledge sharing at the focal company will be outlined to provide some understanding on the characteristics of a TAM projects at the focal company and the knowledge sharing endeavors in each phase of the TAM project. Second, the results of the link between the Agency attributes and knowledge sharing in TAM projects are presented, thereby answering SQ1. In the third section SQ3 is answered by presenting the results on how knowledge sharing reduces Adverse selection and Moral Hazard problems. In the fourth section SQ2 is answered by presenting additional factors that influence knowledge sharing from the external contractor to the SMP and vice versa. Finally, SQ4 is answered by presenting how the knowledge sharing process affects TAM performance. Throughout the following sections quotes from the interviews are used to clarify and emphasize findings. However, before presenting the results of this research and to make them better understandable we need to further distinguish knowledge sharing endeavors into unidirectional and bidirectional knowledge sharing. As knowledge is shared in one direction or in both directions. Unidirectional knowledge sharing in this research is when solely the external contractor or the SMP bridges stocks of knowledge to the other party. Bidirectional knowledge sharing is when both parties have a lack of knowledge and bidirectionally share the knowledge towards each other. This distinction will be applied in the Results section and upcoming Discussion and Conclusion sections.
4.1 Turnaround Maintenance and knowledge sharing at Tata Steel
Characteristics of TAM projects at Tata Steel: Descriptives
36
Duration and size. Tata Steel classifies shutdowns into large, medium and small shutdowns based on their complexity and planned duration. The small shutdowns are characterised by a high frequency, mainly fixed, reoccurring work package and a duration of less than 24 hours. This is for instance case E with a duration of 6 hour. Large shutdowns are characterised by a low frequency, largely unique work package, which might include engineering projects as well and a duration of more than 97 hours. None of the studied turnarounds lasted more than 97 hours. Obviously, the medium shutdowns are in between the small and large ones and have a duration between 24 and 97 hours. This is for instance case L with a duration of 28 hours.
Technical environment. Because the TAM projects are conducted in a technical environment the scope of work of the researched cases consisted of a wide range of mechanical, electrical, pneumatic, hydraulic and civil jobs. In for instance cases I and J an old roller conveyor was replaced for a new one. This job consisted of mechanical work because of the construction of the conveyor itself, pneumatic and hydraulic work, electric work and civil work such as replacing the concrete anchors. On the contrary in case E the scope of work was much smaller and simplistic and consisted of inspecting the bearings and lubricating the bearings and other rotating parts.
Dynamic scope. The development of the scope starts at the engineering departments with the generation and collection of work orders that are proposed by the supervisors of the installation. Than the scope is challenged and optimized and the scope freeze takes place, this means that no more work orders are collected from the supervisors. This process results in the initial scope called the ‘shutdown scope’. However, due to malfunctions or other defects that might take place in the meantime the scope further emerges and this is called the ‘emerging scope’. The maintenance jobs that are part of the ‘shutdown scope’ and ‘emergent scope’ are than executed in the execution phase. However, during the execution phase the installation is opened up and further inspections are made resulting in a further emerging scope. This is the third type of scope and is called the ‘discovery scope’. Ultimately, because of these three types of work scopes the overall scope of work is constantly changing and it is the challenge and responsibility of the shutdown manager to determine at the end which maintenance jobs deserve priority. The scope development is illustrated in figure 8 below.
xxx
Figure 8 Scope development
on monitoring the condition of the installation, increasing the performance of the installation and planning the maintenance activities. Another reason for outsourcing is not enough specialist knowledge that is required to execute special maintenance jobs such as fine-tuning the laser of an installation or the maintenance of fine electric work such as Programmable Logic Controllers (PLC`s). Finally, depending on the type of TAM project (small, medium, large) between 50 and 3000 employees, from different external contractors, are deployed to perform maintenance jobs at Tata Steel. For instance for case G this number was 100 and for case A this was 380.
Reoccurring nature. TAM projects at Tata Steel have a reoccurring nature. The frequency depends on the required maintenance and the coordination with Supply chain as in that the customer still receives its products on time and as planned. As a result of its repetitive nature the work package of a TAM project consists for a large part out of reoccurring maintenance jobs and for the other part out of unique maintenance jobs as the shutdown manager of case K and L confirms:“80% of the jobs we do not discuss in that much detail because they reoccur every turnaround. However, it is the other 20% that needs extra attention during the preparation phase”. Moreover, this division between the reoccurring maintenance jobs and the unique maintenance jobs directly links to the division in sharing explicit and tacit knowledge in TAM projects. As it stated in the interviews that for most reoccurring jobs there is readily available explicit knowledge available such as work instructions, work permits, drawings of the installation, safety procedures and other documentation. As the best practices from these jobs have been codified and documented into plans based from the experience of previous turnarounds. On the contrary, for the unique maintenance jobs there is no explicit knowledge available and the success of these jobs hinges on tacit knowledge like the experience and skills of the SMP and external contractors. The division of explicit and tacit knowledge sharing for each phase of a TAM project will be further elaborated upon in the next section.
Knowledge sharing in TAM projects at Tata Steel: Descriptives
38
TAM projects, the knowledge sharing process in the preparation phase mainly consists of explicit knowledge sharing as in work instructions, planning’s, work permits and other documentation. These types of explicit knowledge are readily available because of previous turnarounds and only need to be derived from the ERP-system and are than shared via email or hardcopy towards the external contractor. Next to this, the shutdown managers of case C, D, I and J stated that it is important that all the documentation that the external contractors requires to prepare his job is available, complete and that he receives it on time to guarantee a successful execution. However, the external contractors of case A, B, C, D, K and L stated that the completeness and quality of these documents differs for each job and for each factory because it is not properly codified or maintained. Finally, for the reoccurring jobs it is not solely explicit knowledge that is shared. In cases A and B tacit knowledge is bidirectionally shared next to the explicit knowledge during field-checks as a last check together with the external contractor at the job-site or installation before the execution phase starts.
Concerning the special maintenance jobs, these jobs are unique and have never been executed before in previous turnarounds, it was stated in the interviews that the preparation of these jobs hinges mainly on tacit knowledge like skills, expertise and experience of both parties. Bidirectionally sharing these types of tacit knowledge takes place during meetings, brainstorms and so called ‘field-checks’. In which the latter is an assessment of the job in which both parties make agreements about the required equipment, materials and resources at the job location itself. Based on what both parties see at the job location and their previous experiences and skills they prepare the job and capture this in an agreement. Field-checks were used in the preparation phase of case A, B, K and L. Furthermore, considering explicit knowledge in special jobs, in for instance cases I and J the external contractors made their own plan of approach and planning and shared this during the preparation phase with Tata Steel.
Execution phase. In the execution phase the preparation and planning of the project is tested against reality. The interviewees in all cases stated that during the execution phase knowledge sharing is less than in the preparation phase as the shutdown manager of case K stated “When we successfully prepared the jobs we almost don`t have any work during the execution phase as from my own function”. When knowledge is shared in the execution phase it is mostly bidirectional tacit knowledge sharing as stated by the shutdown manager in case I:
“During the preparation phase the external contractor receives documentations like drawings and a work instruction. In the execution phase tacit knowledge sharing takes place for instance when we need to solve things we did not expected on forehand”
ambiguities in the explicit knowledge that was shared in the preparation phase with the external contractors. This was observed in case K in which the supervisor received many questions from the external contractors because of ambiguities in the work instruction.
Evaluation phase. Evaluating the TAM project is considered as essential in case I and J to avoid re-inventing the wheel and that faults are made over and over again and is something that takes place after every turnaround in these cases. However, in the interviews it was stated that in other cases TAM projects are evaluated only occasionally as in Case K, E and F, or they are performed but the evaluation report is not shared among the employees and external contractors as in case A and B, or the evaluation phase is perceived as not a mandatory part of the project as in case G and H. Considering the importance of evaluating the TAM project the external contractor in case E stated: The result of not evaluating the TAM project is stated by the external contractor in case K as he states: “We are now in the preparation phase of the next turnaround. However, I do not know what we exactly did the last time and what we could do better because no evaluation was performed”. Figure 10, on page 41, visualizes and summarizes the knowledge sharing process for each phase of the turnaround.
40
Figure 9 Degree of knowledge sharing per case Cases Explanation
A+B High degree of tacit knowledge sharing as field-checks were considered as the most important mean to share knowledge with the external contractor
C+D Knowledge sharing mainly consisted of sharing explicit knowledge. This had to do with the high degree of reoccurring jobs and the frequency of every 6 weeks that made it unnecessary to share allot of tacit knowledge additionally to explicit knowledge
E+F See case C+D
G+H The major part of the knowledge sharing consisted of explicit knowledge. Tacit knowledge was the lowest in this case as only one meeting takes place before the start of the turnaround.
I+J Both parties created and shared explicit knowledge however tacit knowledge was also shared in decreasing the lead-time of the project and in finding a better method in mounting the conveyor belt job
K+L There was a higher degree of special jobs and the turnarounds only take place every half-a-year increasing the need to share tacit knowledge next to explicit knowledge
Table 5 Explanation degree of knowledge sharing
3 4 4 4 3 4 5 2 2 1 3 3 0 1 2 3 4 5 A + B C + D E + F G+ H I+J K + L
